The auto manufacturing industry in the United States of America in the last decade has experienced crowding effect or a downfall due to the improper competition from China. This industry, however will, redeem from this position only if measures are taken against China and all stakeholders in auto manufacturing industry work together as a team to come up with policies and regulation which will ensure that the industry will not be crowded out in the future.
Trade sanction against China remains the best action the federal government will take to ensure that superiority in auto manufacturing industry remains defended. The logics behind this is that the government of the republic of China violated the world trade organization’s laws which stipulated the need for trade balance among nations depending on the amount of resources they have. In the past 10 years, when the economy of the United States of America has been declining, the China’s government has taken the advantage of the economic crisis the state faced and rushed in the market with the aim of defeating the United States of America in terms of business superiority.
The government should declare sanctions against China as faster as possible to ensure that American auto manufacturing industry is backed up again due to the imbalance of trade between these two countries. The question which should be asked is ”Why is there an increase of China’s export in the United States of America though it was the leading manufacture of auto products many years back?”. What are some of the causes which made this industry back down? The logic behind this question is that both the federal government and the stakeholders have failed to perform their duties effectively, and this was the opportunity which China grasped to overdo USD in manufacturing business and other business-related sectors.
On the other side of the coin, economic crisis over the last 10 years has impacted so much the fall of American manufacturing industry due to the huge government expenditure, for example, in funding war in Iraq and other parts of the world. Since huge number of capital was needed to address this urgent political issue, it was challenging to find another alternative ways of subsiding auto manufacturing industry to make it stable like other countries such as China which allocated 27 billion to subside their auto manufacturing sector. During Obama’s administrative, huge capital was spent in implementing health care bill but, fortunately, American citizens got relieved through initiation of loan grantees from the federal government by Obama’s leadership which for the last four years has boosted the growth of auto manufacturing industry.
The reason why China is performing well in all economic sectors including auto manufacturing is a proper policy formulation, evaluation, and implementation in auto manufacturing sector. The logics behind their success is that they are able to identity the economic challenges of the competitors and plan up with strategy which can make them change those weaknesses into their strength. The issue of subsidence of their auto manufacturing sector was developed from identification of the weakness the USA was facing due to the huge government expenditure and capitalized on them which eventually outweighed the USA in terms of business.
Trade deficit is another crucial challenge which must be solved by the federal government to back up its economy as well as revive the auto manufacturing industry. Trade deficit is when there is imbalance in forms of trade where export prevails over import or when import prevails over export within two or more countries. In our case, there is a great trade deficit between the USA and China because China had blocked American export to their country. The logics here is that China wanted to increase its export volume and at the same time protect home-based industries from being crowned out by American exporters. Blocking America from selling its auto products made many workers who were working in the auto manufacturing industry be laid out leading to high unemployment level in the USA.
American leaders, on the other hand, have contributed to back slide of auto manufacturing industry by giving false promises to the citizen for them to be supported in the raise to White House. Many presidential candidates use the challenges facing the state as a bridge to White House and, when they are elected, they tend to forget crucial challenges they promised to solve in case they are given the opportunity to lead the country. These leaders should ensure that trade laws are followed and respected to facilitate the free trade activities outside and within the USA. In In conclusion, both the federal government and other stakeholders should formulate some alternative policy and guideline which will ensure auto manufacturing industry to grow and become the worlds leading auto service provider.