[quote=Escoguy]Tariffs could be calculated based on differential fringe benefits.
I.e. if a plant in china has 5% direct labor costs but 2% fringe as there is less insurance, social security/medicaid, days off etc, but a US factory has the same direct labor cost and another 5% for fringe as a percentage of the final product price, a tariff could be imposed that offsets that difference.

It would remove the incentive for Chinese employers to screw their employees by making the total compensation comparable even if the absolute level is lower.

I.e. you impose your social policies on your trading partners. not sure if WTO rules allow that.

But if so, it would put pressure on Chinese employers to raise benefits.[/quote]

Those rules would only apply if the company that owns the factory is American. Those rules would not apply to companies that reside outside of the U.S. and given that especially in technology, a bulk of the business is not in the U.S., there’s not much the U.S government could do short of bringing their grievances to the WTO.

That’s why you have a company like Huawei, that does not do a lot a business in the U.S., but pretty much kicking everyone one else’s butt in telecom and networking infrastructure, both U.S. and European companies to the point that they ended up putting most of the European and U.S. companies under (with the exception of Cisco Systems). A customer, like a South American telco company is not going to care the details of “how much better it treats its workers” say Cisco Systems, versus say Huawei (for argument say, let’s assume that’s the case). That south american telco company is only going to care about which system is better an which one is cheaper. (Side note: Huawei has been paying well to poach talent too, also a fair game).

And since most U.S. companies these day derive a significant amount of their business overseas, the rules are often tied to how things are in that country. GM for instance sold more cars in China then they do in the U.S. It’s been like this for some time now.

This is actually one of the problems that companies like Qualcomm has to deal with all the time, though to a lesser extent because of it’s revenue from it’s patent portfolio and licensing. If it were to compete on chip manufacturing itself, it probably wouldn’t last very long without bringing out the cutting edge design, especially since most of the connectivity stuff is quickly getting commoditized.

American companies can afford to pay for a lot more for skills that a lot better than what they can get elsewhere, whether that skill brings in new technology or makes significant improvements over everyone else. But if american companies had to compete on cost and cost alone, they would never win if they could only employ u.s. workers, if the workers have like equal productivity as everyone else in the world.