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Has Trump stopped offshoring? It's hard to tell.



"Big Steel opens and renovates factories across the country. The car companies lean into the United States, including BMW, just announcing a big new plant. The United States is flourishing!" Said the president this week.

Well, maybe. But it's hard to tell definitely because it turns out that offshoring and "reshoring", as the opposite effect of bringing jobs back to a country, is known – is extremely difficult to measure with precision.

The answer applies as Democrats to oppose Trump's recently signed compensation for the North American Free Trade Agreement – and as he engages in a slow dance with Chinese leader Xi Jinping, as well as European leaders over a number of trade issues at the G20 summit in Argentina .

What we know is: Production has jumped since the depths of the recession, with employment from 11.5 million jobs in 2010 to almost 12.8 million today. This happened for a number of reasons, including the increase of oil and gas fragmentation, which provides cheap energy and a number of unemployed who were willing to accept lower pay jobs. Employers also face greater risk in long global supply chains, and have moved to an "just-in-time" production strategy that enables resellers to react quickly to changing customer needs if their plants are on American soil.

Still, we also know that the trade balance in goods – the difference between what we import and what we export – has continued to grow under the Trump administration, reaching $ 77.2 billion in October, from $ 67.7 billion at the beginning of his maturity and the second biggest gap ever. This means that US consumers and businesses buy more things from abroad that can be done in the United States, such as cars.

"It's still a two-way channel," said Scott Paul, president of the Alliance for American Manufacturing, supported by United Steelworkers Union and Manufacturers. "We still have production who leave the United States, but you also see some resistance."

It is a data source that specifically measures offshoring: Trade Adjustment Assistance, a federal subsidy that since 1975 has been available to workers who lose jobs when companies move abroad or only reduce production due to competition from cheaper imports. Use of the program spelled during the recession, and then retreated to more normal levels.

However, it is still not a perfect measure, as it is also affected by how generous funding the program is and how willing states are to certify applications. It is not very useful for real-time measurement, since application data is added with a delay. Moreover, it misses more gradual operation of production to other countries.

Sometimes it's easy to tell when a job has been offshored, like when the oven and air conditioner Carrier said in 2016 that it would move all the work in an Indiana facility to Mexico – a plan that was unknown, only partially , reversed by Trump as presidential electorate.
  GM workers want job opportunities - but they may not be as good
But General Motors said this week that it would kill five North American plants, plus three other other places in the world as it shrinks its then business in favor of light trucks and SUVs.

Other companies have nevertheless quoted change in demand patterns. For example, United Technologies unites operations at its Chula Vista, California airline as it purchased in 2012, resulting in a loss of more than 300 jobs. The company says that the aircraft components that were produced there since the 1950s simply did not sell anymore.

"We have not found anything that's possible at that location," said Stacey MacNeil, communications director for UTC Aerospace Systems, the division that runs the plant.

The trade union representing these workers says it's hard to believe that a plant that once had employed more than 10,000 workers could shrink to almost nothing in three decades, while the Mexican aviation industry slowed down.

"Companies do this all the time," says Owen Herrnstadt, Chief of Staff at the International Association of Machinists. "Outsourcing work, investing elsewhere, do some work on programs that end – and then shut down, says the program ended, instead of investing in the American factory initially, which could keep US workers employed on new programs." [19659024] Ohio Senator: Trump said he wants to help & # 39; mid-closing of GM plants "data-src-mini =" // cdn.cnn.com/cnnnext/dam/assets/181129080327-sen-sherrod-brown-11-29-01-small-169.jpg "data -src-xsmall = "// cdn.cnn.com/cnnnext/dam/assets/181129080327-sen-sherrod-brown-11-29-01-medium-plus-169.jpg" data-src-small = "http : //cdn.cnn.com/cnnnext/dam/assets/181129080327-sen-sherrod-brown-11-29-01-large-169.jpg "data-src-medium =" // cdn.cnn.com/ cnnnext / dam / assets / 181129080327-sen-sherrod-brown-11-29-01-exlarge-169.jpg "data-src-large =" // cdn.cnn.com/cnnnext/dam/assets/181129080327-sen -sherrod-brown-11-29-01-super-169.jpg "data-src-full16x9 =" // cdn.cnn.com/cnnnext/dam/assets/181129080327-sen-sherrod-brown-11-29- 01-full-169.jpg "data-src-mini1x1 =" // cdn.cnn.com/cnnnext/dam/assets/181129080327-sen-sherrod-brown-11-29-01-small-11.jpg "data -demand-load = "not-loaded" data-eq-pts = "mini: 0, xsmall: 221, small: 308, medium: 461, large: 781" src = "data: image / gif; base64, R0lGODlhEAAJAJEAAAAAAP / ////// wAAACH5BAEAAAIALAAAAAAQAAkAAAIKlI + py + 0Po5yUFQA7 "/>

And as part of his efforts to withdraw jobs back to the United States through an overthrow of NAFTA, American dealers persuaded Mexico to Accept a provision that would require at least 40% of imported vehicles to be made by workers earning more than $ 16 per hour. It can ease the pay gap that makes it so attractive for automakers to move production south of the border, but will prove to be very difficult to enforce.

"I think that on the Mexican side they think" this will be so difficult to implement that we do not give up much, "says Gordon Hanson, economics professor at the University of California -San Diego.

So Far from the Mexican side of the border, it seems that offshoring has not slowed down. Eduardo Saavedra is Vice President of Business Development in Offshore Group, which provides contracting in Mexico to most US customers, saying that business has only increased under Trump administration.

"We have not met our customers with people who are concerned with rhetoric coming from the White House," Saavedra said.

And of course, there is another factor: American companies must respond to other countries' retaliatory tariffs as well.

In a survey of 800 producers conducted in mid-October by IHS Markit, respondents said on average that the new US tariffs and increasing trade war would make them a little more likely to relocate production abroad the next two years. The exceptions?
Now there is some evidence that increased offshore activity from US multinational corporations can actually increase net employment in America – but only a little, and with major job disruption along the way.
Therefore, the workers, law firm Good Jobs Nation, have pushed Trump to lean on large federal contractors like United Technologies and Boeing by cutting them in the procurement process if they manufacture outside the United States.

Manufacturing experts say that manufacturers in many cases go abroad because they do not find enough workers to fill the jobs they have. Data from the Bureau of Labor Statistics shows that there were record 506,000 production jobs that were opened in the US in August.

"From an employers perspective, there is a major lack of labor," said Scott Jacobs, Managing Director of the Trade Lakes Assistance Center for Great Lakes, which helps companies that have been harmed by import. "One of the things that will really help manufacturers is an even greater focus on trying to provide communities with the help of colleges or businesses to develop training programs."

And even though the tax cuts package last year reduced US corporate interest rates significantly, it also created loopholes that reduced tax on offshore income even more, giving companies new incentives to find production outside of the United States.
The tax cuts could have been conditional on retaining jobs in the United States, "said Susan Helper, economist at Case Western Reserve University, who served as chief economist at Commerce Department under President Barack Obama. A Bill introduced by the Ohio Democratic Sen. Sherrod Brown would remove offshore tax loopholes for car companies who cut jobs in the United States when they expand abroad.

"We just gave these companies an empty check, a corporate fee that could have been used for all other things," says Helper. "Why do we let them do this?"


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