Last November the US International Development Finance Corp. announced it would fund a $553 million project to build a deep-water shipping container terminal in Sri Lanka’s Port of Colombo.
The project was billed as an opportunity to transform Colombo into a world-class logistics hub at the intersection of major shipping routes and emerging markets, but pundits knew it was a move to directly compete with China in international development financing.
Competing with China has arguably become an American industry past-time and that includes the trailer building industry. Such is the concern that some are taking their arguments to Congress.
Last year, Wisconsin-based Stoughton Trailers hosted members of Congress at a roundtable event to discuss the ‘threat to American manufacturing’.
Stoughton President and CEO, Bob Wahlin, has been vocal in his concerns about the state of domestic manufacturing and competition from foreign manufacturers, and how new policies might boost domestic economic activity.
While one side of the argument is firmly of the belief that overseas trailer manufacturing is causing American companies to lose market share and is threatening jobs, some experts argue the market is actually doing well and perhaps increased competition has forced American manufacturers to become more efficient and innovative.
So, the question remains. Is overseas manufacturing a real or exaggerated threat?
According to federal data, nearly 13 million Americans are employed in manufacturing, which is the highest number since the recession of the late 2000s.
Within the American trailer building sector, the market is expected to reach a value of $16.3 billion in 2024, representing a 3.1 per cent increase from 2023. This growth is expected to be driven by several factors including rebounding demand, an improved supply chain and moderate American economic growth.
The dry van trailer segment is expected to be the largest in 2024, accounting for 57 per cent of total revenue due to the strong growth of e-commerce driving demand for transportation to distribution centres.
While the push to keep manufacturing on American soil appears to be shared on both sides of the political spectrum, not everyone thinks the answer is as simple as cutting off foreign countries.
In a recent opinion piece in Foreign Policy Magazine, the President of the Peterson Institute for International Economics, Adam Posen, argues that if the government imposes export and investment restrictions on countries such as China, if would then have to monitor and prevent its own headquartered companies from moving activities abroad.
“There is no reason to take that frustration out on the rest of the world—let alone on private Chinese companies that happen to have had commercial success,” he writes. “In fact, doing so will make US security worse by hindering the technological progress necessary for resilience and by eroding the United States’ influence on third countries.”