eli5 how it’s cheaper to manufacture goods in other countries and have them imported back to north america?

Question

I get it’s the poor pay for labor but what about transportation and materials?

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Answer 1

Boat shipping is really really cheap per ton. Checking the charts and its back down to about $2000 to ship a 40 foot container from Shanghai to the Port of LA which can hold about 30 tons of goods. If you can fit 10,000 small widgets in that container then shipping across the ocean only adds $0.20 to the cost of each widget

So then the question becomes does the cost of labor, the factory building, and taxes out weigh the shipping costs?

Its not just labor that’s cheaper outside of North America, its also building and land costs and taxes associated with them. You need to factor in the cost of the labor that goes into the product but also its share of the support staff (technicians, leaders, operations teams, etc) and its share of the cost of the building that you’re making it in and the annual taxes/upkeep associated with that.