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Trade Policies: What are the Global Connections Between US Manufacturing Jobs and Eliminating Trade Deficits?

President Trump had a meeting with manufacturing CEOs yesterday, and Rex Tillerson, the Secretary of State, and Department of Homeland Security Secretary John Kelly met with Mexican Foreign Minister Luis Videgaray.

President Trump stated in his meeting that 70,000 factories have closed since China joined the WTO (World Trade Organization) in 2001, and since the US joined NAFTA (North American Free Trade Agreement) in 1994, one third of US manufacturing jobs have been lost. This statement is correct. US manufacturing jobs in 1994 were 18 million, and they dropped to 12 million in 2016, a one-third decline.

A CNN Article in 2016 featured “Trump’s trade talk is ‘bluster’

“Trade likely sped up the shift, but many experts say it was inevitable. It’s unlikely many manufacturing jobs will ever return, even if Trump’s walls get built.

“Trump’s talk on trade is bluster,” says economist Charles Ballard of Michigan State University. “Even if you did [what Trump says], you wouldn’t reverse the technology, which is a very big part of the picture.”

Armchair Politician Comment: The issues are tax reductions and manufacturing job creation.

The quote of Charles Ballard only refers to a wall being built, not US corporate tax deductions, which will be the most important element of President Trumps’ manufacturing and other job growth efforts. There is also the issue of the introduction -of robots in production. However, the issue is whether more US manufacturing jobs can be created, not whether they can return to prior levels.

The Broader Trade Issues Will Be Covered in a later blog post. This will cover the largest trade deficits, which are with Mexico, Germany, Japan and China.

2 comments to Trade Policies: What are the Global Connections Between US Manufacturing Jobs and Eliminating Trade Deficits?

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    • acp


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