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The Chinese Seem Eager to Open Plants in the US instead of Whining like some in Silicon Valley



In November Patently Apple posted a report titled "Apple Reportedly Preparing a Responsible U.S. iPhone Plant Back-Up Business Plan." The Nikkei had reported that Apple asked iPhone assembler Foxconn in June to look into making iPhones in the U.S." We then posted another report titled "Taiwan's Largest Industrial Conglomerate now Considering Opening Plants in America if Trump Reintroduces Tariffs," followed by yet another one titled "Apple Supplier Quanta will Double Down and Expand Server Manufacturing in the U.S. due to Trump Victory." Now a new Chinese company signed deal to make garments in Arkansas. Is this actually becoming a trend?


In short, yes, and hopefully it's just the tip of the iceberg. Yet every time a report like this surfaces, especially the one about Apple's Foxconn looking into opening a U.S. plant, there's a certain niche of Apple fans that immediately go into denial mode and start saying that it's impossible for an iPhone plant. The number one argument is that it's too cheap a product or that the price of smartphones would sky rocket.


Today CNN tech has published a report titled "Chinese manufacturers are setting up shop in the U.S." Low and behold Chinese garment manufacturer Tianyuan Garments Co. sealed a deal to acquire a defunct 100,000-square foot metal fabrications plant in Little Rock, Arkansas.


The $20 million investment would make Tianyuan -- which produces clothes for brands like Adidas, Reebok and Armani -- the first Chinese manufacturer to make clothing in the U.S.


The Chinese firm expects to hire 400 American workers to run the refurbished factory, slated to open in late 2017.


Tianyuan Garment is the second Chinese company in a span of six months to announce it was expanding production to the U.S.


Are the critics getting this? The garment industry is a cut throat business with low margins and yet the Chinese, not Americans, are able to make it work here in the good ole' USA. Now how about that? Add to that Formosa Plastics move to the US and the Quanta announcement and it's clear that politics and whining aside, the Asian are smart enough to think business first and not excuses. I still can't get over garments coming back to the U.S. Who saw that one coming?


And tomorrow President Elect Donald Trump and VP Elect Mike Pence will be in Indiana, and more specifically, at the Carrier air conditioning plant to announce that 1,000 jobs will stay in the U.S. after Carrier had said in February that their plant was closing and moving to Mexico. I'm sure it's the tax incentives that Trump is proposing that helped this deal and the threat of hitting Carrier with a 35% tariff for making the air conditioners in Mexico and thinking that they could just ship them back to the US tax free.


There's also been a lot of noise lately about visas for tech workers being affected. The Guardian reported last week that "Under the H-1B visa scheme, 65,000 workers and another 20,000 graduate student workers are admitted to the US each year. The tech industry, which has lobbied to expand the program, may now have to fight a rear-guard action to protect it, immigration attorneys and lobbyists said."


More than likely Trump won't be an advocate of the H-1B visa scheme, though it's not yet known exactly where Trump is on this issue, for sure. But until it's ironed out, Apple's Tim Cook keeps opening "R&D centers" around the world at an accelerated rate. I'm sure that Cook will simply be hiring foreign engineers and students from abroad and keeping them in these new facilities. Apple has announced more R&D centers this year than any previous year and that's not coincidental. Cook is forward thinking.


Cook called Trump to congratulate him on his victory and President Elect Trump made it clear that there's going to be unprecedented tax relief and incentives to persuade Apple to make products in the U.S. It's not like Apple will stop making iOS and Mac devices in China or India or anywhere else. But if Apple wants to sell products in the U.S., they should be made in the U.S. With the right tax breaks, Apple won't be losing money making products in the U.S.


Tomorrow is December 1 and before we know it Donald Trump will be sworn in as the 45th President and he's going to hit the ground running on several fronts. One of the top three things he's aiming for is tax relief and incentives for businesses to make things in the US again and bring back pride to tradesmen who have been hurt under the one-sided NAFTA trade deal signed in by Bill Clinton.


There are so many positives for Silicon Valley if they stopped whining and got down to business like the Chinese are. Why not dream again. Why not create the world's first smart super highway for smart cars from San Francisco to Boston? Why not invest in smart car factories and next-gen aircraft? Why not promote and accelerate the iPad program for education?


The stupid side of Silicon Valley reared its ugly head when Trump won the election and we reported on that. Now it's time for the brainiacs in Silicon Valley to step up to the plate and meet with President Elect Trump to ignite a new wave of investment in bold projects and to accelerate diversity in the workplace instead of fearing the boogeyman. The Chinese are getting down to business in the U.S. and it's about time for U.S. companies to do the same.


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