There’s a lot of talk about friend-shoring and bringing industry back to the US and its allies, but the reality is quite different.
China's trade surplus reached US$877.6 billion for 2022, an increase of 30% of the already record high year of 2021. This is the biggest trade surplus ever achieved by one country in human history. Trade surplus with the US accounted for almost half at US$ 404 billion. pic.twitter.com/P37rbLGczI
— America-China Watcher (@PandemicTruther) January 14, 2023
The bottom line, right now, is that if the US went to war with China, the American (and Western) economies would virtually collapse.
The US is making serious preparations for war: they are fortifying allied countries in Asia in a similar fashion to how they did Ukraine after 2014, although obviously with less of an eye to ground invasion. Japan has doubled its military budget and stated that it will no longer obey the “peace” constitution but will participate in offensive operations with America. US bases are popping up around China wherever they are allowed.
But to fight a non-nuclear war with China, the West has to genuinely re-shore its critical industries, and it isn’t doing that beyond a few steps with regards to semiconductors. A vast swathe of basic industrial goods are made by China, and not by the West, or not in sufficient quantities.
However, to seriously repatriate industry requires reducing the cost-structure: and that means reducing housing costs, and in the US, health-care and tuition costs, so that Western industry is cost-competitive. Right now the US is grabbing a swathe of energy price sensitive industry from Europe, and especially Germany, but that doesn’t help much in an general war: they’re taking from their allies, not their enemies.
Genuine oligarchic plutocracies, which is what most of the West is, including the US, are generally very bad at industry and war, though there are exceptions (Venice, at various points. But being merchants concentrated their minds on naval power.)
The steps required for America and the West to rise to the challenge of China require Western elites to make painful choices they so far are avoiding: they simply have to give a better deal to their populations, and not concentrate on keeping wage increases under inflation increases (which is what has happened in the US.)
America’s elites can be absurdly filthy rich or they can just filthy rich and have a chance of retaining their global pre-eminence. It’s unlikely they can do both, though I suppose they could bet on ruling a post-nuclear wasteland, if they’ve gone fully insane.