Shoes made in America, Sold in America (example):
Consumer Price: $100
Cost of Manufacture: $70
Cost to retailer: $90 (shipping).
Profit of manufacturer: $20
Profit of retailer: $10
Employee wages in factories typically constitute middle-class to upper-middle-class pay scales. Well above poverty level.
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Shoes made in China, sold in U.S.
Cost to consumer: $85
Cost to manufacture: $10
Cost to retailer: $65
Profit to manufacturer: $55
Profit to retailer :$20
Less cost to Consumer:$15
Chinese labor typically consists of low class urban populations defining poverty level. Improving to some degree, but only mildly.
Question: Where does the $55 of the Chinese manufactured shoes go? It doesn't go to labor. It may go back into investment in the country - but it's rather obvious that the great disparity between Chinese and American economies allows for far greater profit margins to be had on the same or inferior product. While the consumer saves 15% of their pay, the companies see at least double the profit.
In an economy experiencing healthy competition, profit margins are typically around 5%, with very lucrative markets or optimum running businesses around 10%. This will vary somewhat by industry and time of year as operational overhead meets varied product sales - but overall, a 10% profit margin is extremely good on the whole while a 5% is what most businesses operate around. Competition keeps profit margins from growing excessively.
So, let's analyze how "free trade" and "globalism" has impacted the respective societies.
China has a limited manufacturing capability. While it is rapidly expanding, consider that their infrastructure is being continually driven to its limit and that there are enormous amounts of smog and waste concerns stemming from China. Consider, also, things like the fact that the Chinese have internally gimmicked their economy to present artificially low costs of steel and aluminum - two very energy intensive industries, which - in America, were primarily driven by hydro-electric plants and nuclear reactors. China, powering these systems with coal and poor environmental standards, is creating massive amounts of pollution for their people in order to service American consumer demand.
Consider this aspect, as well. Chinese consumers are being pitted against American consumers for the destination of retail products. When the Chinese consumer enters into competition with the American consumer - it's absolutely no contest. The American consumer clobbers the bejeezus out of the Chinese consumer. Products which could still turn a profit domestically are sold to American consumers for an order of magnitude greater profit.
This means that, rather than Chinese people 'voting with their dollar' on what companies to support for their labor and environmental practices, as well as other aspects of Chinese society - Americans, greatly disconnected from these issues, vote simply on price. Or, more accurately, accountants arbitrate which products to stock on the store shelves from the amalgamation of the Chinese industrial backdrop.
Consider what happens when "America first" happens.
The American consumer pays around 15% more for their products (rough estimate) relative to what the store sells them Chinese products for. American industry begins to return - steel foundries come back, are expanded, etc. Primary ore smelt of aluminum and other metal ores comes back online. NET GLOBAL SUPPLY OF THESE RESOURCES INCREASE.
Do the Chinese factories stop producing things? Certainly not. While some may shift their business model around to account for less insane profits - they can still sell to the 1.x billion Chinese consumers right in their own back yard fairly well. Consumer demand in China outstrips current manufacturing capacity by far. The domestic economy of China ultimately improves as consumer products improve quality of life and local consumer interests begin to shape the relative industries. "China first" for Chinese would see them opt to reward companies with favorable employment practices with their business. Manufacturing capacity ends up going toward what the Chinese want their factories to build, rather than simply what services American consumer demand.
There is no reason, with the capabilities we've had developed for the past 50 years, why any nation should be unable to feed, clothe, and provide for many of its own interests. There may be a few exceptions to this in case of extreme local resource scarcity (or lack of key resources needed for these capabilities) - but the way things currently stand, the Chinese are being used as a slave labor source for the American consumer - who is in turn being used as a wealth transfer vehicle to the institutions and individuals who own the Chinese manufacturing giants.
It should come, then, as no surprise that certain elements of global governments, many of them with a net worth many hundreds of times their own annual salary (how does that happen for public servants?), would then come to the hastened defense of this arrangement. Not only do they do this at the expense of their own citizens and their own nations' economic capability, they do this while simultaneously attempting to fuel public outrage against the concept of meritorious pay/income and small business owners.
