President Donald Trump’s stated purpose for his tariffs belies the facts and the intended outcome. My career was in manufacturing for 40 years, and I predict a different result.
Tariffs will increase production costs for many domestic manufacturers. Following are some of my reasons.
As reported in a news article, “factory workers in the USA average $36 an hour with benefits and machine operators have an average annual salary of nearly $45,000 compared to China at $15,000 and Vietnam at $5,000.” It’s no wonder we outsource so much to foreign countries in an effort to be competitive.
Manufacturing jobs, relative to labor costs here, are diminishing in numbers and desirability. They are being rapidly replaced by automated equipment and robots. Tracking resources indicate 8% of total nonfarm employment consists of manufacturing work, down from 22% in 1979. Today, many manufacturing companies find it difficult to hire good workers.
Trump’s strategy is based on bringing back “Made in USA.” Most large manufacturing companies require many years to comply with U.S. infrastructure and consider decisions about location, labor availability and costs, transportation corridors, water supplies, stable electric grids, etc., before building and starting a new factory or manufacturing facility. The decision is complex and expensive and many times abandoned.
Frequent unexplained tariff changes and uncertainties make responsible planning decisions difficult, too.
Finally, over time, we have benefited considerably from many technical and quality ideas that can be attributed to our foreign manufacturing partners. Realize, too, this is a global world where insular thinking and practices may not portend a healthy and prosperous future.
Robert Busteed
Pine