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Home / Business / Did Trump stop the offshoring? It's difficult to say.

Did Trump stop the offshoring? It's difficult to say.



"Big Steel is opening and refurbishing facilities across the country, with automakers heading into the US, including BMW, which has just announced a major new factory – the US is booming!" The President tweeted this week.

Well, maybe. However, it is difficult to say that offshoring and "reshoring", as the opposite effect of job repatriation in one country is known, is extremely difficult to measure.

The answer is important when the Democrats oppose Trump's newly signed replacement for the North American Free Trade Agreement – and because he is making a slow dance with Chinese leader Xi Jinping and European leaders on a series of trade issues to the Union G20- Summit in Argentina.

What We Know: Manufacturing has been recovering since recession depths. Employment rose from 11.5 million jobs in 2010 to nearly 12.8 million today. This was for a variety of reasons, including the advent of low-energy oil and gas fracking and a flood of unemployed people seeking lower wages. Employers are also at greater risk in long global supply chains and have become a just-in-time production strategy that allows traders to respond quickly to changing customer needs when their factories are located on American soil.

But we know it too The trade balance of goods – the difference between what we import and what we export – continued to improve under the Trump administration, reaching $ 77.2 billion in October, compared to $ 67.7 billion at the beginning of his tenure and the second largest gap of all time. That is, American consumers and businesses are buying more foreign material that could be produced in the US, such as: Eg cars.

"It's still a one-way street," says Scott Paul, president of the Alliance for American Manufacturing, which is backed by the United Steelworkers Union and the manufacturers. "We still have a production leaving the US, but you also see some reshoring measures."

There is one source of data that offshoring explicitly measures: Trade Adjustment Assistance, a government subsidy available since 1975 to workers who lose jobs when companies work overseas or restrict competition due to competition from cheaper imports. Use of the program increased during the recession and then returned to more normal levels.

However, this is not yet a perfect benchmark as it is also influenced by the generous funding of the program and the willingness of states to certify applications. This is not very useful for real-time measurements because the application data is posted with a delay. In addition, it misses the more gradual shift of production to other countries.

It's sometimes easy to tell when a job was postponed when the carrier and the air-conditioning and air-conditioning manufacturer said in 2016 that they would move all the work to a plant in Indiana, Mexico – a plan The infamous, if only partially, reversed Trump as elected President.
  GM workers will have job opportunities - but maybe they are not so good
But General Motors said this week he would close five North American plants as well as three more in other parts of the world as the limousine business shrinks in favor of light trucks and SUVs.

Similarly, other companies point to changing demand patterns. For example, United Technologies is currently discontinuing operations at its acquired in 2012 aerospace factory in Chula Vista, California, which will result in a loss of more than 300 jobs. The company says the aircraft components manufactured there since the 1950s were simply not sold anymore.

"We have not found anything that is possible at this location," says Stacey MacNeil, vice president of communications at UTC Aerospace Systems, the division that operates the plant.

The union representing these workers says it's hard to believe that a factory that used to employ more than 10,000 workers shrank to almost nothing in three decades, while Mexico's aviation industry was booming.

"Companies do it all the time," says Owen Herrnstadt, chief of staff of the International Machinists' Association. "They are outsourcing work, investing in other areas, finishing some work on programs that are ending – and then concluding that the program is over, rather than investing in the US plant, making US workers new Programs could stay busy. " [19659024] Ohio Senator: Trump said he wants to help & # 39; In the midst of the closure of GM plants "data-src-mini =" // cdn.cnn.com/cnnnext/dam/assets/181129080327-sen-sherrod-brown-11-29-01-small-169.jpg "data -src-xsmall = "// cdn.cnn.com/cnnnext/dam/assets/181129080327-sen-sherrod-brown-11-29-01-medium-plus-169.jpg" data-src-small = "http : //cdn.cnn.com/cnnnext/dam/assets/181129080327-sen-sherrod-brown-11-29-01-large-169.jpg "data-src-medium =" // cdn.cnn.com/ cnnnext / dam / assets / 181129080327-sen-sherrod-brown-11-29-01-exlarge-169.jpg "data-src-large =" // cdn.cnn.com/cnnnext/dam/assets/181129080327-sense -sherrod-brown-11-29-01-super-169.jpg "data-src-full16x9 =" // cdn.cnn.com/cnnnext/dam/assets/181129080327-sen-sherrod-brown-11-29- 01-full-169.jpg "data-src-mini1x1 =" // cdn.cnn.com/cnnnext/dam/assets/181129080327-sen-sherrod-brown-11-29-01-small-11.jpg "data -demand-load = "not-loaded" data-eq-pts = "mini: 0, xsmall: 221, small: 308, medium: 461, large: 781" src = "data: image / gif; base64, R0lGODlhEAAJAAEAAAAP / ////// wAAACH5BAEAAAIALAAAAAAQAAkAAAIKlI + py + 0Po5yUFQA7 "/ >

And as part of its efforts to withdraw jobs to the US through a revamp of NAFTA jobs, American negotiators convinced Mexico to accept a ruling This would require at least 40% of imported vehicles to be manufactured by workers earning more than $ 16 an hour. This could reduce the pay gap that is causing automakers to shift production south of the border, but would prove difficult to enforce.

"I think on the Mexican side, they think that this is so hard to implement that we do not give up so much," says Gordon Hanson, economics professor at the University of California San Diego.

So far, on the Mexican side of the border, it does not look like offshoring has diminished. Eduardo Saavedra is vice president of business development for the offshore group, which mainly operates US-based customers in Mexico with contract manufacturing, and says the business has continued to grow only under the Trump administration.

"Among our clients, we do not have" I did not meet with people who deal with White House rhetoric, "says Saavedra.

And of course, there's another factor: American companies need responding to retaliatory fees from other countries.

In a survey of 800 manufacturers conducted by IHS Markit in mid-October, respondents averaged that the new US tariffs and the escalating trade war would cause them to more What would shift production abroad 2 years The Exceptions? Metalware and Mechanical Engineering Companies.
Now, there is some evidence that increased offshore activity of multinational US companies can actually increase net jobs in America – however only slightly and with numerous workplace disturbances way.
For this reason, the arb It also urged large state contractors such as United Technologies and Boeing to involve them in the procurement process when producing outside the United States.

Manufacturers say In many cases, manufacturers go abroad just because they do not find enough workers to fill their jobs. Data from the Bureau of Labor Statistics show that a record 506,000 manufacturing jobs were opened in the US in August.

"From an employer's perspective, there is a huge labor shortage," says Scott Jacobs, managing director of the Great Lakes Trade Adjustment Assistance Center, which supports companies that have been hurt by imports. "One of the things that really would help manufacturers is to focus even more on helping communities to help colleges or companies set up their own training programs."

And although the tax reduction package passed last year has significantly reduced US corporate prices, it has also created loopholes that further reduce taxes on offshore revenues, providing companies with new incentives outside of the US to locate.
Tax cuts may have been linked to job retention in the US, says Susan Helper, an economist at Case Western Reserve University, who served under President Barack Obama as chief economist at the Department of Commerce. A bill by Ohio Democratic Sen. Sherrod Brown would eliminate the offshore tax gap for automotive companies that are cutting US jobs while expanding overseas.

"We just gave these companies a blank check, a tax relief that could have been used for all sorts of other things," says Helper. "Why do we let her do that?"


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