October 28, 2019
October 2019 eNewsletter
October 2019 E-News: Progress on Currency and Workforce While Trade War Simmers
Despite the tentative Phase 1 agreement, the trade war continues. The Reshoring Initiative maintains that to be effective long-term, tariffs would have to be uniform and consistent across all products, across all counties and over time, rather than selective, sporadic and unpredictable. Those characteristics are best embodied in a VAT (value-added tax), which most economists agree is the right solution but impossible for Congress to pass. The impact of the current tariff program is dependent on the final outcome of the trade negotiations. Meanwhile, progress is also being made in other areas. |
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In the News The Department of Labor recently announced Apprenticeships: Closing the Skills Gaps – The program provides an additional $100 million to develop apprenticeship programs, including in advanced manufacturing.
Senators Baldwin (D-WI) and Hawley (R-MO) have introduced the Competitive Dollar for Jobs and Prosperity Act – This bill would implement a market access charge (MAC) for foreign investors (companies, individuals and countries) in U.S. assets, primarily financial. Currently, by seeking financial security in the U.S., these investments drive up the value of the dollar, preventing an adjustment that would eliminate the trade deficit. The purpose is to provide a mechanism to reduce the value of the U.S. dollar, making U.S. manufacturing more competitive. In 5 Smart Reasons to Tax Foreign Capital, Michael Pettis explains "Bringing the U.S. dollar into alignment could add nearly $1 trillion to America’s GDP, create more than five million new U.S. jobs and raise more than $2 trillion in tax revenue over six years." Harry met with and has been advising Sen. Baldwin’s office.
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Harry Moser attended the first meeting at the Department of Commerce in Washington on Sept 2. Commerce Secretary Ross is 5th from the left in the left row.
We would like to hear from you, our readers, about your ideas on workforce development, competitiveness and regulations so we can submit them to the Commerce Department. Please email your suggestions directly to harry.moser@reshorenow.org.
Reshoring wins another debate – The NG Manufacturing Summit recently hosted "Reshoring vs. Offshoring, the Great Debate", in which arguments were presented for each side. 64% of audience members chose reshoring as the better business strategy. Follow the link for details. The Initiative helped the reshoring side prep for the debate.
The Reshoring Initiative, PMA, AMT and NTMA Launch 3rd Annual National Metalworking Reshoring Award – Visit the link for application details.
The Reshoring Initiative has been busy responding to media requests for data on the jobs impact of the tariffs – See the articles below to see our advocacy in action:
New York Times - Trump’s Push to Bring Back Jobs to US Shows Limited Results
PRI’s The World - Are manufacturing jobs coming back to the US? – interview with Harry Moser
IMTS – Forget Utopia, Rethink Reshoring
Trade and Industry Development – How Will Tariffs Impact Reshoring in 2019?
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A Variety of Perspectives on Tariffs Emerge
A study by the Coalition for a Prosperous America (CPA) suggests an across-the-board China tariff would produce more jobs, increased GDP – "A permanent, across-the-board, 25 percent tariff on all U.S. imports from China would deliver significant, tangible benefits to the U.S. economy," said CPA Chief Economist Jeff Ferry. "The tariff would stimulate domestic production, beginning with small increases in U.S. manufacturing and escalating over time. The certainty of a permanent tariff would be more effective than today’s tariffs and would speed up business decisions to move production out of China, with a portion of that production coming back home." The CPA found that the overall stimulus to the U.S. economy would result in a $167 billion boost to U.S. GDP, along with 1.05 million additional jobs, by 2024. The study won the prestigious Edmund A. Mennis Award from the National Association for Business Economics (NABE)
In 2018 manufacturing continued to lead sector categories in terms of NFDI (new foreign direct investment) – According to the US Bureau of Economic Analysis, "Manufacturing accounted for a much larger proportion of new [e.g. greenfield] FDI (67%) than in 2017 (40%). The leading manufacturing subcategory for 2018 is chemicals, accounting for 70% of the manufacturing sector value. The leading sectors in 2018 after manufacturing, in order of NFDI value, are real estate (7%), information (publishing and telecommunication) (5%), retail trade (5%) and professional consulting services (3%)." This data shows that the U.S. is increasingly a good place to produce things. Foreign companies understand it better than most U.S. companies.
Tariffs and Trade War Nudge Consumers Toward Buying Made-in-America Goods – One quarter of consumers claim they’ll align their loyalties to Made-in-America goods in reaction to the trade war, according to Shopkick.
Consumers and retailers encourage local sourcing
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