> Lots of industrial activity is illegal/extremely risky in the US. If you want to open a steelworks, for example,
I see your point. OSHA and regulations probably make this more expensive domestically, but I wonder if it'd only be marginally more expensive? We still have plenty of dangerous industries at scale: forestry, oil, mining, machining, rail, our remaining steel industry, etc.
I agree with you that this probably plays a big role in the dangerous manufacturing jobs. I'm not sure it would have any bearing on "safe" jobs such as electronics manufacture, though.
> the US will be much more hostile to the business on environmental grounds than China would.
A sibling comment questioned this, and I share that sentiment. We have shale fracking, offshore drilling, mining, coal, and plenty of other environmentally dirty industries. Negative press hasn't put a stop to it.
> Median wage in the US is something like 5-6x times China and the gap was larger when the investment decisions were being made.
This is historical and it's starting to level out. Following this rationale, I assume we'd push manufacturing to countries where labor is even cheaper than China.
But another issue is fragility. Though infrequent, the supply chain situation we're in now is something we should avoid. We're making the decision to onshore for semiconductors, which are high value, critical, strategic components. It seems like we'd want to do the same for steel, pharmaceuticals, medical equipment, and other key domestic functions and high value industries.
Even if we don't face another pandemic for a long time, Covid has surfaced problems in our existing strategy. It would be good to be in a place of security and negotiating power.
1. Lots of industrial activity is illegal/extremely risky in the US. If you want to open a steelworks, for example, it seems reasonable to guess that the US will be much more hostile to the business on environmental grounds than China would.
2. US labour conditions are extremely generous compared to China. Median wage in the US is something like 5-6x times China and the gap was larger when the investment decisions were being made.
Neither of those will be solved by tax breaks. General tax breaks may well spur good results, but the real killer of industry is those two factors. The US already has a much better general business climate than China legally (eg, people can be confident that they own their business without risks like corruption or nationalisation taking it off them).