Source: Min Da is a Corgi
In the past few years, we have had a feeling about doing US legal business. Although Trump said a lot of harsh words in his first term, except for a few key targets, most Chinese companies were able to expand their business in a low-key manner.
But during the Biden era, almost all Chinese companies felt huge compliance pressure. When it came to us, the manifestation was that many new customers who had never done US legal compliance began to look for us to do business.
The reason is actually not complicated. The US federal government's law enforcement capabilities are very limited. If private enterprises cannot be fully mobilized, many policies cannot be implemented with the limited manpower of the federal government.
The power of the US federal government has increased a lot in the past few decades, but the scale is still small. The total number of federal government employees in the United States, from Mars to the bottom of the sea, is only three million.
Take the Customs and Border Protection (CBP) as an example. They are responsible for managing import and export inspections and law enforcement throughout the United States.
They have jurisdiction over more than 300 major border ports, but only 60,000 people in total.
Of course, I am not saying that there are few American civil servants. The broad civil servants in the United States are mainly government employees of the states. There are more than 22 million people in the federal and state governments, which is not a small number at all. But for federal affairs such as tariffs and diplomacy, no matter how many people the state government has, it can't help.
This leads to the fact that the implementation of the United States' foreign policy is always guaranteed by the government's law enforcement.
For example, the Xinjiang-related bills passed during the Biden era have been felt by almost all Chinese companies. However, the U.S. Customs has conducted inspections on only 15,000 items related to the Xinjiang-related bill from 2021 to today, and only more than 8,000 of them have been found to have been refused entry.
During the same period, the United States imported millions of parcels from China every day,
note that it is every day.
With the manpower of the U.S. Customs, it is impossible to inspect imported parcels one by one, and even substantive spot checks cannot be done.
How can the Biden administration ensure the implementation of the bill? They have shifted the compliance pressure to private enterprises in the United States,
required private enterprises to conduct compliance inspections on the supply chain, and the government only supervises ex post in specific circumstances. The vast majority of private American companies have honestly passed on the U.S. government's requirements to Chinese suppliers in their original form. In this way, every U.S. distributor and end customer has become an eyeliner for the U.S. government, and they will closely monitor the supply chain compliance of Chinese suppliers one-on-one.
From this perspective,the government law enforcement resources mobilized by the Biden administration are by no means just tens of thousands of civil servants at the U.S. Customs, but have turned millions and tens of millions of the most knowledgeable companies into extensions of government power.
The same is true for Biden's new energy policy. The Inflation Reduction Act (IRA) passed by the Biden administration provides a tax subsidy of up to $7,500 per new energy vehicle sold in the United States, but there are prerequisites for enjoying the subsidy:
The specific rules are relatively complicated. In simple terms, more than a certain proportion of the batteries of new energy vehicles must be produced in the United States (or the US-Mexico-Canada Free Trade Zone), and the Chinese background of the manufacturer cannot exceed a certain proportion.
In order to apply for subsidies, many of our customers moved their factories to Mexico or Southeast Asia and gradually divested themselves of their Chinese background.
This is entirely a spontaneous behavior of enterprises out of economic interests, with almost no direct supervision by the government.
If the U.S. federal government must be supervised, it is that when applying for tax subsidies, the U.S. Department of Energy and the Department of the Treasury will conduct written reviews of the application materials respectively.
The law enforcement effect achieved by the Biden administration far exceeds the law enforcement costs they paid.
The Biden administration can do the same thing, so why can't the Trump administration?
Because the Biden administration attaches great importance to the feasibility of compliance policies. The premise for enterprises to cooperate with the government in implementing compliance policies is that the enterprises assess that the benefits of complying with compliance policies outweigh the risks of violating the law.
In other words, the government must give enterprises a way out so that they can implement it.
Biden left windows in Mexico and Southeast Asia for new energy companies, trying to gradually weaken China's domestic production capacity. Trump undoubtedly thinks Biden's move is too slow. The big stick policy he adopted seems to occupy media space, but in fact it has pushed a large number of American private enterprises, which are also the main force of US government law enforcement, to the opposite side.
Compared with the Prohibition that actually happened in American history, if the US government precisely strikes Scotch whisky, it may indeed make Scotch whisky disappear from the US market.
However, if the US government passes a nationwide, one-size-fits-all prohibition, the final result can only be large-scale smuggling and private brewing, as happened in history.
It is originally smuggled liquor, so of course it doesn't matter where it is produced. Not only will the policy be impossible to implement, but the Prohibition will eventually be overturned from the bottom up, even if a constitutional amendment is formulated through rigorous procedures.
The same is true for tariff policies.
If the United States imposes a 10% tariff on China, American private companies will pass the cost on to Chinese suppliers, so that American consumers will not feel the price increase.
If the United States imposes a 50% tariff on China, American private enterprises will urge Chinese suppliers to move to Mexico or Southeast Asia, and complete the decoupling of the supply chain between China and the United States on behalf of the US government.
But if the United States imposes high tariffs on the whole world, and the additional tariffs on China add up to more than 100%, I will be optimistic.
Not to mention Chinese companies, American private enterprises will find ways to circumvent the supervision of the US government. These methods of theirs are definitely not welcomed by the US government.
In a word, American private enterprises are the main force of the US government's law enforcement.
When Trump stands on the opposite side of American private enterprises and expects to rely on tens of thousands of federal government employees to promote implementation, his policies will definitely not be truly implemented.
YouQuan
Alex
Kikyo