Free Trade

Trump Campaigned on Saving Factory Jobs, but U.S. Manufacturing Just Went Through a Year-Long Recession 

Trump's trade war has harmed the very industries and workers he aimed to help. 

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One way to think about President Trump's electoral victory was as a referendum on the nation's changing economy, in which the manufacturing jobs of the 20th century were giving way to service-sector employment of the 21st. 

Trump won an electoral college victory by flipping votes in the industrial midwest, where those shifts have been most jarringly apparent. His inaugural address lamented that "factories shuttered and left our shores, with not even a thought about the millions upon millions of American workers left behind." His campaign slogan, Make America Great Again, was at least in part a nostalgic appeal to an old economic model, in which manufacturing employment and output was a form of national greatness. 

But although it is true that America's economy has, on the whole, performed admirably well under Trump, with unemployment numbers hovering near historic lows, one of the notable dark spots over the last year has been manufacturing jobs—particularly those in the upper midwest. 

Last week, the Federal Reserve reported that U.S. manufacturing was in a recession for all of 2019. This wasn't slow growth; the sector actually became smaller. The slowdown was relatively mild, with factory production shrinking by about 1.3 percent. But it was the worst performance since 2015, the year that Trump started his presidential campaign. Under Trump, the manufacturing economy has returned to the Obama era. 

Manufacturers have a clear culprit in mind for the sector's poor performance. As The Washington Post notes in a report on the Federal Reserve data, the uncertainty and increased costs surrounding Trump's trade war, which was billed as a way of supporting American factory jobs, has instead wreaked havoc on an export-heavy sector that relies on the global flow of goods to operate. Trump's interventions were intended to prop up U.S. manufacturing. But they backfired, harming the people he claimed to help—who also happen to be some of the people who played a crucial part in his election. 

And while manufacturers did add jobs during the first two years of Trump's presidency, the largest share of those jobs weren't in the nation's old industrial heartland, but in the sunbelt and the West. In states like Pennsylvania and Wisconsin, manufacturing employment has fallen. 

As Reuters reported last year, there were signs of serious manufacturing sector weakness in five of the six states that flipped from twice supporting President Obama to backing President Trump in 2016. 

Nor are manufacturing jobs the only ones to be hit by trade costs and uncertainty. As a New York Times report notes, middle-wage job growth, which includes manufacturing as well as occupations like mining and construction, slowed considerably over 2019, dropping from 2.6 percent to 1.3 percent, owing to trade-war squabbling. "That slowdown is driving the deceleration of job growth across the American economy," the report notes. Farming, another industry that Trump campaigned on helping, was so harmed by the trade war that the Trump administration ended up spending some $28 billion—more than double the price tag of President Obama's auto bailout—to keep them afloat. 

There is an obvious lesson here, which is that, despite Trump's repeated insistence to the contrary, trade wars are neither good nor easy to win; they raise costs on American consumers and businesses; they add complexity and uncertainty, disrupting supply lines and business plans even when threatened tariffs don't go into effect. They have, in other words, exactly the predictable negative effects that economists have known of and warned about for years. 

But there are also subtler lessons in the perils of sector-specific economic planning, and of expecting too much from a president. Trump's attempts to prop up the manufacturing sector through tariffs and trade restrictions didn't just fail to work; they actively harmed the people they were intended to help. So even as Trump has overseen an economy that has many bright spots, the sector and worker demographic he tried to boost ended up struggling.

You can, of course, chalk this up to Trump's ignorance on trade, or to being captured by hackish advisors who believe that protectionism is its own form of good. But even if you think Trump was well-meaning, trying only to make good on the economic promises of his campaign, the failure of the trade war is worth keeping in mind the next time a politician promises to aid some particular group or industry: When the government tries to help, it often does more harm than good. 

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  1. Actually if reason drilled down on criticism like this it would be better for everyone. Congratulations of finding a legitimate policy disagreement besides Trump is a total poopie head that seems to be the majority of articles written about politics.

    1. This was a good article. I can’t wait to hear how fraught with TDS those Federal Reserve numbers are in the comments section.

      1. You can’t let people you disagree with live in your head like that bruh, maybe get a hobby.

        1. Leo has been seeking medical help for his TDS.

          1. It isn’t working Lolollolo

          2. Drinking a bottle of Wild Turkey and sobbing in the bathroom every night isn’t really “medical help”.

            1. It works well enough for me!

              And it works a BUTT-TON better than listening to Sarah Palin’s Buttplug’s head voices!

              Sad to say, Sarah Palin’s Buttplug (current incarnation, post-identity-theft) has NOT yet figured this out!

              Lesson of the day: Do NOT take therapy from Sarah Palin’s Buttplug’s head voices! Or Sarah Palin’s Buttplug head vices either! They are ALL up to NO good!

        2. What’s your hobby?

          1. loveconstitution1789’s hobby is pro-Trump TDS!

    2. Georgia manufacturing is BOOMING!

      Must be a reason why a bunch of out-of-staters are moving here.

  2. Like I’ve been saying all along — #DrumpfRecession.

    1. #youwereright.

  3. Does it make you feel better to lie to yourselves?

    Because that’s what this is.

    Just go to the report. Read it. Guess what word you don’t see?

    That’s right–‘recession’.

    1. I read the document, and it says that manufacturing production declined by 1.3% as they said in the article. This is the definition of recession.

      Are you saying that manufacturing production did NOT decline year over year?

      1. “This is the a definition of recession, and a stupid one at that”

        FTFY.

        1. Can we PLEASE get the OLD Sarah Palin’s Buttplug back? His comments actually had some substance!

          Also, how is “libertarians for identity theft” working out for you?

          1. It’s making you cry like a bitch, so great!

            Eat shit now Old Mex.

            1. Also, how is “libertarians for multiple personality disorder” working out for you?

          2. Fuck off, Mary.

      2. a time-period or successive Qs or something more to it?

      3. Is it the definition of recession? Is it now?

        “The working definition of a recession is two consecutive quarters of negative economic growth as measured by a country’s gross domestic product (GDP)”

        This seems a bit larger than a 1.6% drop in the growth rate of the manufacturing sector, no?

        Let’s see another one–

        .

        “a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

        A fall in GDP seems to be a commonality when describing a recession.

        Was there a drop in GDP?

        No?

        Ah, so you ARE more comfortable lying to yourselves than accepting the truth.

      4. Look it’s not that our manufacturing is declining. It is just becoming more…selective.

  4. I think Suderman needs to do a bit more analysis of the data.
    https://www.federalreserve.gov/releases/g17/current/default.htm

    By my read, the major impact has been the Auto sector and energy production. Most other industries had minor to light increases. Energy was largely due to a warm december, so that leaves autos as the point of contention.

    This doesn’t necessarily invalidate the point- but the fact that one specific industry is responsible for the loss is noteworthy. It happens to be one of the industries most dependent on global supply chains.

    1. Agree = Suderman needs to do a bit more analysis of the data

      One plausible explanation of the auto data is that the auto industry is making larger capital reinvestments in their supply chains. There is now a tax benefit for doing that domestically, right? Relatedly, the supply chains for auto are undergoing a major transformation as a greater percentage of cars become electrified.

      But maybe someone can explain how a manufacturing recession is precisely defined.

  5. “”This is the definition of recession. “”

    Isn’t the definition of recession two consecutive drops of the GDP?

  6. Short term Suderman strikes again.

  7. > Trump’s attempts to prop up the manufacturing sector through tariffs and trade restrictions didn’t just fail to work; they actively harmed the people they were intended to help.
    By design.
    https://www.bloomberg.com/opinion/articles/2020-01-15/u-s-china-trade-deal-trump-is-the-winner-of-round-one

  8. Factory workers who voted for Trump and lost their jobs can eat their goofy red hats.

    Which, I hope, are tasty and nutritious.

    You should have chosen education over that quick pocket money, clingers.

  9. Bernie voted against the USMCA because it didn’t go far enough.

  10. Simple solution

    The US manufactures about 95 million tons of steel per year.

    There a little over 300 million people in the United States.

    So we pass a law requiring everyone to purchase 1/3 ton of steel we double our output and put America back in the steel business overnight.

    Can’t believe nobody thought of this yet.

    1. Echospinner… Not only do you have a spine of steel and balls of steel… You’ve got brains of steel as well!

      1. I bought some of those pills they advertise on TV to improve your memory. Can’t remember where I put them.

    2. Do it for the #NationalSecurity, right?

      1. Right when they deliver your block of steel they could engrave it with a patriotic message or a flag or something. Or you could opt for the logo of your favorite sports team as an alternative.

        In the event of war the government could just collect the steel reserve from us and melt it down again to make war stuff.

        This plan is really starting to take off.

        1. This plan is really starting to take off.

          It has potential. 🙂

          1. It would take someone with an iron will to see this plan successfully implemented.
            I hope nobody steals the idea.

            1. ^ good one.

  11. Telling the Iraqi people that they should want to be bombed, invaded, and occupied, circa 2003, was a bit much. If the Iraqi people of today are glad they were bombed, invaded, and occupied back in 2003, who am I to argue with them? They know the prices they paid, much of it in the qualitative terms of their own suffering, and only they can say whether it was worth it to them.

    Telling the blue collar workers of the rust belt whether they should be sorry for the trade war is a bit much for the same reasons. Trump seems to have won some concession for American workers–even if he did it partially at the expense of American consumers. Those blue collar workers of the rust belt have been spoiling for a trade fight for a long time, and if they’re glad we had a trade war despite the price they paid, then who are we to tell them how they should feel about their own sacrifices?

    Speaking as an American consumer, I am not glad we had a trade war, but blue collar workers in the manufacturing sector don’t need me or anyone else to tell them how they feel about the price they paid for whatever they got.

    1. We should probably tell them that they made sacrifices, which is what this article does. Most don’t know it and they think protectionism helps their industry.

      1. Meanwhile in the real world…
        https://reason.com/2019/04/22/trumps-washing-machine-tariffs-cleaned-out-consumers/
        Trump’s Washing Machine Tariffs Cleaned Out Consumers
        A new report finds the tariffs raised $82 million for the U.S. Treasury but ended up increasing costs for consumers by about $1.2 billion.

        PROTECTIONISM DOESN’T WORK!!! DUH!!!

        Protect American washing-machine makers from Chinese competition? The FIRST thing that American washing-machine makers do, is jack UP their prices… AND the prices of dryers to boot, too! To SOAK the hell out of all of us consumers!!!

        From the above-linked Reason article about washing machines…

        “All told, those tariffs raised about $82 million for the U.S. Treasury but ended up increasing costs for consumers by about $1.2 billion during 2018 … (deleted). Although the trade policy did cause some manufacturers to shift production from overseas to the United States in an effort to avoid the new tariffs, the 1,800 jobs created by Trump’s washing machine tariffs cost consumers an estimated $820,000 per job.”

        Summary: Nickels and dimes to the USA treasury; boatloads of pain for consumers. USA jobs created? Yes, at GREAT expense! Putting these 1.8 K workers on a super-generous welfare program would have been WAY better for all the rest of us! Plus, you know the WORKERS don’t make super-huge bucks; the goodies flow to the EXECUTIVES at the top of the washing-machine companies! The same ones who play golf with The Donald, and join him for gang-banging Stormy Daniels! Essentially at our expense!

        1. $3.63.

          That’s what it cost each individual consumer to smack China in the face, net 82 million and expand the manufacturing base by 1800 jobs.

          Gotta spread it out, Ken. We’re not a collective.

      2. Trump is very good at appealing to emotions. So here is the golden toilet guy who made his money on luxury resorts and hotels that his audience will never afford.

        He comes to the rust belt and paints a picture of the romantic past when steel, rubber, cars, and coal created a thriving workforce. A time when a man was a man. Your sons and daughters could always count on a job. He is the man who can do it. Forget those effeminate creeps who failed you.

        Brilliant. You are right nothing is going to convince a believer. Faith always wins over facts.

    2. I imagine the vast majority of Iraqi Shia and Kurds loved having the US overthrow Saddam in 2003.

      Then the Shia wanted the US out so they could curb stomp the Sunnis and the Kurds.

  12. I guess I could research the subject but I’m too lazy so I’ll ask a question. If this is a year to year comparison how did 2018 compare to 2017 and previously. I know that the trucking industry had it’s best year ever in 2018 for a variety of reasons some of which the market has since adjusted to. There was a significant decline in revenues in 2019 some of which might be explained by tariffs but there were a lot of other factors as well. Most of us realized that 2018 rates were frankly unsustainable for the long term so the decline was not surprising. I don’t dispute that tariffs have had a negative effect on manufacturing but I suspect it’s a lot more complicated than just that.

    1. I saw somewhere that Boeing’s problems with their 737 Max planes were holding back GDP by something like 0.29%.

  13. ” one of the notable dark spots over the last year has been manufacturing jobs—particularly those in the upper midwest. ”

    Throws a lot of bullshit at the wall. Doesn’t provide numbers. I wonder why.

    The government has job numbers. But this article doesn’t. It’s all a miasma of kinda sorta claims and sorta related numbers and characterizations of claims in other articles.

    In short, it’s the usual propaganda Reason puts out. And some here are still falling for it. Sad.

    1. can I point out that if you are disputing the decline in Midwest MFG jobs and you think that by pointing out that the govt keeps numbers yet that’s all you do, I would say that is a super passive aggressive way to criticize and awfully whiny douche canoeist behavior

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  15. Tariffs did hurt manufacturing but Boeing is a big part of that decline. A doing of their own failures.

  16. Who cares if factories went THROUGH a recession. The word “through” means it is OVER. Even if it is still on, get off your butts and find one of the EXTRA million-plus jobs out there. If you want to work, you cand find a job. Just don’t sit there expecting someone to move THEIR company to YOUR neighbourhood.

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