Friday, August 30, 2019

Hasbro Moving Out of China

Is there anything more profoundly offshored than toy production?  When I was young, toys were usually made on Taiwan.  They were often made of poor quality pot metal.  I am thinking of a Tommy gun cap gun that I had as a firstgrader.  It was really cool for a few weeks at which point, part of the interior mechanism broke.

8/28/19 CNBC:
Hasbro shifting its business out of China has been positive for the company, according to its CEO. “It’s gone very well for us,” Brian Goldner told CNBC on Tuesday.
The toy company has been focused on diversifying its manufacturing operations since 2012 due to “enterprise risk reasons,” he said.
“We’re seeing great opportunities in VietnamIndia and other territories like Mexico. We’re doing even more in the U.S. We brought Play-Doh back to the U.S. last year, ” Goldner said on “Squawk on the Street. ”
As the U.S.-China trade dispute has intensified over the past month, President Donald Trump last week urged U.S. companies to leave China. He said in a tweet, “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
Of course, Trump has no authority to order American companies out of China, but like Hasbro, many American companies can see that building in America (or at least outside China, which will likely be a military opponent in the next couple decades) makes sense.

1 comment:

BFR said...

"Of course, Trump has no authority to order American companies out of China"

He may not have authority to make them physically leave China, but he has the authority to prevent them from continuing a business transaction.

Review 50 USC §§1701–1707: International Emergency Economic Powers Act (IEEPA)

The law authorizes the president to declare the existence of an "unusual and extraordinary threat...to the...economy of the United States" that originates "in whole or substantial part outside the United States." It further authorizes the president, after such a declaration, to block transactions and freeze assets to deal with the threat.

So yes, he does have authority to interdict business ventures with particularized and identified foreign actors.