Mark Omingo

This is very niche, but very representative of the problems that American businesses are facing right now due to the embargo on China. I have a good friend that’s a higher up at a plastics manufacturing firm. They produce plastics for all types of end users. 100% of their production happens in the U.S., and 100% of their customers are in the U.S. too. A pure domestic business. But. The main machinery that their company uses, is exclusively made in China. Nowhere else in the world produces the specific machinery needed to produce the plastic that my friend’s company makes. It’s not a matter of price or convenience. Nobody else makes it. Plastic manufacturing machinery is a very niche, relatively small, capital intensive, highly competitive, and low profit margin business. My friend’s business needs constant replacement of parts due to the amount of wear and tear that happens in producing plastic at industrial levels. Right now, they simply cannot get ahold of parts. The Chinese factories have simply rerouted the business to countries that have more stable trading terms. It’s a commoditized product with universal demand, and the U.S. just doesn’t consume enough of it for the Chinese to bother right now. So, my friend’s company is now sitting on *thousands* of idle machines that cannot run right now because parts have worn down in the past 30 days and the replacements just aren’t coming. Thinking we can restructure in 5 weeks a global trading system that took 50 years to build is some of the most naive and elementary thinking I have ever heard.