SMM News: Trump is very obsessed with manufacturing and workers' employment, because workers are the most direct reason why he was able to come to power.
As early as June this year, Harley, a local motorcycle company, said that in order to reduce the losses caused by the trade war, Harley would move some of its US production lines overseas. Trump said angrily that Harley was a coward. He will increase taxes on Harley.
In July, Tesla signed a memorandum of cooperation with the Shanghai Municipal Government, and Tesla became the first wholly owned brand to settle in China in the field of new energy vehicles.
In September, Apple said the tariffs would have an impact on Apple products, while Trump tweeted to call on Apple to build new plants in the United States to avoid tariffs. Cook was not right to respond to the tariffs.
Two days ago, US auto giant General Motors published an article on its website, "GM accelerated change," announcing that it would cut 15 percent of its workforce by the end of 2020, cutting 14700 of its workforce, and closing five of its factories in North America. There are plans to shift more investment to electric and self-driving cars. After hearing the news, Trump said he was unhappy, was very disappointed with GM CEO, and was prepared to cut all subsidies to GM, including electric cars.
Trump's thinking is simple and rude, and all the actions that promote the return of manufacturing and the employment of workers in the United States will be praised, and vice versa, they will be criticized and punished. Trump's actions since taking office seem unpredictable, but he has been "following the rules" on the road to reviving manufacturing, but did he get what he wanted? No! In November's mid-term elections, people in Pennsylvania and Michigan, the manufacturing heartland of the United States, voted with their feet and defected to the Democratic Party, giving Trump a heavy blow.
The data show that the manufacturing industry in the United States currently accounts for only 11% of GDP, and is mainly concentrated in the high-end manufacturing industry, which is determined by the division of labor in the world. Through the first industrial transfer, the United States sprinkled its own middle and low-end manufacturing industry to the world, and the United States gradually shifted its focus to the virtual economy dominated by financial and service industries, making the service industry the main driving force of American economic development. At the same time, due to advances in science and technology and production automation, a large number of manual replacement by machines, resulting in a rise in unemployment, some people have done statistics, about 2 to 3 job losses because of automation, only 1 to 3 because of globalization. There are big questions about the success of Mr Trump's manufacturing return plan, at least in many ways.
1. High labor cost
The United States has 60 percent of the middle class, and the highest cost in the United States is not others, but labor. The labor cost of manufacturing in the United States is about nine times that of China, far higher than that of Germany, South Korea, and other countries. If the manufacturing industry continues to return, When the labor force is fully employed, labor costs will continue to rise, and high costs will deter manufacturing enterprises.
2. The Federal Reserve keeps raising interest rates
Raising interest rates will in turn curb investment and return of enterprises, and at the same time, raise interest rates and push up the dollar index, thereby curbing exports and dealing a double blow to the manufacturing industry. The market expects the Federal Reserve to raise interest rates by another 3 to 4 percent this year and next. This is one of the important factors hindering the return of manufacturing industry.
3. trade conflict
Trump believes that globalization is the main factor in the "recession" of the US manufacturing industry and the layoffs of workers. Forcing trade frictions into the world has directly led to a surge in the cost of raw materials and commodity prices in the United States, overburdened consumers and squeezed profits of manufacturers. There is a lot of opposition at home.
On the 27th, nearly 150 trade associations in the United States sent a letter to President Trump urging him to take advantage of the G20 summit meeting between Chinese and US heads of state to resolve trade disputes with China. The association said the settlement of trade disputes with China was "essential" to maintaining the international competitiveness of the United States and supporting US economic growth and employment.
4. Incomplete industrial chain
The supporting system of the US industrial chain is incomplete, and this is also the reason why Apple does not move back to the United States to make it. China is big enough to have a complete industrial chain, and all the spare parts that manufacturers want can be bought in China. These are not available in the United States. The relocation of individual manufacturers to the United States will only add to the cost.
Taken together, it is quite difficult for the United States to revive its manufacturing industry, which cannot be solved by launching trade frictions, and in the future, with the upgrading of automation and the large-scale use of robots, productivity will be increased and labor will be less. Unemployment will become perfectly normal, and it is not wise for Trump to just grab the employment rate and single-handedly act around the world. And the division of the global industrial chain is an established fact, so that the United States to restart middle-and low-end manufacturing is the reverse of history, moving against the trend, which is also the reason why Trump does not win the hearts and minds of the people.
