Dan Collins: Tariffs and the Future of US Manufacturing — #85
May 8, 2025
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Dan Collins, Founder of Tyrell Chemical, offers a wealth of insights drawn from two decades of experience with companies like GM in China. He discusses the implications of tariffs on U.S. manufacturing, the challenges of reindustrialization, and the chaotic state of global supply chains. Delving into the U.S.-China trade relationship, he highlights the competitive dynamics in the automotive sector and the semiconductor industry. Collins also critiques China's educational transformation and the future strategies necessary for revitalizing U.S. manufacturing.
Dan Collins highlights the prolonged deindustrialization in America, emphasizing the need for companies to prioritize community well-being over short-term profits.
He discusses the transformative impact of China's economic reforms, showcasing how rapid industrialization and education advancements have reshaped the workforce dynamics.
The conversation stresses the complications surrounding U.S.-China trade relations, advocating for a measured approach to tariffs to stabilize supply chains and foster mutual growth.
Deep dives
Impact of Deindustrialization in America
The speaker shares personal experiences growing up in Michigan during a prolonged deindustrialization period, which they describe as a 30-year recession. They observed factories closing and friends struggling to find decent jobs, leading to a broader conversation about the neglect shown by company leaders focused on short-term bonuses over long-term community well-being. This reflects a systemic issue where corporate interests overshadow the social impacts of such decisions. The conversation highlights the need for a sustainable economic strategy that considers the health of local communities alongside profits.
Experiencing Economic Change in China
Dan Collins recounts his unexpected two-decade journey in China, beginning with an exchange program at Tsinghua University, a prestigious institution in Beijing. He observed the transition of China's economy during a time of significant reform and growth, as the country shifted from state-controlled enterprises to a more open market model. This allowed for rapid industrialization and the rise of competitive private enterprises, resulting in a substantial increase in the number of university graduates capable of contributing to technological advancements. The speaker emphasizes the drastic transformation of China’s economic landscape and the impact it had on the workforce and education system.
Trade Relations and Joint Ventures
The discussion explores the complexities of U.S.-China trade relations, focusing on joint ventures established by American companies to access the Chinese market. It highlights how multinationals like GM entered into agreements that included technology and knowledge transfer, viewing these partnerships as necessary for entering a lucrative market. The speaker points out that, while many Americans feel that jobs have been 'stolen' and intellectual property misappropriated, these deals were often made with the understanding of mutual benefit. This nuance complicates the narrative surrounding deindustrialization and the perception of outsourcing labor.
Human Capital and Manufacturing Challenges
Collins discusses the significant increase in human capital within China, stating that the fraction of individuals eligible for higher education has skyrocketed from 5% to over 50% in recent decades. This swift upskilling of the workforce has led to a drastic increase in expertise across various industries, posing new challenges for the U.S. as it seeks to maintain its technological edge. He expresses concern that the U.S. fails to recognize the scale and depth of China's industrial and educational advancements. Consequently, there's an urgency for the U.S. to focus on reindustrializing its economy to compete effectively.
Navigating Tariffs and Future Manufacturing
The conversation turns to the impact of high tariffs imposed on Chinese goods, which threaten the stability of supply chains and consequently the U.S. economy. The speaker warns that a sudden disruption in imports could lead to severe shortages and rising prices for essential goods. There's a call for a more measured approach to tariffs that allows U.S. companies to adapt gradually rather than abruptly. Ultimately, the discussion emphasizes the importance of collaboration with China to promote mutual economic growth while safeguarding both countries' interests in the global market.
Dan Collins is Founder of Tyrell Chemical. He studied at Tsinghua University and spent 20 years working for companies like General Motors in China, helping to localize automotive manufacturing. Dan and Steve discuss tariffs, deindustrialization in America, the Go-Go days of rapid economic growth in PRC, and the future of the US-China relationship.
(01:25) - Dan's Early Life and Education in Michigan
(02:30) - Experiences in China, Tsinghua University
(05:42) - China's Educational and Economic Transformation
(14:39) - US-China Trade Relations and Joint Ventures
(41:48) - China's Auto Market
(42:38) - Weaponization of Customs and Nationalism
(43:20) - Impact of Tariffs on US Manufacturing
(44:28) - Chaos in Global Trade and Supply Chains
(49:34) - The Golden Screw Theory and Manufacturing Dependence
(51:50) - Strategies for Reindustrializing the US
Music used with permission from Blade Runner Blues Livestream improvisation by State Azure.
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Steve Hsu is Professor of Theoretical Physics and of Computational Mathematics, Science, and Engineering at Michigan State University. Previously, he was Senior Vice President for Research and Innovation at MSU and Director of the Institute of Theoretical Science at the University of Oregon. Hsu is a startup founder (SuperFocus.ai, SafeWeb, Genomic Prediction, Othram) and advisor to venture capital and other investment firms. He was educated at Caltech and Berkeley, was a Harvard Junior Fellow, and has held faculty positions at Yale, the University of Oregon, and MSU. Please send any questions or suggestions to manifold1podcast@gmail.com or Steve on X @hsu_steve.
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