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August 10, 2020 – A new report by EPI Senior Economist and Director of Trade and Manufacturing Research Robert E. Scott finds that President Trump’s trade policies have failed to curb offshoring—and they have not addressed the root causes of America’s growing trade deficits and the decline of American manufacturing.

In addition to the Trump administration’s overall weak trade agenda, COVID-19—and the administration’s mismanagement of the crisis—has wiped out much of the last decade’s job gains in U.S. manufacturing. Scott explains that unless steps are taken now—to reform our trade policy, to curb dollar overvaluation, to eliminate tax incentives for offshoring, and to rebuild the domestic economy—there won’t be a comeback.

“The Trump administration has taken credit for ‘reshoring’ manufacturing jobs, but the data show that isn’t true. Nearly 1,800 factories have disappeared under Trump between 2016 and 2018,” said Scott. “Additionally, the U.S. trade deficit in manufactured goods rose significantly between 2016 and 2019. In fact, the real U.S. trade deficit has increased in every year since 2016, reducing GDP growth by roughly 0.25% annually over the past three years. Compounded with the devastation left by the coronavirus pandemic, the blue collar manufacturing workers need serious help from policymakers.”

Overall, the U.S. has lost more than 91,000 manufacturing plants and nearly 5 million manufacturing jobs since 1997. The U.S. did gain roughly 500,000 U.S. manufacturing jobs from 2016 to 2019, but much of that was due to increased domestic purchasing spurred by tax cuts and heavy federal spending. Further, these gains are exactly on par with gains across the entire period from 2010 to 2019, during which 166,000 manufacturing jobs were added each year, on average.

However, the 2016–2019 gains did not represent an improvement over prior years in that decade, and even the decade’s overall gains had managed to restore only a fraction of the nearly 5 million manufacturing jobs lost since 1998. Notably, recent years’ manufacturing gains were abruptly wiped out by the COVID-19 crisis—with 740,000 manufacturing jobs lost this year, alone.

“If President Trump wants to take credit for the job growth at the tail end of a decade of recovery from the Great Recession, then he must also own this collapse, thanks to his administration’s mismanagement of the pandemic—including a refusal to organize an effective national response,” said Scott.

Scott explains urgently needed policy solutions to rebuild the decimated manufacturing sector, which will be essential to the coronavirus economic recovery. Restructuring and rebuilding the economy will require rebalancing of U.S. trade as well as massive public investments in infrastructure, clean energy, training, research and development, and the implementation of other industrial policies. Under current government procurement policies and trade rules, much of the public spending for infrastructure and clean energy systems would leak away to foreign providers, in the form of increased imports. Thus, these proposals should all include strong “Buy America” clauses. These investments can also create millions of skilled, high-wage jobs for non-college-educated workers in the U.S., who have been hard hit by the coronavirus downturn—especially Black, Latino, and women workers—and left behind as manufacturing employment shrinks.

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI believes every working person deserves a good job with fair pay, affordable health care, and retirement security. www.epi.org