State of the Union

Trump Admitted His Trade Policies Have Hurt Manufacturing Jobs in His State of the Union, but You Probably Missed It

American manufacturing has been in a recession for the past year.

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It was a blink-and-you'll-miss-it moment within President Donald Trump's State of the Union address Tuesday night, but the president appeared to acknowledge that his trade policies haven't been a winner for American manufacturing.

How else to explain this bit of modesty from the otherwise braggadocious Trump? Here's what the president said [emphasis mine]:

"After losing 60,000 factories under the previous two administrations, America has now gained 12,000 new factories under my Administration with thousands upon thousands of plants and factories being planned or built. We have created over half a million new manufacturing jobs."

That sounds pretty impressive. Unless you know that Trump said this during last year's State of the Union: "We have created 5.3 million new jobs and, importantly, added 600,000 new manufacturing jobs, something which almost everyone said was impossible to do."

There's enough ambiguity—probably on purpose—in what Trump said tonight to make it tough to say he's lowering his boasts. But the fact of that matter is that manufacturing job growth has been in recession, according to the Federal Reserve, for most of the past year. That's largely thanks to the very trade policies that the Trump administration continues to say will help that sector of the economy.

According to the Bureau of Labor Statistics, America had 12.3 million manufacturing jobs in January 2017 when Trump took office. That was up from a historical low of 11.4 million such jobs in March 2010 at the trough of Great Recession. By last February, there were 12.8 manufacturing jobs—an increase of just over 500,000 during his tenure, but we'll let the president slide for a slight overestimation there.

Now? There are still 12.8 million manufacturing jobs in America.

Rather than accelerating manufacturing job growth, it seems like Trump has presided over a notable slowdown.

Indeed, when you look at the underlying factors that drive job growth, things actually look worse. Business investment has declined for three consecutive quarters and actually fell into negative territory last year. At the same time, orders for new U.S.-made goods dropped, and business confidence has declined.

Contra Trump, these are not signals that businesses are making the necessary expenditures to build more factories and increase jobs. And Trump's tariffs have extracted $46 billion out of American companies since March 2018, which probably helps explain why it has been difficult to expand.

It's true that the signing of a new North American trade pact and a "Phase One" deal with China—which is mostly just an agreement to avoid further escalations in the trade war—are likely to restore some confidence, and may spur investment this year.

But the fact remains that Trump's bellicose trade policies have been a self-inflicted wound on an otherwise strong economy. Maybe that's because Trump is ignorant about the basics of global trade. Maybe it's because his advisors are giving him bad advice.

Either way, the fact that the White House couldn't find a better way to spin a manufacturing recession at the State of the Union says a lot about how economic reality is dealing a blow to the Trump administration's protectionist fantasies.

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  2. Whether or not you agree with Trump’s policies — and I for the most part do not — you cannot deny that his State of the Union Address was a masterful stump speech. What’s more, every Democrat in that chamber tonight knew it. It was written so eloquently in their expressions of abject despair and defeat, and it was sweet to behold. Reuniting a four-times-deployed soldier with his wife and young children on national TV was a stroke of genius. Reducing a career blowhard like Rush Limbaugh to tears in the halls of Congress was a masterful move. Hailing the achievements of a newly minted centenarian African American general and awarding a scholarship to an ambitious black girl in front of the whole world were the salvos of a ruthless tactician crushing his enemies under his feet.

    And I loved it.

    1. Yes, it was a strong nod to black voters.

      One missed opportunity was when he said black unemployment was at an all time low and the Donkeys sat on their hands. He should have paused, waved his hand towards them, and said: “well, I guess some people are not in favor of low black unemployment. How dare you!”

    2. Yup. More and more Americans dont believe media whores so how do you know what is true and what is not?

      Watch the Democrat’s actions. If they go after Trump, then Trump is doing something good for America.

      If Trump mentions how his government policy helped pave the way for lowest Black American unemployment in over 60 years and the Democrats get pissed, then you know its true.

      1. Same with unreason really. The more Propaganda articles they put out, the more you know whose Team they are on.

        If unreason says something, it’s almost a certainty that the opposite is true.

  3. Didn’t watch but heard Pelosi tore up her copy of the speech and stomped out. Asked by a reporter why, she said it was a dirty speech. Could it be the Orange one slipped Nancy an filthy expletive laden document just for her?

    1. Does Nancy realize that just makes her look petty?

      1. And talking of petty, doesn’t Mr Boehm realise that pretending that Trump “admitted that his trade policies have hurt manufacturing jobs” tends to make the intelligent reader more likely to ignore his column as teenage Never Trumpery ?

        Yeah, we missed it, Eric. Because Trump didn’t say it. It’s not his analysis it’s yours. The figures you quote may indicate that manufacturing jobs have fallen back over the past year, and your analysis that it’s the fault of Trump’s trade policies may be right.

        But Trump has not signed on to your analysis of the cause, even if you are correct about the number of manufacturing jobs.

        Why not write a straight column arguing your point, rather than hyping it with a big fat mendacious headline ? It’s supposed to be “Reason” isn’t it ?

        Not “Hissy Fit”

        1. It’s “Reasons” now.

        2. +10000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

  4. Boehm, it seems you’re trying to say “we created 100k less manufacturing jobs this year than we did last year” is the same as “we lost 100k manufacturing jobs”.

    Also…you act like trump intends all these tariffs and trade wars to be permanent when he’s clearly stated all along these are the means, not the end. We all knew things could get dicey for a period of time in China…but that’s a risk most of us were willing to take in order to try gaining some control over the markets they rig and the I.p. They try to steal.

    Why can’t you comprehend that even though you don’t like him, trump is the first president in our lives to stick up for American industry against China. It may not even work, although i think it is given Chinas economy was nearly ground to a halt by our tariffs and their wicked debt load, but trump will score a lot of points for being the first to try. And that was pre coronovirus…trump might have China by the balls soon. They already removed import tariffs on all u.s. Medical supplies to fight coronovairus, even including ford and Chevy ambulances. China might not have the stomach (get it, virus joke) to keep up all their taxes much longer if the situation deteriorates further.

    1. It is sad when even Krugman and WaPo are begrudgingly admitting the retaliatory tariffs are having a positive effect. It takes quite an ignorant person to continue to ignore the bad actor China has been for decades and the estimated billions of market losses from theft of IP and such. Boehm seems to bathe on thos ignorance.

    2. Why can’t you comprehend that even though you don’t like him, trump is the first president in our lives to stick up for American industry against China.

      Because merchantilism shit the bed over two centuries ago when modern economics was created by Adam Smith and built upon by Hazlitt, Bastiat, Hayek, Friedman, Sowell…

      All Trump has done is reanimated the corpse of a thoroughly debunked economic theory that prioritizes established industry over the consumer.

      1. Not at all. He is wielding one of the few weapons he has to get trade with China to be even handed. Note that he keeps reducing tariffs when he gets a positive response. Tariffs are not permanent policy,mere tactics. Are you too dense to see that?

        1. I see. So he knows more about economics than, well, everyone.

          He should get a Nobel Prize!

          derp

          1. False appeal to authority there. That is why your argument is so bad. Even fucking Krugman admitted last week there are positive signs from china.

            The very fact that you think all economists can ever agree on something belies your honesty and knowledge of economics.

            1. Oh I get it. Only Trump supporters and people with graduate degrees are allowed to comment on economic issues? Is that about it?

            2. You need to call up George Mason University and have them fire Don Boudreaux for incompetence. You obviously know more than a rube with PHDs in both Law and Economics.

              1. And fire Veronique de Rugy, what do French know?
                And fire Hayek, you can’t trust Germans.
                And remove Adam Smith from the libraries, he’s old and dead and doesn’t even know about Keynes.
                And remove David Ricardo, he has a stupid wop name, anyway.
                And purge Von Mises, another kraut bastard.
                And, purge from all publications the fact that globalization and free trade have lifted more people out of poverty than any other development in the history of mankind in only the span of 30 years.

                1. For continuous use of tariffs, I agree with these folks. But when a nation doesn’t allow fair trade, coercing companies into giving up IP protection, other tools are appropriate. Temporary tariffs are an appropriate tool.

                  Think of tasing a physically abusive husband. The taser is temporary, not long lasting.

                  1. They are not forcing anyone. Trade is trade. If Apple wants to trade or build a factory somewhere they do. A tariff is not the way to obtain anything. The longer they exist the more supply chains, sales, and manufacturing will readjust. If you sell lobsters from Maine to Chinese customers and they switch to Canadian suppliers that customer is gone they are not coming back as in one example I read about.

                    Any time the government distorts the market it is a bad thing. Markets are unpredictable as are what another government might do in reaction to a punitive tariff. That is the whole basis of free market economics. Individuals making free choices leads to better outcomes than one man with a sharpie possibly can.

                    1. China is distorting the market with their restrictive policies. Tariffs are being used to convince China to change those policies.

            3. To be fair, sarcasmic doesnt want the USA to succeed and he sure doesn’t want pool Anarchist’s money to start Anarchy-Land.

              Anyone who tries to help America be the best, the most free, and the most powerful economically is an enemy to the Anarchist. America must be destroyed so Anarchy-Land can rise from the ashes.

      2. Lol. Wow… sophistry as fact. No trump has not reanimated a debunked corpse. He is finally applying modern economic theory which includes game theory. The only corpse of a theory is no retaliation ever as you seemingly propose.

        Take the most simple version of game theory, the prisoners dilemma. Cooperation is the optimal outcome. Except in this case the 2nd actor continually takes the plea deal to get less time while you get extra. Knowing your partner is a bad actor it is actually better to not cooperate. This is the simple tit for tat game theory. The same theory that keeps winning at global AI competitions.

        We know China is a bad actor (well those of us who dont deny reality) so trump has issued retaliatory tariffs to counter their bad acts. The goal is to get to a state of cooperation. One that is slowly bearing fruit.

        You and the other simplistic economists here seemingly prefer to ignore actual reality and solely spout freshman year rules.

        1. So why not give him a Nobel Prize in economics? He has obviously proven all of those economist to be wrong. Tear down Smith’s statue and replace it with one of Trump! Four dimensional chess! Anyone who disagrees is an uneducated dumbass! Trump 2020!

          Is that about right?

          1. So now you’re just throwing a tantrum because your dogma has been challenged

            1. The only tantrums I see are from the Trump supporters who routinely whine and cry at Reason for not putting blind support behind everything Dear Leader says and does.

            2. Poor sarcasmic. He will never acknowledge that your comment about him was correct.

              It’s a reasonable and easy thing to say that tariffs worked this time but might not work next time and that be the position.

              Oh no. Folks like sarcasmic cant admit the evidence proves them and their positions wrong. Its how Commies operate too. Deny. Deny. Deny.

              1. Yes, Trump’s tariffs worked.

                They worked for politically connected inefficient non competitive primary manufacturers

                Didn’t work so well for buyers, secondary manufacturers, importers, farmers, consumers, distributors, raw material users….

                1. Your link fell off.

                    1. That’s the short term impact. The importance is longer term when the ChiComs are forced to start paying royalties for IP they use (having stolen it). Hundreds of billion$.

                      Like the corporate tax cut, that short sighted idiots don’t like, its impact will take a while to be felt as new factories are built and others are moved back to the USA.

      3. Here, sarc, from the linked article that you and Boehm are praying no one takes the time to read–

        “For now, however, the longest economic expansion on record looks set to continue, with other data on Tuesday showing consumer confidence surged to a five-month high in January amid optimism over the labor market.”

        Losing again. Sad.

        1. There is no disputing that the economy is doing well. The point of the article is that the rate of growth would be greater without the trade war.

          1. Facts not in evidence.

            In fact, the economy was doing worse before Trump was elected partly because of policies that held back the economy more than these tariffs.

            1. Trump’s economy is growing at 2.1% which is about the long term trend line over the last 30 years.

              About the same trend line as Obama and less than than under Jimmy Carter.

              Let that sink in: lower economic growth than under Jimmy Carter.

              1. Your link fell off.

          2. That’s short term thinking. The trade war impact will be felt in the longer term.

            Finally we have a Prez who can see past the next election.

      4. “All Trump has done is reanimated the corpse of a thoroughly debunked economic theory that prioritizes established industry over the consumer.”

        Is it thoroughly debunked if it appears to be working in modern times?

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  7. Holy fucking shit Boehm, you ignorant fuck. It is common for a slight recession after a boom. It is a natural part of the fucking economy. The cycle includes growth as well as paring off of industries not working.

    Looking at single year slices of an economy is literally the dumbest shit someone who thinks they understand economics can do. Economies are not static year to year. You begrudgingly admit the industry grew under trump but would rather focus on a small period of correction. The idiocy.

    1. Is Trump going to match Obama’s performance on economic growth anytime soon, you bigoted, slack-jawed clinger?

      1. LOL

        No way! As Nobel Prize winner Paul Krugman predicted, the market will “never” recover from the hacked election of 2016 and we’re deep in a “global recession, with no end in sight.” Even a Bernie Sanders economy would be an improvement at this point.

      2. Let’s hope not. That slug paced ‘growth’ was abysmal.

      3. Look presidents are not the economy. Government produces nothing. We pay them for certain things like defense and roads but the government does not produce those either.

        The only thing a president or any other government entity can do with the economy as a whole is screw things up to a greater or lesser extent.

        This is not Trumps America. It is not an extension of his business. Or any of the rest of them. I never give them credit for any growth or good news. You and I do that. They sure as hell can mess things up for the rest of us.

  8. Did Drumpf admit his trade policies have hurt Reason.com’s benefactor Charles Koch? That’s what really matters. Mr. Koch’s net worth has been stagnating in the $58,000,000,000 to $62,000,000,000 range during the #DrumpfRecession.

    #HowLongMustCharlesKochSuffer?

  9. I agree with Trump is getting tough on some of the shitty deals previous pols signed off on that they shouldn’t… We NEVER should have opened up to China without them doing the same for us. We gave away our leverage to get good behavior out of them, so Trump has had to take it away from them, so he can then offer it back.

    I don’t think he has executed nearly as well as could have been done… But the fact is he’s made modest progress, and maybe more in the future.

    You DO realize that sometimes modest short term pain can be offset by greater future gains right?

    This is the ENTIRE basis for investment. One gives up the new TV, new car, new clothes, etc in the here and now that would be cool to own, so one can invest it and buy a BIGGER TV, NICER car, MORE new clothes, in the future. Dealing with China and others while we still have the upper hand must be done, even if it is a pain for us now. I wish he was doing a better job, but a mediocre job of addressing the issues is better than nothing.

    1. Reason prefers feudalism

      1. Um, yeah. Because the free trade Reason promotes is really feudalism while Trump’s protectionism is true free trade. Suuuuure.

        1. If you still believe Reason’s promoting free trade, I’ve got a bridge you might be interested in….

          1. Compared to the trade wars and merchantilistic protectionism you and Trump are selling, yeah. Yeah, they are.

            1. Dude… Again, means to an end.

              It is entirely possible the use leverage to gain long term concessions that will make the short term pain worthwhile.

              Our economy has MAYBE lost a couple tens of billions of dollars… Maybe. If China were to even give us enough additional market access to add 10-20 billion a year to our balance sheet, it would make up for itself in a couple years, and over a long period of time make several fold what the costs were.

              Even this shitty round one seems to be likely to boost things far more than that… So we may well recoup the costs inside of a year or two. How this can confuse people is beyond me.

              1. Correct, vek. They are imbeciles.

          2. Trump offered free trade to our trading partners at the G-7 Summit and Boehm and his band of imbeciles attacked the notion.

  10. The very word “factory” is out of date. Which is why the statement “with thousands upon thousands of plants and factories being planned or built” is so grating on the ears.

    We got rid of those palaces to menial mind-melting labor. Modern manufacturing is no longer unskilled drudgery. Why is the president celebrating drudgery? Let the Chinese be the drudges!

    My company manufacturers. But our manufacturing floor is NOT a plant or a factory. We do have “assembly lines” but they are not on conveyors, simply areas where people work on a product. The only conveyor belt is the one leading to the shipping dock. There’s no one who’s job it is to tight screws all day. Instead everyone is a trained for their specific job. Jobs that I could not possibly due despite my college education, because I have not been trained.

    But maybe that’s an outlier because we’re a tech company with a cleanroom and ESD floors and stuff. So let’s look at my friend. He’s been with his company for thirty years now. Strong manufacturing firm. Once mentioned by the Trumpster himself. Again, no assembly lines, no conveyor belts, no rote drudgery. It’s not clean work either, it’s dirty and sweaty.

    But it ain’t a factory. It ain’t a plant. When break time is over NO ONE says “okay, let’s get back to the factory floor”. That would be silly.

    So why is the president using these outdated terms? Does he really think we’re getting new factories with assembly lines and endlessly tightening screws on widgets and union thugs threatening the foremen? Does he really think there will even be foremen?

    Modern manufacturing is a highly skilled job. Trumps dream of bringing back the 30’s is stupid.

    1. Markets can adjust quickly if it is based on the millions of us making our own choices in our own interest. Governments crush innovation and adaptability.

      No matter how they spin it any attempt by government to relocate jobs, resources, industries, manufacturing, or manipulate markets is destructive.

      Protectionism turns us into serfs dependent on the decisions of our betters.

    2. Ugh.

      The point is, having more advanced factories (which is still the official term for places that manufacture stuff, whether you like it or not) here vs in China is not a bad thing. Robots might be tightening more screws now, but there’s still a guy filling the bin of screws for the machine, or fixing it when it glitches out, etc.

      So don’t be a pedantic twat.

      And there is nothing wrong with using leverage to force China to have a freer market. A couple years worth of minor gyrations is easily made up for by decades of greater market access… Can’t your retards think beyond a quarter or 2 out FFS???

      1. Obviously you are smarter than the retards. Keep planning.

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