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About ten years ago I attended a series of talks in Shanghai sponsored by my graduate school. The event tied in with a business trip I already had planned. I remember two specific things I learned which surprised me. One, China was already the single largest market for Mercedes Benz automobiles. And two, the very best net savings (or enhanced profit if they could charge the same price) an American manufacturer would have by moving their manufacturing to China was 25%. Maximum. Usually significantly less.

This was before Obama came into office and all his added regulatory, tax, and cost burdens may have increased that figure. But the bottom line is China is an increasingly expensive place to operate. Add in the costs of incessant corruption, poor quality control, long transport times, west coast port issues, etc. and even without the expected sea changes Trump is promising a lot of American businesses would be considering moving production back home or elsewhere offshore.

25% —So if Trump can save them let’s say 20% through deregulation and lower taxes we are talking about a massive shift back to the US if they take the bait.

Some manufacturing industry publications were reporting a couple of years ago that production costs would be higher in coastal China than in South Carolina and Alabama by around 2020.

Believe it or not, the biggest problem these industries face here in the U.S. is access to a labor pool that supports their skilled labor needs.