Dichotomy About Manufacturing Jobs: Reality vs. Donald Trump

President Donald Trump visited Milwaukee yesterday and scooped up $3 million in campaign donations and extolled the increase in manufacturing jobs resulting from his tariff war. Except…that’s not the reality.

During his speech at Derco Aerospace (a division of Lockheed-Grumman that is being prosecuted for overcharging the US Navy), the president reiterated his fantasy about manufacturing job recovery in the US:

“We’re here today to celebrate the triumphant return of American manufacturing,” Trump said.

“We were laughed at by the rest of the world. We were patsies,” he said about previous trade deals. “It’s not China’s fault that we were stupid. It’s not China’s fault that we allowed it to happen.”

Despite a small increase in manufacturing jobs since the first of the year…the fact is manufacturing being done in China isn’t moving to the US:

The tariffs that President Trump has slapped on Chinese imports haven’t sparked the widespread return of manufacturers to the U.S. that Trump envisioned.

About 41% of American companies are considering moving factories from  China because of the trade war, or have already done so, but fewer than 6% are heading to the U.S., the American Chamber of Commerce in China said in a recent survey.

Companies are largely eyeing Southeast Asia and Mexico.

Manufacturing added 28,000 jobs the first half of the year, the fewest during that period since President Trump took office promising a manufacturing renaissance.

So why aren’t U.S. manufacturers bringing jobs back to the U.S. in droves?

Various companies testified that there is an entire supply chain in China to support their production, but no equivalent network in the U.S.  

For low-cost manufacturing, Southeast Asian countries and Mexico are cheaper. The average monthly factory wage in the U.S. is more than $3,200, compared to $237 in Vietnam, $188 in Indonesia, $425 in Thailand and about $400 in Mexico , according to the data by Trading Economics.

But not to worry, the president has a fix for that:

President Trump tweeted this morning (ed note: July 12, 2019) “Companies will relocate to U.S.” and “If the Tariffs went to at the higher level, they would all come back, and fast.”

I am thinking…on two levels…not so fast!


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