Competitiveness Toolkit

Call for Partner(s):

We are seeking other organizations to partner with us in refining this Toolkit and presenting it to the administration and Congress.

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Ultimate Objective: Balance the $700 billion/year U.S. manufactured goods trade deficit by leveling the playing field and increasing U.S. competitiveness.

Project Objective: Provide a tool to identify the best policies to achieve the Ultimate Objective.

Overview:

1. Level the playing field: Create a vetted national policy tool to select the optimal actions that will bring back the desired number of manufacturing jobs with the least collateral damage. The actions will also keep jobs from leaving and increase exports.

2. Overcome the wide belief that the U.S. cannot and will never again produce many of the products that have been lost to offshoring. Show that there is a path to adding millions of manufacturing jobs.

3. Advance from the current condition, many groups proposing, but not quantifying their solutions’ impacts, to a unified, quantified proposal for the nation.

Quantifying and Eliminating the Competitiveness Gap

  • Basic assumption: The key to reshoring is price or Total Cost competitiveness. Most importation of manufactured goods is, finally, motivated by price, i.e. by lower wages and manufacturing costs abroad. Some eco-system gaps exist but would be filled if cost structure allowed.
  • Utilize data from the TCO (Total Cost of Ownership) Estimator user database, which provides:
    • Ex-works product price distribution for U.S. and offshore sources of a wide range of products
    • User calculated “hidden” costs including quality, delivery, IP, etc.
    • By source country (esp. China) and industry

  • Obtain annual $ value of imports by country and industry from U.S. Department of Commerce
  • Calculate:
    • The percentage ex-works and TCO competitiveness gaps by country and industry. A statistical distribution.
    • The value of annual import substitution as a function of reductions in the competitiveness gap percentage. The price-elasticity of imports.
    • Percentage improvement in U.S. price competitiveness needed to substitute domestic production for imports, reducing non-petroleum goods imports by X% and therefore the trade deficit by 3X%.
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    Project Plan:

  • Find one or more partners
  • Refine the estimates presented above
  • Add additional Factors
  • Post online
  • Provide space for others to:
    • Insert their estimates and supportive logic if they differ from ours

    • Insert additional factors and estimates

  • Objective: Attract attention to the analysis and achieve a consensus
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    HM 9/23/17

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