By encouraging companies to "come back home," Donald Trump may inadvertently have increased intra-rivalry among manufacturing profit-centers of one company. Say, some company has taken its manufacture of steel to Sweden. Under Trump's dicta, the company must pay an import tax of 25% or so to sell its Swedish-produced steel here in the States.
But suppose it decides to build a smaller plant to make and sell steel in the US. It still is making steel in Sweden but for the US market, it makes and sells steel for its US market. Two profit centers for the same profit. And, then suddenly, the US plant comes up with some innovation that meets not only the US market but also some other markets in the world and captures a greater share of the production outlay. Then, the same company is reaping greater profit by selling steel in its variants!
In short, competition--even in divisions of the same company--can be a spur to ingenuity and innovation!
Thursday, March 29, 2018
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