Nostalgia for manufacturing will make the US poorer

Welcome! Now that Donald Trump has stopped his “mutual” tariff plans (as predicted Last week newsletter) This publication cannot be the wider US President’s wider USABArmenia to turn America into the “production superpower”.

In his speech on April 2, the Commander-in-Chief instructed the retired AutoWorker to say a few words. “I’m exploding after the factory. [The president’s tariff] Politics is going to return the product into those unknown plants. A number of a number I can’t wait to see what is happening on the road for three or four years. “

How can one debate against this point of view? That’s what I will try to outline here.

First, compassion. In the past four decades, production work in America has decreased. Competitive imports from abroad contributed to the closure of the factory, and the many former industrial regions were unable to recover. (I recommend Peter Santenello Youtube channelwhich makes life in these US countries 🙂

At that time, US income inequality has risen. And the least rich have increased their share of common wealth.

Jim Reid, Deutsche Bank’s Global Macro Researcher believes that the ratio of US wealth is inclined to follow international trade as the world’s GDP share.

Hotspent[This potentially reflects] advantages: [of globalisation] World-supplier of more effective chains, more efficiently market market market, at a lower price to work more efficiently and in developing markets, she wrote to the customer’s note. “

Indeed, the US capital markets have been angry as the reality of the American Protection Agenda. But the President used the stock exchange, his platform, not Wall Street.

The charm of ghost production, then, is clear. But in order to support the president’s plans, it is also necessary to believe that America can, and we must withdraw factory jobs, and these tariffs are the best way to do this.

Trade Secretary Howard Lutnic has taken the recent ambition in the last interview. (It is noteworthy that Trump released smartphones and other consumer electronics from his “mutual” tariffs FridayBut special duties in the field are in the work.)

In any case, if the goal is to recreate the scale and specialization of developing world factories, the US employees will need capital.

But few Americans want to enter industrial work. Eght 2024 CATO research It turned out that only one of the four people think that they would be better in the factory in their current employment. (Most of the “middle class” of Trump today work in non-product manufacturing areas.) The administration is also hostile to immigration.

As for capital, the owners of the factory, its borders will be created in America through increasing import responsibilities. Taking into account the cost of transporting the United States, investors will need a reliable entry and clarity of internal incoming chains, how long will it remain in place? Everyone is in a short supply.

Take Apple for measurement. Dan Ives, Wedbush Analyst, induced Which iPhone manufacturer will need at least three years and $ 30 billion to move the tenth of the US supply chain from Asia?

The administration takes into account that they are “transitive value” on the way to bring blue-collar. And, as the interpretation of Panevek, some are ready to give time.

Even if some factory jobs come back to America, my question is for Trump and his supporters. It is worth paying for it.

It is true that some factory jobs are lost in outsourcing (although automation also played a significant role). But focusing on that loss and striving to restrain the US openness. Thinks of the larger, economical benefits of this reason.

The production of US production has actually increased over the past four decades, even as factory jobs have decreased. The American industry is more effective today. It makes a higher value with a higher salary with fewer employees (and more robots).

In fact, the value of the value added by each employee, the first series of the US Production class is the first among large economies (estimated that almost seven times China). One-fifth of the US exports produced by the United States, which have high research and intensity, such as advanced technology and aerospace products.

The United States is in its part only from China generic World Production Production: The events are America already “Production superintendence. ”

It partially lasted in the upper place of the low salary of low salaries and higher value of the value added. Services, research and development and advanced production. This allowed income, jobs and the economy to grow.

“Americans are now design and engineering products such as tennis shoes and iPhones collected elsewhere,” said Grapu. “They may not work in factories, or even for companies who have factories, but still important rules in production lines.”

Since 1990, the United States has lost more than 5 billion production works. At that time, it scored an 11.8 million role in professional and business services, and in 3.3 million lines, related to multinational networks.

But if the goal of the tariff wall is to force the supply chain to raise the effective parts of the supply chain, it will come at the cost of this higher value. US businesses need to transfer resources to them, which would mean services on services and R & D operations. (As mentioned, foreign capital is unlikely to be expected, and labor is limited.)

This also means accepting higher costs. Given less scale, higher salaries (related to developing economies) and Trump program will increase consumer prices for low-income households, which currently receive cheap products through international markets. Until internal supply networks are not created, the tariffs will have higher import costs the same effect.

Most of the demand for any new production of physical goods must also come from abroad. The high prices of the factory and the cards of our commercial partners will interfere with the tariffs of the action. Americans spend most of their income on services (health, services and entertainment). Many products have also become “dismantled” in the digital world (for example, DVDs, maps).

For measurement, research Tax Fund: The Trump’s share of 232 Sacredity imports steel and aluminum imports for manufacturers (reduction of employment in these industries), has increased consumer prices and damage exports. The Institute of International Economics of the Peterson assessed that the cost of “saving” one job “saving” in the steel manufacturing industries was about $ 650,000. Imagine this with Trump Tariffs regret.

If it will be difficult, unwanted and difficult to create an intensive workshop worker, which is the alternative. Are the former American industrial portions simply accept the relative decline in income?

“We know that the adjustment of the great negative shock is to make the production of employment, including the Great Decline, Automation and Import Competition, and have great long-term consequences for communities.

This means that people and businesses are supported to adapt faster than protecting jobs. This will include planning rules to restore recovery, promoting financial markets more to support investment, training initiatives and a stable competitive policy. (Tariffs increase access to entry and make it harder for small business scale).

Globalization has become a convenient scapegoat for internal policy shortcomings in these areas. Their reservation also pushed more foreign investments and work to work in the United States than defense.

Create economic stability and agility. To give industrial communities the opportunity to answer more than the international trade forces and benefit. It does not work with commercial partners not to be constructively treated with disputes. But persistently maintains the consequences of enhancing the growth of global supply chains.

Instead, the Trump’s plan is for decades. If that’s what his supporters want, they must also be satisfied to make the nation as completely poorer.

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Food for mind

How many “lost to the Ertreinner” and “Lost Marie Treatment” are, and what can be done about them? This IMF Blog: It is noteworthy that the talented children of insecure preferences suffer from their potential.