Job outsourcing has been one of the key issues of all recent election campaigns.

Question

Job outsourcing has been one of the key issues of all recent election campaigns. Many Americans believe that job outsourcing must be stopped, though some disagree and believe that job outsourcing is good for the US economy. In any case, public opinion polls consistently show that Americans see job outsourcing as a critical issue and the Government cannot ignore it. With unemployment remaining at the record high, the Government is considering all possible options and scenarios for dealing with the economic crisis and pleasing the voters. Nothing is off the table, including banning job outsourcing all together. You are invited to join the Presidential Advisory Board on International Business and offer your forecast and evaluation of consequences for the following extreme scenario: A complete ban on imports of all product groups that were predominantly manufactured in the US as of 1975 and are now imported from China, Mexico and other low-labor-cost countries. Essentially the new law will ban all imports of electronics, toys, apparel, cars, and many other general consumer goods. That means that all American companies that moved their production to other countries will have to return back to America if they want to sell their products in America. Along with other experts, you are asked to predict and evaluate the economic consequences of the plan. If you believe the effect may depend on (vary by) product group, region, population segment, business size, etc. you may provide additional explanation for the difference. Will the variety of consumer products expand or shrink? Why? First, state the trend

Explanation / Answer

100% Import ban is not a solid solution for the current crisis of US economy. Instead of that it is necessary to study the products which are getting imported and prepare a master data that can related to production of US vs (production of other countries + Import charges). Thus it will come to know which all are the value added products if its gets produced at home country itself. Labour and overall operational cost Is higher in US. In that labour cost rationalisation has to implement as per the world standard and considering US living cost as well. Some important way of analysis are:

Immediate ban of import goods will definitely shrink the consumer products, as US might not able to meet the demand within short span of time. This will results in product crisis and increasing price of necessity products and apparently will create a black market.

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