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Would the Benefits of Tariffs Outweigh the Threat of Increased Inflation

March 25th, 2025

On March 12, 2025, President Trump “imposed sweeping 25% tariffs on all steel and aluminum imported into the United States…” causing some economists to warn “that broad-based tariffs threaten to drive up prices on everything from food to new homes.” In answering the question of whether tariffs would increase inflation, we can consider whether or not inflation was increased by the imposition of Section 232 tariffs on steel and aluminum and the 301 tariffs levied on roughly half of U.S. imports from China, and we can consider the benefits achieved from these tariffs in 2018.

Tariffs have traditionally had a two-fold purpose: protect American manufacturers from unfair trade practices by mercantilist countries and stimulate domestic production. The Section 232 and 301 tariffs were aimed to protect the domestic steel and aluminum industries from what the government perceived as unfair competition and national security threats. Here are some benefits that were projected from these tariffs:

Section 232 Tariffs:

Protection of Domestic Industries: By imposing tariffs on imported steel and aluminum, the U.S. government intended to protect and support domestic producers of these metals.
Stimulating Job Growth: The tariffs were expected to create and maintain jobs in the U.S. steel and aluminum industries by making imported metals relatively more expensive compared to domestic products.
Infrastructure Development: With a healthier domestic steel and aluminum industry, there was an expectation of increased capacity and capability to supply materials for critical infrastructure projects across the country.

Section 301 Tariffs:

Addressing Intellectual Property Concerns: The Section 301 tariffs targeted imports from China and were aimed at addressing intellectual property theft and unfair trade practices in various industries, including steel and aluminum.
Leveling the Playing Field: By imposing tariffs on Chinese goods, the U.S. sought to level the playing field for domestic steel and aluminum producers who may have been competing against subsidized Chinese products.
Encouraging Fair Trade Practices: The tariffs were intended to push China towards adopting fair trade practices and addressing concerns related to market access, technology transfer, and intellectual property rights.

Here are some specific examples of how the Section 232 and 301 tariffs have benefited the U.S. steel and aluminum industries:

Expanding Existing Plants:
- Example: Nucor Corporation, a leading steel producer in the U.S., announced plans to invest $1.35 billion to build a new steel plate mill in Kentucky after the implementation of tariffs on steel imports under Section 232. This expansion will not only create more jobs but also increase production capacity, catering to the rising demand for steel products in the country.
Building New Plants:
- Example: Alcoa, a prominent aluminum producer, decided to restart its aluminum smelter in Evansville, Indiana, following the tariffs imposed on aluminum imports under Section 232. This move signifies a significant investment in building a new plant that will contribute to the growth of the domestic aluminum industry, providing employment opportunities and supporting the local economy.
Adding Employees:
- Example: U.S. Steel Corporation hired additional employees at its plant in Granite City, Illinois, in response to the tariffs imposed under Section 232. The increased demand for domestic steel prompted the company to bring back workers who were previously laid off and also recruit new talent to support the plant’s operations, showcasing the positive impact of tariffs on job creation within the industry.

Overall, the Section 232 and 301 tariffs have played a crucial role in revitalizing the U.S. steel and aluminum industries by encouraging investments in plant expansions, new construction projects, and workforce expansion, thereby fostering growth and competitiveness in these sectors.

Now, let’s examine whether or not these tariffs increased inflation since going into effect in 2018. The U.S. International Trade Commission (USITC) released the report, Economic Impact of the Section 232 and 301 Tariffs on U.S. Industries in March 2023. “It took an in-depth look at the effects of these tariffs on the importing industries and on industries dependent on them…over the years 2019 through 2021. In every one of the ten industries the authors studied, the 301 tariffs led to significant increases in domestic production.” An article titled “USITC Report Shows Tariffs Boosted U.S. Production” by Jeff Ferry, Chief Economist of the Coalition for a Prosperous America, states that the key points of the report were:

“Section 301 and 232 tariffs boosted production in all twelve of the industries studied.
Price increases in the product categories targeted with tariffs were very small, in the 3%-4% range, contrary to mainstream media narrative.
Most of the tariffs targeted intermediate (industrial) goods. Downstream goods, including consumer goods, saw barely visible tariff-related price increases.
Downstream price increases due to steel and aluminum tariffs were estimated to be 0.2%.
Section 232 steel tariffs unleashed a huge wave of steel investment, likely creating some 20,000 direct jobs.
Tariffs are a valuable tool for generating growth in the U.S. economy.”

Since these tariffs were beneficial for the steel and aluminum industries, additional tariffs would be beneficial to other American manufacturing industries and help reduce our increasing trade deficits.

The Press Release on March 19, 2025 by the Coalition for Prosperous America titled: “Importers Front-Run Global Tariffs; Deficit Expands a Record Breaking 34% in January” by Kenneth Rapoza states:

“January imports rose 10% to $401.2 billion while exports rose at their usual pace, around 1% to $269.8 billion, according to the Bureau of Economic Analysis (BEA)…The January goods deficit is the biggest in years, if not ever.”

The top 10 deficit countries as measured inbillions of dollars were: “China ($29.7), the European Union ($25.5), Switzerland ($22.8), Mexico ($15.5), Ireland ($12.4), Vietnam ($11.9), Canada ($11.3), Germany ($7.6), Taiwan ($7.5) and Japan ($7.4).”

These high trade deficits explain why President Trump is proposing 25% tariffs on imports from China, Canada, and Mexico.

On March 19, 2025, the Coalition for a Prosperous America released a memorandum titled “CPA Recommendations for Implementing Tariffs Pursuant to the America First Trade Policy” by Charles Benoit as a response to the Presidential Memorandum titled America First Trade Policy President Trump issued on his Inauguration Day.

It states: “CPA is strongly supportive of President Trump’s Trade and Tariff Agenda that seeks to broadly reindustrialize the United States and raise significant revenue as outlined in the America First Trade Policy Memorandum.”

“However, CPA cautions against adopting a reciprocal tariff strategy aimed primarily at negotiating lower foreign trade barriers and more favorable investment conditions abroad. A reciprocal tariff strategy that prioritizes foreign governments’ willingness to reduce their trade barriers or be more receptive to foreign investment is in conflict with the stated goals of the America First Trade Policy Memorandum and undermines the predictability and stability American businesses need to confidently invest in long-term domestic production.”

CPA offers the following recommendations as they relate to the use of tariffs for protection, for revenue, and for reciprocity.

Tariffs for Revenue:

CPA fully supports President Trump’s concept of a 10% to 20% supplemental, universal tariff. CPA estimates that even a modest 10% supplemental universal tariff would lead to $728 billion in economic growth and 2.8 million new jobs, while generating $263 billion in new federal revenue to pay for domestic tax cuts.

Tariffs for Protection:

Section 232 is an excellent Presidential tool for protecting American producers, and CPA applauds the Trump Administration for already initiating new Section 232 investigations on copper and lumber.
CPA believes it is essential that entire supply chains be considered for the successful deployment of tariffs. Conveniently, Sections I through XX (1 through 20) of the Harmonized Tariff System (HTS) are organized in this way. The Trump Administration should consider initiating a Section 232 review for each of Sections 1 through 20 of the HTS.

Tariffs for Reciprocity

Reciprocal tariffshaven’t worked to the benefit of the United States ever since the General Agreement on Tariffs and Trade (GATT) went into effect in 1948. When the World Trade Organization was established in 1995, “every WTO Member, including the United States, has pledged maximum tariff rates applicable to every other WTO member…Under the WTO system, there’s no single maximum rate, but rather specific maximum rates — known as ‘bound rates’ — itemized across 5,000+ product categories. Bound rates for each WTO country are listed in that country’s ‘Schedules of Concessions,’ which is annexed to the General Agreement on Tariffs and Trade (GATT.)”

Supposedly level tariff rates haven’t prevented the United States from incurring an ever-increasing trade deficit with its trading partners because of mercantilist practices such as undervalued currency, subsidies to the manufacturing industries of the respective countries, intellectual property theft, and product dumping, among other practices. Thus, CPA concludes: “These reciprocity requirements have all failed while simultaneously pitting American producers against each other.”

Instead,” CPA calls on the Trump Administration to either withdraw from the World Trade Organization entirely, or to “Unbound” the United States’ Schedule of Concessions to the GATT.”

The Trade and Tariffs page of the CPA website states, “The Coalition for a Prosperous America (CPA) has proposed a model that uses a simple, four-level structure of global tariffs at 0%, 15%, 35% and 55% (explained more in the document). CPA projects that this tariff would create 10 million new producer jobs, increasing real household incomes by 10%, grow the economy by 7% and generate $603 billion in new revenue. This revenue is more than sufficient to eliminate income taxes on the large majority of American wage earners.

The economic benefits of imposing tariffs on all imported goods can be summarized to be:

Protection of domestic industries: Tariffs can protect domestic industries from foreign competition by making imported goods more expensive. This can help prevent job losses in sectors that are unable to compete with cheaper imports.
Revenue generation: Tariffs can generate revenue for the government. The revenue collected from tariffs can be used to fund government programs, infrastructure projects, or reduce budget deficits.
Trade balance improvement: By making imported goods more expensive, tariffs can help reduce imports and improve the trade balance of the country. This can help decrease trade deficits and strengthen the economy.
Encouraging domestic production: Higher tariffs can incentivize businesses to produce goods domestically rather than importing them. This can lead to increased investment in domestic production facilities and create jobs.
National security: Imposing tariffs on certain imported goods can also be used as a strategic tool to protect industries that are deemed critical to national security.

In my opinion, these benefits make tariffs an attractive alternative to the free-trade policies that have dominated the past 70 years of international trade. Protecting and encouraging more domestic production would increase manufacturing’s share of the Gross Domestic Product (GDP) and improve the financial wellbeing of many more Americans.

Tags: American manufacturing, trade policy
Posted in Economy, Legislation, Manufacturing, Trade Policy | No Comments »

Is Reshoring Making a Difference and Increasing?

March 12th, 2025

Because the U.S. trade deficit in goods and services continues to surge, many people wonder if reshoring is really happening and whether it is having a beneficial effect and increasing.

According to data from the U.S. Bureau of Economic Analysis, the U.S. trade deficit surged to a new record in January. The “goods and services deficit was $131.4 billion in January,” ballooning up by 34% from December’s deficit of $98.1 billion. “This was the widest deficit for a month on record, dating back to 1992, and the expansion was more than analysts anticipated.”

As usual, China ($29.7) topped the list of countries with which we have trade deficits. The other top ten were the “European Union ($25.5), Switzerland ($22.8), Mexico ($15.5), Ireland ($12.4), Vietnam ($11.9), Canada ($11.3), Germany ($7.6), Taiwan ($7.5), [and] Japan ($7.4).”

The good news is that reshoring is increasing and improving our country’s self-sufficiency capacity for goods essential to our economy and national security according to a number of recent surveys and reports.

The article titled, “The Rise of Onshore Manufacturing” in the January-February 2025 issue of Design2part magazine, reports that “Research released in November by global management consultancy Bain & Company revealed an acceleration in strategic reshoring moves by businesses worldwide—to shift operations and supply chains closer to their home markets…The survey found that the percentage of CEOs and chief operating officers who reported their companies are planning to bring supply chains closer to market rose from 63 percent of those surveyed in 2022, to 81 percent in 2024—a sharp 18 percent increase…Survey results show that the proportion of companies reporting moves to shift operations out of China rose from 55 percent in 2022, to 69 percent in 2024.”

The research stated “Factors such as geopolitical turbulence, rising costs, and pressures for reduced carbon footprints are fueling the trend toward onshoring” In addition, “reshoring as having been further stimulated by the 2022 Inflation Reduction Act (IRA). The IRA offers U.S. companies subsidies and tax credits that incentivize reshoring and near-shoring to boost domestic manufacturing and job creation…Moves toward reshoring of semiconductor manufacturing have also been intensified by the U.S. CHIPS Act, which put in place tax incentives and $52 billion in funding to stimulate U.S. domestic production of chips.”

The results of this research are corroborated by “Kearney’s 2024 annual Reshoring Index (KRI) report, which “concludes that as reshoring and nearshoring activity increase, ‘Made in America, for America’…describes the foreseeable future of industrial manufacturing in the Western hemisphere.”

The KRI was launched in 2018 to track the extent to which manufacturers are reshoring manufacturing from Asia back to the US. “The Reshoring Index is determined by dividing the import of manufactured goods from the 14 Asian low-cost countries by the US domestic gross manufacturing output to calculate a manufacturing import ratio (MIR)”

Based on data from 2023, the report showed “US imports from 14 Asian LCCRs declined by $143 billion, from $1,021 billion in 2022 to $878 billion in 2023. The majority of the drop in Asian LCCR imports was caused by a 20 percent (or $105 billion) reduction in Chinese imports.” However, “Mexico surpassed mainland China as the largest exporter to the US. US imports of Mexican manufacturing goods grew from $320 billion to $422 billion (32 percent).”

The Kearny report also stated: “Thirty-eight percent of manufacturing executives responding are looking to continue to reshore or nearshore operations from mainland China, while another 25 percent are discussing moving operations away from India, and 14 percent are thinking about exiting Vietnam.”

The organization that originated the term “reshoring” is the Reshoring Initiative founded by Harry Moser in 2010 to help manufacturers return manufacturing to the U. S. by changing the mindset from “offshored is cheaper” to “local reduces the Total Cost of Ownership.” A Free Total Cost of Ownership (TCO) worksheet calculator is available at www.reshorenow.org.

The latest e-news by the Reshoring Initiative includes this link to take the annual industry-wide Reshoring Survey that examines manufacturers’ decisions on whether to reshore factories and supply chains. The results of the survey will be released in April.

Last year’s report featuring 2023 data showed that reshoring is continuing to climb, adding 263,583 jobs, the second highest year on record compared to 349,408 jobs in 2022. The preliminary data for 2024 is 244,940. The website reports “As of March 2023, we have recorded over 6400 cases of manufacturing companies that have brought work back to the U.S.” The total number of jobs created by reshoring and FDI came to 1,214,3343 at the end of 2024.

Reprinted with permission of the Reshoring Initiative

We lost 5.8 million jobs between 2000 to 2020, and it’s taken 11 years to add the first million jobs, but only three years to add the second million. Even at the current faster rate, it would take at least another 12-15 years to recoup the 3.8 million jobs we lost.

The key findings of the 2024 report were:

Geopolitical Risk is a top driving force in the reshoring and FDI trends.
Skilled workforce is another top factor
The Southern U.S. remains the most competitive manufacturing region
Nearshoring and trade with allies are becoming more prevalent in the shifting global dynamics
Wall Street is embracing reshoring, with mentions in earnings calls up sharply and
a 300% increase in spending on reshoring and FDI data

Foreign Direct Investment refers to foreign companies either investing in the U.S. by expanding existing U.S. plants or building new plants.

The report noted:

Israel – “the October 7 Hamas attack was too late in 2023 to impact 2023 data, but we anticipate it will have a ripple effect across various industries with broad economic and supply chain disruptions that will influence costs, availability of materials, and production schedules.”
Taiwan – “U. S. Chinese tension has been mounting for several years. Geopoliticians and corporate strategists are anticipating reshoring as insurance.”
China – China has the highest combination of huge trade dependency, single sourcing and geopolitical risk. Reshoring and FDI from China are near historical highs, with reshoring alone at an all-time high of 87%.”

Since these geo-political threats have only increased in the past year, there is a greater incentive to consider reshoring. According to this report, the number of CEOs actively reshoring went from under 10% in 2012 to nearly 90% in 2023.

The latest e-news from the Reshoring Initiative states: “the mere threat of tariffs seems to be doing a sufficient job of defining the objective: the U.S. must boost domestic manufacturing to strengthen national security, reduce the trade deficit, and support economic stability. And the Trump administration appears serious about making that happen. Regardless of how tariffs are implemented, the pressure is driving companies to rethink their supply chains and commit to localization.”

However, the e-news cautions: “While the mere threat of tariffs could be enough to firm up some of the plans, many projects will only move forward when the tariffs are in place and likely to remain in place for at least the next four years. As Michael Todd Speetzen?of Polaris said, “We have a presence that we would be able to leverage if we viewed this as a more permanent situation.” The Reshoring Initiative’s industrial policy says that if tariffs are used, they should be “forever” or at least until trade in the product or with the other country becomes balanced. Companies will not make large investments if the rules are likely to change.”

While tariffs are being criticized by economists and those who would be subject to the tariffs, it appears that tariffs could become the major driver of reshoring by American manufacturers. It could also accelerate Foreign Direct Investment as more foreign companies expand existing plants in the U.S. or build new manufacturing plants in the U.S. to avoid tariffs.

Some economists say that tariffs protect and prop up inefficient American manufacturers that should be allowed to fail if they can’t compete against foreign competitors.

I agree with the Victor Davis Hanson’s opinion about President Trump’s tariffs in his article, “Are Trump’s Tariffs Really Tariffs?” He wrote, Consider the various Trump “tariffs” leveled by an exasperated, and now $36 trillion-indebted, America. Almost none of them meet the traditional definitions of an industry-protecting tariff. Instead, they are the last-gasp tools of American leverage used only when decades of bipartisan diplomacy, summits, entreaties, and empty threats have all failed…The Trump tariffs are the last, desperate effort to reestablish global reciprocity and keep America safe.”

American manufacturers have had to compete on an unlevel playing field in international trade for decades. We need to do whatever it takes to rebuild our manufacturing industry to ensure that we have the commercial and military/defense products needed to keep Americans healthy and safe. If tariffs would level the playing field for American manufacturers and accelerate reshoring significantly, I’m all in favor of implementing tariffs until our trade is balanced.

Posted in General, Made in America, Manufacturing, Reshoring | No Comments »

What are Some Innovative Approaches to Solving the Manufacturing Skills Gap?

February 25th, 2025

The Industry 4.0 technologies of Artificial Intelligence (AI), automation, Internet of things (IoT), and robotics are transforming all sectors of our economy including manufacturing. Manufacturers are using these technologies to increase productivity and capacity, improve quality, analyze data, and improve worker safety. These technologies are actually creating more jobs within operations rather than reducing the number of workers. A 2024 report from Deloitte and the Manufacturing Institute “claims that manufacturers could need as many as 3.8 million new workers by 2033. Roughly 1.9 million of those could go unfilled if current labor gaps remain unsolved.”

Manufacturers need workers at every level, but especially in technical roles. Addressing the growing skills gap in manufacturing is a crucial task that requires a multi-faceted approach. Here are some strategies and innovative approaches that manufacturers can implement to bridge the gap:

Collaboration with Educational Institutions: Establish partnerships with schools, colleges, and technical institutions to develop curriculum that is aligned with the needs of the manufacturing industry. This can include offering apprenticeships, internships, and hands-on training programs.
Industry Partnerships: Collaborate with other companies in the industry to develop joint training programs or share best practices. This can help in addressing common challenges and promoting a culture of continuous learning.
Career Counseling: Education and training institutions, as well as employers, can offer career counseling services to help individuals identify their strengths, interests, and career goals in light of technological changes. This guidance can aid in making informed decisions about education and training pathways.
Personalized Learning Paths: Utilize data analytics and AI to create personalized learning paths for employees based on their skills, interests, and career goals. This can help tailor training programs to individual needs, maximizing learning outcomes.
Upskilling and Reskilling Programs: Provide opportunities for current workers to acquire new skills or upgrade their existing ones through training programs. This can be done through online courses, workshops, and on-the-job training.
Specialized Training: Provide specialized training in emerging technologies like machine learning, robotics, and automation to help individuals transition into new roles and industries that are experiencing growth due to technological advancements.
Microlearning Modules: Implement bite-sized and interactive microlearning modules that employees can access on-demand. This approach allows for quick and targeted skill development, fitting into busy work schedules.
Remote and Virtual Training: Leverage remote and virtual training platforms to reach geographically dispersed employees and provide consistent training experiences. Virtual reality (VR) and augmented reality (AR) can simulate real-world scenarios for hands-on learning.
Cross-Functional Training: Encourage cross-functional training opportunities where employees can learn skills outside their immediate roles. This fosters a culture of collaboration, innovation, and adaptability within the workforce
Mentorship Programs: Establish mentorship programs where experienced employees can coach and guide new hires. This can help in knowledge transfer and skill development among employees.
Diversity and Inclusion Initiatives: Encourage diversity in the manufacturing workforce by implementing programs that attract underrepresented groups, such as women and minorities. This can help bring in new perspectives and talent to the industry.
Certification Programs: Offer certification programs in partnership with industry organizations or educational institutions to validate employees’ skills and expertise. This can enhance employee motivation and career progression opportunities.

With rapid advancements in technology reshaping the job market, it is essential for individuals to adapt and upskill through education and training to remain competitive in their careers.

Skill Development: Education and training programs can help individuals develop the skills needed to thrive in a technology-driven economy. This includes technical skills such as programming, data analysis, and digital literacy, as well as soft skills like problem-solving, adaptability, and creativity.
Lifelong Learning: Continuous education and training encourage a culture of lifelong learning, enabling workers to stay updated with the latest technological trends and job requirements. This ongoing development is essential in a world where job roles will constantly evolve due to new technologies.

In California, there are several community colleges that offer training programs in manufacturing skills to help individuals gain the necessary knowledge and expertise for careers in the manufacturing. industry. Here are some community colleges in California known for providing training in manufacturing skills:

American River College (located in Sacramento) has programs in Welding Technology and Precision Machining that focus on the skills needed for manufacturing industries.
Chaffey College (located in Rancho Cucamonga, San Bernardino County), offers a Manufacturing Technology program that covers topics like blueprint reading, machining, and computer-aided design (CAD).
El Camino College (located in Torrance, L.A. County) offers programs in Engineering Technology that include courses in manufacturing processes, materials, and quality control.
Foothill College (located in Los Altos Hills) offers programs in Advanced Manufacturing Technology that provide hands-on training in areas such as CNC machining, welding, and industrial maintenance.
Sierra College – With campuses in Rocklin, Grass Valley, and Tahoe-Truckee, Sierra College offers a Mechatronics program that combines mechanical and electrical engineering skills essential for modern manufacturing processes.

Orange County

Fullerton College offers programs in Advanced Manufacturing Technology that cover various aspects of manufacturing processes and technologies.
Orange Coast College (located in Costa Mesa) provides training in Industrial Automation Technology, preparing students for careers in automated manufacturing systems.
Santiago Canyon College (located in the city of Orange), provides training in Industrial Technology with a focus on manufacturing-related courses such as machining and industrial automation.

Riverside County:

Norco College provides training in Advanced Manufacturing and Mechatronics, preparing students for careers in high-tech manufacturing industries.
Riverside City College offers programs in Manufacturing Technology that include courses in CNC machining, tooling, and industrial safety.

San Diego County:

MiraCosta College offers extensive certificate program including Automation Technician, Electromechanical Technician, Electronics Technician, Machining, PLC Technician, Robotics Technician, and Welding
Miramar College provides training in Advanced Manufacturing Technology that covers topics such as manufacturing processes, materials, and automation.
San Diego City College offers programs in Manufacturing Engineering Technology with a focus on CNC machining, CAD/CAM, and quality control.

These community colleges in California are just a few examples of institutions that offer training and certificate programs in manufacturing skills to equip individuals with the knowledge and hands-on experience necessary for careers in the manufacturing industry training. Many states are now providing training in manufacturing jobs through their community colleges. Previously, I have written articles about training available at community colleges in North and South Carlina, North Dakota, Ohio, Kentucky, and Texas.

Another way to increase the number of future manufacturing workers is to start training in high schools. Since its founding in 2011, SME PRIME^®(Partnership Response in Manufacturing Education), the signature program of the SME Education Foundation has been partnering private industry with academia to build custom manufacturing and engineering programs in high schools across the country — providing equipment, curriculum, teacher training, and student scholarships along with funding for manufacturing-related extracurricular activities and program sustainability. SME PRIME is the most comprehensive manufacturing and engineering program for high school students in the country.

SME PRIME is provided at no cost to high schools, and the curriculum is tailored to meet local manufacturers’ needs and aligned with state educational standards. The SME Foundation staff coordinates program development, alleviates administrative burdens, and provides ongoing financial support provided to sustain program longevity.

There are now 112 PRIME schools in 23 states serving 10,000 students annually. The success of this program is significant because 91% of PRIME seniors choose manufacturing/engineering post-graduation from high school. There are only six high schools in California, so there is plenty of opportunity for more high schools to become PRIME schools.

Incorporating these innovative approaches and strategies will help organizations build a future-ready workforce equipped with the skills, knowledge, and capabilities needed to thrive in an evolving business landscape. Implementing these innovative approaches and strategies will help the manufacturing industry work towards closing the skills gap and ensuring a well-trained workforce for the future. By investing in education and training programs that cater to the evolving needs of the workforce, society can better equip individuals to navigate the challenges and opportunities brought about by automation and artificial intelligence.

Tags: American manufacturing, career technical training, workforce development
Posted in Manufacturing, Training, Workforce Development | No Comments »

What Executive Orders has President Trump Signed to Help Rebuild American Manufacturing?

January 28th, 2025

In his first week in office, President Trump has already signed several Executive Orders that will implement various strategies to support and enhance the manufacturing sector in the United States. This article highlights the E.O.s that relate to the orders I recommended in my December article, “Rebuilding American Manufacturing Through Executive Orders.”

The White House website provides a detailed list of Executive Orders that President Trump signed in the first 100 hours of his second term as president. The introduction highlighted the following:

“President Trump declared a National Energy Emergency to unlock America’s full energy potential and bring down costs for American families.
President Trump rescinded every one of Joe Biden’s industry-killing, pro-China, and anti-American energy regulations, empowering consumer choice in vehicles, showerheads, toilets, washing machines, lightbulbs, and dishwashers.
President Trump withdrew the United States from the disastrous Paris Climate Agreement that unfairly ripped off our country.
President Trump terminated Biden’s harmful electric vehicle mandate.”

The most important Executive Order that will benefit American manufacturing is AMERICA FIRST TRADE POLICY, signed January 20, 2025

The following provisions specifically take the actions that I recommended in my December article to begin to protect manufacturers from unfair trade practices.

Sec. 2. Addressing Unfair and Unbalanced Trade. (a) The Secretary of Commerce, in consultation with the Secretary of the Treasury and the United States Trade Representative, shall investigate the causes of our country’s large and persistent annual trade deficits in goods, as well as the economic and national security implications and risks resulting from such deficits, and recommend appropriate measures, such as a global supplemental tariff or other policies, to remedy such deficits.

(h) The Secretary of Commerce shall review policies and regulations regarding the application of antidumping and countervailing duty (AD/CVD) laws, including with regard to transnational subsidies, cost adjustments, affiliations, and “zeroing …

(i) The Secretary of the Treasury, the Secretary of Commerce, the Secretary of Homeland Security, and the Senior Counselor for Trade and Manufacturing, in consultation with the United States Trade Representative, shall assess the loss of tariff revenues and the risks from importing counterfeit products and contraband drugs, e.g., fentanyl, that each result from the current implementation of the $800 or less, duty-free de minimis exemption under section 1321 of title 19, United States Code, and shall recommend modifications as warranted to protect both the revenue of the United States and the public health by preventing unlawful importations.

Sec. 3. Economic and Trade Relations with the People’s Republic of China (PRC).

b) The United States Trade Representative shall assess the May 14, 2024, report entitled “Four-Year Review of Actions Taken in the Section 301 Investigation: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” and consider potential additional tariff modifications as needed under section 2411 of title 19, United States Code — particularly with respect to industrial supply chains and circumvention through third countries, including an updated estimate of the costs imposed by any unfair trade practices identified in such review — and he shall recommend such actions as are necessary to remediate any issues identified in connection with this process.

(d) The Secretary of Commerce and the United States Trade Representative shall assess legislative proposals regarding Permanent Normal Trade Relations with the PRC and make recommendations regarding any proposed changes to such legislative proposals.”

I was hoping that he would immediately issue an Executive Order to implement the 10 and 20 percent blanket tariff on all U.S. goods imports and at least a 60 percent tariff on all Chinese goods. It’s also important to expand Section 232 tariffs to other key industries besides steel and aluminum.

In a press release of January 24, 2025, “The Coalition for a Prosperous America (CPA) has formally called on President Trump to take immediate action to address Mexico’s ongoing violations of its commitments under the 2019 Joint Steel and Aluminum Agreement. In a letter delivered to the White House today, CPA urged the reinstatement of Section 232 tariffs on Mexico and outlined a series of measures to strengthen the U.S. steel and aluminum industries, which are being severely undermined by surging imports from Mexico and other nations.”

Another very important Executive Order UNLEASHING AMERICAN ENERGY EXECUTIVE ORDER, signed January 20, 2025, addresses my recommendation to provide access to affordable energy. Key provisions are:

“Sec. 2. Policy. It is the policy of the United States:

(a) to encourage energy exploration and production on Federal lands and waters, including on the Outer Continental Shelf, in order to meet the needs of our citizens and solidify the United States as a global energy leader long into the future;

(b) to establish our position as the leading producer and processor of non-fuel minerals, including rare earth minerals, which will create jobs and prosperity at home, strengthen supply chains for the United States and its allies, and reduce the global influence of malign and adversarial states;

(c) to protect the United States’s economic and national security and military preparedness by ensuring that an abundant supply of reliable energy is readily accessible in every State and territory of the Nation;”

I was delighted to see that he signed this Executive Order that would allow us to dramatically increase energy production” to reduce energy costs as it will be a great benefit to American manufacturers.

Another important Executive Order was REMOVING BARRIERS TO AMERICAN LEADERSHIP IN ARTIFICIAL INTELLIGENCE on January 23, 2025

Section 1. Purpose. The United States has long been at the forefront of artificial intelligence (AI) innovation, driven by the strength of our free markets, world-class research institutions, and entrepreneurial spirit. To maintain this leadership, we must develop AI systems that are free from ideological bias or engineered social agendas. With the right Government policies, we can solidify our position as the global leader in AI and secure a brighter future for all Americans.

This order revokes certain existing AI policies and directives that act as barriers to American AI innovation, clearing a path for the United States to act decisively to retain global leadership in artificial intelligence.

Sec. 4. Developing an Artificial Intelligence Action Plan. (a) Within 180 days of this order, the Assistant to the President for Science and Technology (APST), the Special Advisor for AI and Crypto, and the Assistant to the President for National Security Affairs (APNSA), in coordination with the Assistant to the President for Economic Policy, the Assistant to the President for Domestic Policy, the Director of the Office of Management and Budget (OMB Director), and the heads of such executive departments and agencies (agencies) as the APST and APNSA deem relevant, shall develop and submit to the President an action plan to achieve the policy set forth in section 2 of this order.

Artificial Intelligence (AI) is very important to helping American manufacturers implement the Industry 4.0 technologies of automation, robotics, supply chain management, production planning, forecasting and creating digital twins. Utilization of these technologies helps American manufacturers be more competitive in the global marketplace.

The White House website also quoted the initial reactions of key industrial organizations to President Trump’s Executive Orders as follows:

The Steel Manufacturers Association: “President Trump has repeatedly demonstrated his strong support for American steel workers. He reiterated that support on day one by directing his agencies to investigate unfair trade and its impact on domestic manufacturing.”

American Fuel & Petrochemical Manufacturers President and CEO Chet Thompson: “President Trump promised to end gas car bans and vehicle mandates on Day 1 of his new administration, and we are pleased to see that work already underway. Thank you, President Trump.”

American Petroleum Institute President and CEO Mike Sommers: “Americans sent a clear message at the ballot box, and President Trump is answering the call on Day 1. U.S. energy dominance will drive our nation’s economic and security agenda. This is a new day for American energy, and we applaud President Trump for moving swiftly to chart a new path where U.S. oil and natural gas are embraced, not restricted.”

Job Creators Network CEO Alfredo Ortiz: “Trump’s two-fold approach of boosting oil and gas production and repealing the Biden administration’s green energy mandates will make American energy cheaper, reliable and more efficient.”

In his Remarks delivered via teleconference to the World Economic Forum on January 23, 2025, President Trump stated some of the other things he has done that will benefit American manufacturing:

“I terminated the ridiculous and incredibly wasteful Green New Deal — I call it the “Green New Scam”; withdrew from the one-sided Paris Climate Accord; and ended the insane and costly electric vehicle mandate. We’re going to let people buy the car they want to buy.

     I declared a …national energy emergency to unlock the liquid gold under our feet and pave the way for rapid approvals of new energy infrastructure. The United States has the largest amount of oil and gas of any country on Earth, and we’re going to use it.

     Not only will this reduce the cost of virtually all goods and services, it will make the United States a manufacturing superpower and the world capital of artificial intelligence and crypto.

     My administration has also begun the largest deregulation campaign in history, far exceeding even the record-setting efforts of my last term.

     In total, the Biden administration imposed $50,000 in additional regulatory costs on the average American household over the last four years. I have promised to eliminate 10 old regulations for every new regulation, which will soon put many thousands of dollars back in the pockets of American families.”

President Trump is off to a good start towards achieving his goal to Make American Great Again by rebuilding American manufacturing to strengthen our country’s economic resilience and end dependence on foreign nations. These actions will protect our national security and create a more prosperous future for our country now and for our children and grandchildren.

Tags: American manufacturing, trade policy
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What Legislation Should Congress Pass to Help Rebuild American Manufacturing?

January 14th, 2025

Now that the 119^th Congress began less than two weeks ago, the priorities for Republican who have a slight majority in Congress on passing legislation that fulfills their campaign promise to support President’s Trump goal to Make America Great Again. To achieve this goal, Congress must pass legislation that helps rebuild American manufacturing.

As a reminder of why this is critical, manufacturing is the foundation of the middle class because manufacturing jobs pay higher wages than most service and retail jobs, enabling more American to move into the middle class during the 1900s. Manufacturing employment was at an all-time peak of 19.6 million in June 1979, representing 22 percent of the labor force. The loss of millions of manufacturing jobs in this century has resulted in a shrinking middle class. The loss of these jobs also means a loss of tax revenue, increasing our national debt.

The domestic manufacture of innovative new technologies is what enabled the United States to become the leader of the free world. A secure domestic manufacturing supply chain is critical to maintaining our national sovereignty to remain a free country. We need to rebuild American manufacturing to create prosperity for our children and grandchildren.

Here are my suggestions for legislation that should be passed by Congress in order of importance:

Impose a Market Access Charge (MAC) as proposed by Dr. John R Hansen, (PhD economist and Economic Advisor, The World Bank (retd.) “forcing foreigners to pay a market access charge (MAC) if they want to dump their speculative money into America’s financial markets when US trade deficits show that the global demand for dollars and dollar-based assets like stocks and bonds is already excessive. In addition to encouraging the dollar to move to a more competitive level, thus boosting economic growth and family incomes, the MAC could also generate hundreds of billion dollars of new government revenue per year.

The MAC would start low, rise gradually until foreign demand for dollars was consistent with balanced trade, and thereafter be adjusted periodically to maintain balanced trade. The MAC charge, which is fully legal under US and international law… Even a very low rate of say 1.5 percent, the MAC, which would be paid entirely by foreign speculators, not Americans, could generate over $1 trillion dollars of new revenue per year. This could gradually be used to eliminate the U.S. deficit…and to start paying down America’s total internal and external debts.

John emailed me this comment: “We should regard the MAC as a tariff on the import of foreign money — just as regular tariffs are a tax on the import of foreign goods. A MAC tariff would create millions of new, well-paying jobs and would give the U.S. Government billons of additional revenues, all paid out of the pockets of foreigners, that could be used to:

increase the quality and adequacy of government services for all Americans.
reduce the burden of taxes paid by Americans.

Note that, unlike traditional tariffs on imports which increase U.S. prices, especially in the short term, the MAC would be paid entirely by foreigners. Furthermore, unlike tariffs that only restrict imports (by making them more expensive for Americans), the MAC would also stimulate exports and American jobs by making made-in-America products more competitive in foreign markets.

The American jobs that the MAC would create would emerge not only in crowded urban areas, but also in the poverty-stricken regions of America where, as President Trump mentioned in his 2017 inaugural address, “rusted-out factories are scattered like tombstones across the landscape of our nation,” especially affecting the poor workers who lost their jobs due to the China Shock.

Likewise, by making grown-in-America food and other agricultural products more competitive with competing foreign goods, the MAC would help reverse the sharp deterioration of family incomes on American farms and ranches.

Finally, passing legislation for the MAC would also help America reduce its mountain of government debt — debt that threatens the stability of our country today and the quality of life for our children tomorrow.”

Pass a Patent Reform Bill to restore inventors’ rights and end abuses by the Patent Trial and Appeal Board (PTAB).

The largest inventors’ organization, US Inventors, supported the passage of the following bill in the last session of Congress: HR 8134, the Restoring America’s Leadership in Innovation Act (RALIA), introduced by Rep. Thomas Massie (R-KY) and Rep. Marcy Kaptur (D-OH).

RALIA sought to revitalize patent protection by restoring injunctive relief, eliminating confusing judicially created eligibility tests, and abolishing the Patent Trial and Appeal Board (PTAB). RALIA would have reversed the effects of several Supreme Court decisions and of the America Invents Act, largely repairing most of the erosion of US patent rights accumulated over the last several decades. US Inventors urges Congress to pass the reintroduction of this bill in this session of Congress.

It would be nice for the USPTO to get refocused on its mission to ensure that the intellectual property system contributes to a strong global economy, encourages investment in innovation, and fosters an entrepreneurial spirit.

Revoke China’s Most Favored Nation Status (aka Permanent Normal Trade Relations (PNTR)

After President Clinton granted China Most Favored Nation Status annually from 1995 on, the U.S.Senate voted to give China permanent most-favored-nation status on September 19, 2000, and on October 10th, 2000, President Clinton signed into law the U.S.-China Relations Act of 2000. This paved the way for China’s accession to the World Trade Organization. This started the trend of American manufacturers moving manufacturing to Chinese vendors and the huge influx of imported good from China flooding the U.S. when tariffs were drastically reduced.

Our trade deficit with China increased every year from $83.8 Billion in the year 2000 to $279.1 Billion in 2023 (projected to be about the same for 2024). This was down from a peak trade deficit with China in 2018 of $418.2 Billion.

In my article, “We must Revoke China’s Most Favored Nation Status, I wrote that during the 118th Congress, “several bills have been introduced to revoke or modify China’s Most Favored Nation (MFN) status, also known as Permanent Normal Trade Relations (PNTR)” but none of the bills were passed out of Committee to be voted on by the House or Senate.

Passing such a bill should be a major priority for the 119^th Congress as soon as possible. Without PNTR status, all products from China would by default be subject to higher tariffs. This would reduce off-shoring by discouraging American investors and corporations from doing business in China. It would increase reshoring and diminish demand for Chinese goods, bolstering the sales of American manufactured products.

Reduce the Allowed Value of De Minimis imports

De Minimis imports was codified in Section 321 of the Tariff Act of 1930 as an administrative exemption for imports under $1. However, the Trade Facilitation and Trade Enforcement Act of 2015, signed by President Barack Obama Feb. 24, 2016, “ raised the value of a shipment of merchandise imported by one person on one day that generally may be imported free of duties and taxes from $200 to $800.

This allows foreign vendors, such as Temu, Shein, and Amazon vendors, to ship directly into the United States. When a package receives de minimis treatment, it arrives without the need of a customs broker or bond, without paying any tariffs or taxes, and without meaningful possibility of regulatory oversight.

The Coalition for a Prosperous America states: “U.S. companies and workers are subjected to a new level of job-destroying competition. Illicit drugs, such as fentanyl, and counterfeit goods are shipped directly to US consumers while evading detection. The predictable result is a major calamity putting U.S. producers and traditional retailers out of business and destroying jobs.” CPA urges “Congress to lower the de minimis threshold to $9 among other reforms.”

Reauthorize a Reformed Tax Cuts and Jobs Act (TCJA)

Major provisions of the Tax Cuts and Jobs Act of 2017 will expire by the end of 2025, so American families and business could experience dramatic increases in taxes in 2026.

Since manufacturers require affordable taxes to succeed and grow, reform and reauthorization of TCJA is imperative.

The Tax Foundation recommends that Congress “prioritize provisions that have the largest “bang for the buck,” or the most economic growth per dollar of revenue loss. These include immediate cost recovery for investments in the types of machinery and equipment upon which millions of small and large businesses depend, as well as immediate write-offs for investments in research and development. These two policy changes support a growing economy like no other tax policies proposed since the corporate tax rate was reduced from 35 percent to 21 percent.”

While the reduction in corporate taxes was a big benefit to large corporations, it was actually a tax increase from 15% to 21% for small business and small manufacturers. The fabrication companies I represent as a sales rep all saw this increase in their corporate taxes because they generated revenues under $10 million a year.

President Trumps’s proposal for a 15% corporate tax rate should be seriously considered. Read the Cato Institute’s “The Case for Trump’s 15 Percent Corporate Tax Rate” here.

Pass Legislation to Address China’s Exploitation of U.S. Capital Markets, Economic Incentives, and Trade Policy

Several bills to address the problem of China’s exploitation of U.S. capital markets were introduced in the 118^th Congress, but none of them were passed out of committee to be voted on by the House or Senate. For a full list of this legislative package, go to this link of the website of the Coalition for a Prosperous America (CPA) as there is insufficient space in this article to describe all of these bills. All of these bills will have to be introduced in the 119^th Congress. As a long-time member of CPA, I join them in urging Congress to pass a legislative package that will “prohibit U.S. capital, economic incentives, and trade preferences from benefitting China and other adversarial nations.”

Passage of the legislation mentioned in this article would help stop the destruction of American industry and innovation, the loss of high-paying manufacturing jobs, and the collapse of communities. It would d be a big help in rebuilding American manufacturing’s capacity and eliminate dependence on China and other adversarial nations. It would especially help rebuild manufacturing capacity in industries that are critical to U.S. economic and national security. It would help to create prosperity for our children and grandchildren and ensure that they will continue to live in a free country.

Tags: American manufacturing, Intellectual Property, trade policy
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Rebuilding American Manufacturing Through Executive Orders

December 17th, 2024

President Trump has the authority to take significant action to rebuild American manufacturing through executive orders. By utilizing his executive powers, President Trump can implement various strategies to support and enhance the manufacturing sector in the United States. In my article, “What do Manufacturers Need to Succeed and Grow?, I highlighted several policies that would help rebuild American manufacturing. This article points out some actions that President Trump could take to rebuild American manufacturing through executive orders:

Protect Manufacturers from Unfair Trade Practices: In his first term, President Trump used executive orders to implement tariffs on imports from certain countries. Trump has said he would fulfill a campaign promise to levy tariffs on imports from America’s biggest trading partners immediately.

During his presidential campaign, Trump promised to impose between a 10 and 20 percent blanket tariff on all $3 trillion worth of U.S. goods imports and at least a 60 percent tariff on all Chinese goods.

In a Truth Social post on November 25, 2014, Trump promised to implement 25 percent tariffs on Day One on all goods from Canada and Mexico until they clamp down on drugs and migrants crossing the border. He also promises an additional 10 percent tariff on all Chinese goods unless China implements the death penalty for all drug dealers linked to fentanyl.

By continuing to use tariffs strategically, President Trump could protect American industries from unfair competition and create a level playing field for domestic manufacturers.

Reduce Regulatory Burdens: President Trump could issue executive orders aimed at streamlining regulations that hinder the growth of American manufacturing. By cutting red tape and eliminating unnecessary regulatory burdens, businesses would be able to operate more efficiently and invest in expanding their manufacturing capabilities.

President Trump could end the Biden administration’s “electric vehicle mandate.” Biden’s EPA implemented limits on climate pollution from passenger cars, pushing for electric vehicles to make up two-thirds of new car sales by 2032.

Provide Access to Affordable Energy: President Trump could keep a campaign promise he made during a speech in Michigan to “declare a national emergency to allow us to dramatically increase energy production” in an effort to reduce energy costs. On Day One, he could issue an Executive Order to “approve new drilling, new pipelines, new refineries, new power plants, new reactors and slash the red tape.” His oft-stated campaign vow to “drill, baby, drill” and “frack, frack, frack” would open up all American sites for oil drilling and fracking.

In a campaign speech on May 11, 2024, Trump swore he would end offshore wind projects on Day One, “They ruin the environment, they kill the birds, they kill the whales.”

Promote Buy American Policies: President Trump could issue an executive order prioritizing the use of American-made products in federal procurement and infrastructure projects. By mandating the use of domestically produced goods, the demand for American manufacturing would increase, leading to the growth of the sector.

In addition to these important actions, President Trump could use executive orders to do the following:

Invest in Workforce Development: Establish programs that promote workforce development in the manufacturing industry. By providing funding for training programs and apprenticeships, the administration could ensure that the American workforce has the skills needed to drive innovation and growth in manufacturing.

Support Research and Development: Increase funding for research and development in key manufacturing sectors, such as advanced manufacturing, robotics, and clean energy. By investing in innovation, the administration could help American manufacturers stay competitive in the global market.

Establish Manufacturing Task Forces: President Trump could create executive orders to establish task forces or councils dedicated to addressing the challenges facing the American manufacturing sector. These task forces could bring together industry leaders, policymakers, and experts to develop strategies and initiatives to support the growth of manufacturing in the United States.

By taking decisive action through executive orders, President Trump has the opportunity to revitalize American manufacturing and strengthen the country’s economic resilience. Through a combination of policies that promote domestic production, support workforce development, and encourage innovation, the administration can help rebuild American manufacturing and create a more prosperous future for the industry.

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Reclaiming American Manufacturing: Take Back the Middle Class from Globalism

December 4th, 2024

Several years ago, I met Bill Waddell at a Lean Frontiers conference where we were both guest speakers. We kept in touch via LinkedIn and he recently sent me a message about his new book, titled Reclaiming American Manufacturing. His topic was so closely related to the topic of my last book, Rebuild Manufacturing – the key to American Prosperity that I was anxious to read it to see how he proposed to accomplish our common goal.

After reading his book, we had a short conversation via Zoom about how U.S. manufacturing has been devastated in the past 30 years, along with the devastation of the middle class. His book explains how we got here, and what it will take to set things right again. He draws from his experiences in a long career at the management level of several manufacturers, both domestic and foreign, as well as his experience as a manufacturing transformation consultant in the U.S. and Germany. He started his career in manufacturing in 1978 when he went to “work for a window and cabinet hardware manufacturer, Amerock, in Rockford, IL – which had recently been acquired by Anchor Hocking.” He said he loves everything about manufacturing, and I told him, “I do, too,” and I started as an engineering secretary at age 18 for a company that made electronic and electrical components and assemblies.

I asked why he wrote the book at this time in his life, and he said, “I had some health problems in the last year so I had the time to do it. For the first time, I wasn’t spending all my time in airports. Also, rebuilding manufacturing is what both candidates were saying. I thought it would be timely to put my two cents in from the standpoint of someone who was a manufacturing guy. I don’t know a lot about philosophy or economics, but I thought I could contribute to the discussion from the standpoint of someone who knows a lot about how manufacturing really works and how the decisions are really made about why we are going to build a plant in China rather than the U.S. and why we were not going to move it back. I thought I had a unique perspective. It hurts me personally to remember the glory days of manufacturing. I live in the Midwest, and every town around me has empty factories. I know what it could be and what it used to be. I think it is an important issue economically and not only hurts me, but my children and grandchildren. If we are not going to be a manufacturing nation, they will not have the quality of life that I have had.

We shared our experiences with the effects of NAFTA. Because I read, write, and speak Spanish, I used to sell to the maquiladoras in Baja California prior to NAFTA, but it became too complex and time consuming to continue after NAFTA went fully in effect. He said he learned the implications of NAFTA when he worked for McCulloch Corporation’s chain saw factory in Tucson, AZ that had a plant in Sonora, Mexico. He was “troubled by the openly abusive labor practices” he encountered and “by the poverty of the employees.”

He said that when he worked as a consultant at plants owned by American companies in China, “working conditions were often wretched, and worker safety was often non-existent.” I said that while I had never been to China, I had described the horrible working conditions in a chapter titled, “What Are the Effects of Industrialization on China and India,” in my first book, Saving U.S. Manufacturing, based on the research I had done.

Bill said that he was “very well acquainted with the people in manufacturing, from American middle managers to Chinese machinists to German engineers to Mexican electrical harness assemblers.”

In his chapter, “Hollowing Out the Middle Class,” he points out that “According to the U.S. Census Bureau, manufacturing jobs pay an average of a little over $61,000 a year. If we look at a weighted average of the Health, Education, Hospitality and Transportation jobs that replaced them, it is only $43,000 and change. For all practical purposes, 11 million people took an $18,000 a year pay cut – 30% – and went from the solid middle class to the high end of the lower class.”

I agreed with what he wrote in that same chapter about the “big financial winners in the NAFTA and Ch8ina trade deals have been the big multi-national manufacturers and the banks supporting them [whereas] 95% of American manufacturers are small or medium sized, most with one location, and privately owned – usually a single owner or a family business.”

I resonated with the points he made about NAFTA and the World Trade Organization in his chapter titled “Bill Clinton: Globalist in Chief.” He mentions that Clinton had his work cut out to get NAFTA passed by Congress. While the Democrats controlled both the House and Senate, more Republicans than Democrats supported it. He “garnered enough Democrat support to get it passed” with “a pledge to enter into side agreements with Mexico to assure their protection of the environment and human rights to get it done. They continued to promise that NAFTA” would create as many as a quarter of a million American manufacturing jobs.”

Bill wrote that this proved to be a lie because “By the time Clinton left office in 2001, 6 million American manufacturing jobs were gone, and the US trade balance was in a steep dive.”

He then describes how President Clinton “set about putting US policy and leadership in line with the World Trade Organization – WTO – in 1995” and then in the year 2000, “Clinton attained membership for China in the WTO (essentially giving them what used to be known as ‘most favored nation’ status).”

After defining globalism vs. nationalism in his chapter of the same name, he made a very astute observation: “The old Democrat Part no longer exists. It would be more accurately called the ‘Globalist Party. And the old Republican Party no longer exists. It would be more accurately called the ‘Nationalist Party.’” He states that the globalist ideology that “people, goods, and information ought to be able to cross national borders unfettered” to create a new economic order in the world explains everything from free trade agreements to climate change.

He then dissects David Ricardo’s Theory of comparative Advantage in his chapter titled “Giving Ivy League Degrees to the Illiterate.” He asserts that “they all seem to have missed Recardo’s fundamental principle and explains that “the Theory of Comparative Advantage is not about cheap labor or cheap production – it is about productivity, as it must be.” He concludes, “If global trade is based on sending work to the places where workers are the worse paid, the collapse of the economies in the developed national is inevitable.”

In his chapter “The Economists New Clothes,” he writes, “The intellect behind globalism comes from a fairly tightknit group. The Ivy League, Stanford, MIT, Oxford and a handful of other ‘elite’ schools make up the core of it.” He writes, “The problem isn’t a lack of intellect. It is lack of any real-world exposure or experience.” As a result, “the elite schools have not been in touch with or contributed anything meaningful to manufacturing since the 1980s…” He asserts, “The very notion that the Industrial Revolution has ended, or ever will end, is absurd…Manufacturing in this day and age is a very high-tech endeavor not just in a few select highly automated factories – all of it.” I told him that this is what I have been asserting in every article I’ve written in the past 20 years.

In his chapter, “It’s a Matter of Principle as Much as Economics, he describes the oppressive working conditions, human rights abuses, and air and water pollution of the low-cost labor countries like China, Vietnam, Bangladesh, and India. He comments, “No one should be surprised that the same countries that have a wretched track record of abusing human rights have atrocious air and water quality, and have their people living in dire poverty, struggling just to eat.” He concludes that “Every transaction requires a willing seller and a willing buyer. In globalizing manufacturing, unaccountable leaders were the willing sellers of their countries’ human and natural resources to the willing buyers at the multi-national companies.”

His last two chapters provide his solutions for reclaiming American manufacturing, two of which are so unique that I couldn’t do justice to summarizing his explanation of them. I want to make learning about them an incentive to buy and read his whole book. It will be well worth you time and money. You can buy his book from Amazon.

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What do Manufacturers Need to Succeed and Grow?

November 12th, 2024

Now that we have re-elected President Trump for a second term to work on achieving his goal of Making America Great Again, it’s time to focus on how to rebuild America’s manufacturing industry because we can’t be great again without a strong domestic manufacturing industry.

My book, Rebuild Manufacturing – the Key to American Prosperity, provides detailed ways to rebuild American manufacturing based on my over 40 years in the manufacturing industry. As a start on the path to rebuilding American manufacturing, here are a few suggestions on what manufacturers need to succeed and grow:

Restoration of Patent Rights

Manufacturers mainly fall into one of three groups:

Original Equipment Manufacturers – selling a finished product such as a motor vehicle, ship, airplane, satellite, etc.

Suppliers – manufacturing a component, subsystem, or assembly for a finished product, such as a motor, power supply, semiconductor, etc.

Fabricators – perform a manufacturing process to make a particular part or assembly for a finished product such as an enclosure, bracket, panel, gasket, seal, etc.

During my career, I have worked for OEMs and suppliers, but currently represent fabricators as a sales rep. Each of these manufacturers requires a unique selling point (USP) or unique value proposition (UVP) that is part of a company’s marketing strategy to inform customers about how their brand, product, or service is superior to its competitors.

One or more patents are often an important component of the USP/UVP for products, components, and subsystems incorporating new technologies. While fabricators rarely have patents, many have trade secrets covering their manufacturing processes.

My previous blog articles have shown how patent rights have been eroded by the America Invents Act (AIA) of 2011 and why patent rights must be restored to help technology-based companies have the strong patent protection they need to be successful. The threat of having their patent invalidated by the Patent Review and Trial Board (PTAB) established by the AIA is discouraging inventors from applying for a patent, and they are going to other countries to get their patents. In addition, the lack of secure patent rights is also hindering the willingness of angel investors to invest in new technologies for startup companies. We must also continue to protect trade secrets because China uses espionage to steal both patented technologies and trade secrets.

Protection from Unfair Trade Practices

In an increasingly interconnected global economy, American manufacturers face significant challenges, particularly from China’s trade practices. As concerns over unfair trade continue to rise, it’s crucial to understand the implications these practices have on U.S. businesses and the broader economy. Common examples of mercantilist trade practices by China are: currency manipulation, rampant intellectual property theft, product dumping (selling products at below-market prices), and government subsidies for Chinese companies. These unfair trade practices have created an uneven playing field. According to the U.S. Trade Representative, these practices have contributed to a substantial trade deficit with China, severely impacting American manufacturing sectors.

Several industries have borne the brunt of these practices. For instance, the U.S. steel industry has faced aggressive pricing from Chinese manufacturers, which has led to factory closures and job losses across the country. In the textile sector, similar patterns have emerged, where Chinese imports flood the market at prices that domestic producers cannot match, resulting in significant downturns in American jobs.

The U.S. government has implemented various measures to counteract these unfair practices, such as tariffs and trade negotiations to foster fair competition. Addressing unfair trade practices is essential for the survival and growth of American manufacturing. We need fewer imports and more domestic production. Now is the time to take a stand and implement strategies that ensure a fair playing field for American manufacturers. The following strategies should be considered:

Establish Tariffs on all Chinese Products – read my previous article on “Why we Need Tariffs on Chinese Products”
Strengthening Enforcement of Trade Laws: Increasing the capacity of trade enforcement agencies to investigate and combat unfair practices can deter such actions.
Promoting Domestic Production: Incentives for manufacturers to produce locally can help rebuild industries affected by unfair competition.

Access to Affordable Energy

In the modern manufacturing landscape, access to affordable energy is not just a necessity; it is a fundamental pillar of success. As industries strive to remain competitive in a global market, the cost of energy can significantly impact operational efficiency, profitability, and innovation. Energy costs represent a substantial portion of manufacturing expenses. From powering machinery to heating facilities, energy consumption is intrinsic to production processes. When energy prices rise, manufacturers face difficult choices: pass costs onto consumers, reduce labor, or cut back on investment in technology and innovation. These decisions can hinder growth and competitiveness.

Lower energy costs can lead to reduced overall production expenses, enabling companies to offer more competitive pricing and improve profit margins. For example, industries such as steel and chemicals, which are energy-intensive, benefit tremendously from stable, low-cost energy sources. This advantage can be a deciding factor for companies considering where to locate new facilities or expand existing operations.

Affordable energy is also crucial for fostering innovation. Manufacturers need access to reliable energy sources to invest in new technologies and processes that enhance efficiency and reduce waste. By keeping energy costs low, regions can attract and retain manufacturing businesses, leading to job creation and economic development.

Access to affordable energy is vital for the health and growth of the manufacturing industry. It influences operational efficiency, competitive advantage, innovation, and job creation. Policymakers, industry leaders, and communities must work together to foster an environment where affordable energy is a reality for all manufacturers.

Reasonable Corporate Tax Rates

Tax policies that govern businesses can significantly influence manufacturers’ operational success and growth potential. Reasonable corporate tax rates are essential not only for maintaining profitability but also for fostering innovation and job creation. Manufacturers often operate on thin margins, making it crucial to manage costs effectively. Lower tax liabilities provide manufacturers with the capital needed to expand operations, upgrade equipment, and develop new products.

High corporate tax rates can place an additional financial burden on these businesses, reducing their ability to reinvest profits into operations, technology, and workforce development. When manufacturers are forced to allocate a significant portion of their earnings to taxes, they may struggle to remain competitive, especially against international rivals with lower tax obligations. In a global marketplace, manufacturers often compete not only with domestic companies but also with foreign firms that may benefit from more favorable tax regimes.

By implementing reasonable corporate tax rates, governments can level the playing field, allowing American manufacturers to compete effectively against their international counterparts. This is particularly important in industries where price competitiveness is key to success.

Reasonable corporate tax rates can stimulate investment in the manufacturing sector. For example, when businesses have more disposable income, they are more likely to invest in research and development, which is essential for driving innovation and maintaining a competitive edge in the market.

To support the manufacturing sector, policymakers must consider tax reforms that prioritize reasonable corporate tax rates. This can include reducing rates, closing loopholes that disproportionately benefit large corporations, and creating incentives for small and medium-sized manufacturers. A balanced approach to taxation can foster a more equitable environment that encourages growth and investment across the sector.

Reasonable corporate tax rates are crucial for the health and vitality of the manufacturing industry. They enable manufacturers to invest in growth, create jobs, and compete effectively on a global scale. As policymakers consider tax reforms, it is essential to recognize the significant role that reasonable taxation plays in supporting American manufacturers and, by extension, the broader economy. A commitment to fair corporate tax rates will help ensure a robust and thriving manufacturing sector for years to come.

Regulatory Relief in Manufacturing

The burden of overregulation can stifle the potential of manufacturers, hindering productivity and competitiveness. Overregulation refers to the imposition of excessive or unnecessarily complex rules and standards that can burden businesses. For manufacturers, compliance with these regulations often requires significant time, resources, and financial investment. This can divert attention away from core operations, stifling creativity and limiting growth opportunities.

Excessive regulations can make it difficult for U.S. manufacturers to keep pace with competitors who operate in more business-friendly environments. Lowering the regulatory burden can enhance competitiveness, allowing manufacturers to focus on innovation and efficiency.

The costs associated with compliance can be substantial. From hiring specialized staff to implementing new technologies for regulatory adherence, manufacturers often find their budgets stretched thin. This financial strain can lead to higher product prices, which may result in lost sales and reduced market share. A more streamlined regulatory environment can foster a culture of innovation, allowing companies to focus on creating cutting-edge solutions that meet market demands.

While regulations are essential for ensuring safety, environmental protection, and fair labor practices, it is crucial to strike a balance. Policymakers should engage with industry leaders to understand the unique challenges manufacturers face and develop regulations that protect public interests without imposing undue burdens. Streamlining regulatory processes, simplifying compliance requirements, and providing clarity in regulations can significantly benefit manufacturers. A collaborative approach to regulation that prioritizes both public welfare and the needs of manufacturers will pave the way for a robust and resilient manufacturing sector.

Manufacturing is not only vital for the U.S. economy but also plays a crucial role in driving innovation, job creation, and economic prosperity. Manufacturing provides millions of Americans with jobs, both directly in manufacturing plants and indirectly through supporting industries such as logistics, finance, and technology. Manufacturing has a vast supply chain that includes raw materials, components, and finished goods, supporting a wide range of businesses and services across the country. The manufacturing sector is a hub of innovation and research and development (R&D), driving technological advancements and creating new products and processes that can benefit various industries.

Manufacturing exports contribute significantly to the U.S. trade balance, helping to generate revenue and create a favorable balance of trade. The manufacturing sector often leads to economic growth by attracting investment, generating tax revenue, and increasing productivity. Most importantly, a robust manufacturing sector is essential for national security, as it ensures domestic production of critical goods and reduces reliance on foreign sources during times of crisis.

Tags: American manufacturing, patent reform, regulatioms, taxes, trade policy
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Why We Need Tariffs on Chinese Imports

October 22nd, 2024

On Friday, October 18^th, Sean Hannity interviewed Kevin O’Leary, one of the investors on Shark Tank, regarding his opinion of tariffs. O’Leary has been such a strong proponent of free trade in the past. In fact, even though I enjoy hearing about new inventions and products presented by the inventors and entrepreneurs on the program, I stopped watching the program because I was disgusted by how often they recommended that the product be manufactured in China.

Therefore, I was astonished when Mr. O’Leary expressed his support for the tariffs President Trump has proposed, saying that tariffs are a good negotiating tool. I didn’t have the ability to record his interview on Hannity’s show, so could only take notes. Thus, I can only paraphrase what he said instead of quoting him word for word. Mr. O’Leary said that right now we don’t have a level playing field for trade with China. so, tariffs would be a way to level the playing field. He shared that one of the companies in which he had invested went to China to manufacture their product. They spent about $400,000 on tooling, and everything was fine until the product volume got up to about five million. Then, a knock-off of the product made with their tooling appeared on the market under another company’s name and sold for 2/3 of their price.

He said that nearly every company is wholly or partially owned by the Chinese government and they subsidize some of the costs of these companies to capture foreign markets. He again said that tariffs would be a good way to fight against China’s unfair trade practices and level the playing field.

It was gratifying to see that someone of his stature in the industry has finally experienced what we in the marketing and sales trenches for American-made products and manufacturing services have been experiencing for over 20 years. I am just surprised that it took so long for him to come to this conclusion.

It only took a couple of years after China was granted Most Favored Nation status in the year 2000 to start seeing an unprecedented pruning of companies in the San Diego region because of the unlevel playing field we experienced in competing against Chinese companies. Buyers that weren’t willing to use vendors in the Midwest or East Coast were willing to go to China on the other side of the world to save money. Sourcing in China became the “in thing” to do.

It became more difficult for the American manufacturers we represented to compete against China, especially for the higher volume work to make plastic injection molded parts or die cast parts for commercial markets. Our success became more and more limited to Original Equipment manufacturers making products for the military and defense industries that mandated “Buy America” as well as the lower volume work for niche commercial markets. Sometimes, the quoted Chinese price was equal or a little more than what our American manufacturer had to pay for just the material to make the part.

I started to keep a record of the companies that moved out of state or had gone out of business starting in January 2001 from my own database of customers and prospective customers. By 2003, I had documented 85 companies that had gone out of business, moved out of California, or sourced their manufacturing out of the country, mostly in China. I contacted the Chambers of Commerce of the other 17 cities in San Diego County and found out that none of them were tracking this data.

However, the loss of companies didn’t make the headlines in San Diego news because they were nearly all smaller companies with fewer than 50 employees.

In the spring of 2003, several legislators with whom I had campaigned for state assembly in the year 2000 asked me to provide them with the list of companies that were moving out of California. I turned the list into a report in an effort to make these legislators and other key policy makers aware of the seriousness of what was happening. I emailed this first report in March 2003 to legislators, local elected officials, industry leaders, and the local news media. The report got attention from a local radio talk show host, Roger Hedgecock, who immediately invited me to be a guest on his show. I prepared two more reports later that year and was invited on his show after each report was released.

I electronically published (e published) two to three reports a year from 2003 – 2010 and became a regular guest on the Roger Hedgecock show and a featured guest on several other regional radio shows. I also started writing opinion blog articles once or twice a month that were published by a local online news line and emailed to my own Constant Contact database.

My list had grown to nearly 200 companies by 2007, and I realized that this phenomenon was not just happening in San Diego or California, but was affecting the manufacturing industry in all of the United States. It became my passion to do what I could to save manufacturing in America because I firmly believe that if we don’t save manufacturing, we will lose our middle class as manufacturing jobs are the foundation of the middle class. That’s when I started to write my book, Can American Manufactur8ing be Saved? Why we should and how we can, which was published in 2009.

In addition to chapters that covered a brief history of manufacturing for 1790 to the present day and the role unions played in shaping American’s industrialization, I covered what was happening to manufacturing, what had been the effects of outsourcing offshore, why we should save American manufacturing, and my opinion of how we could save American manufacturing.

I wrote that I had learned that tariffs on foreign imports was one of the main sources of revenue for the Federal government until the initiation of the income tax in 1913. For more than the first 150 years of its history, the United States was a protectionist country in order to protect and grow its fledgling manufacturing, allowing the United States to become a major industrial power by the early 20^th Century.

After World War II, the U.S. switched from protectionism to free trade in order to rebuild the economies of Europe and Japan through the Marshall Plan and bind the economies of the non-Communist world to the United States for geopolitical reasons.

To accomplish these objectives, the General Agreement on Tariffs and Trade (GATT) was negotiated during the UN Conference on Trade and Employment and signed by 23 countries at Geneva in 1947. GATT became the most effective instrument in the massive expansion of world trade in the second half of the 20th century.

GATT’s most important principle was trade without discrimination, in which member nations opened their markets equally to one another. A major benefit for GATT members was the reduction or elimination of tariffs. Once a country and one of its trading partners agreed to reduce a tariff, that tariff cut was automatically extended to all GATT members. GATT also established uniform customs regulations and sought to eliminate import quotas. By 1995, when the World Trade Organization replaced GATT, 125 nations had signed its agreements, governing 90 percent of world trade.

Our elected officials should have realized that they needed to change the trade policy when we started to lose market share to Japanese products, especially cars and consumer electronic products.

As a result of these free trade policies, the United States developed a trade deficit with the majority of its trading partners starting in 1980. Of course, some deficits were small, but they increased over time until they became enormous like our current deficit with China.

According to USA Facts, “Over 50% of U.S. trade in 2023 involved one of five partners: Mexico, Canada, China, Germany, and Japan. In 2023, the US imported $1 trillion more in goods than it exported, marking the sixth straight year of a trade deficit in the trillions (adjusting for inflation) …The highest trade deficits were with China ($279 billion), Mexico ($152 billion), and Vietnam ($105 billion).”

The work of The Reshoring Initiative to educate manufacturers on how to use Total Cost of Ownership Analysis to determine the true cost of sourcing offshore vs. domestically has helped a great deal, and by 2023, the U.S. had recouped over a million of the 5.8 million manufacturing jobs that it lost between the year 2000 – 2010.

In addition, increased interest by consumers in buying “Made in USA” products and more stringent “Buy America” regulations for military and defense procurement has helped save the American manufacturing industry.

It is an acknowledged fact that the tariffs imposed by the Trump Administration on steel and aluminum saved the U.S. steel industry. Thus, it is now my opinion that if we want to significantly reduce our trade deficit with China, we must impose tariffs on all Chinese products imported into our country. There is considerable debate about how high these tariffs should be. I can tell you that for plastic injection molded parts or rubber molded parts, the tariff would need to be 200% to 300% to be competitive on piece pricing with China.

I realize that this high a percentage of tariffs would never be approved, but the tariff percentage needs to be higher than a token 10% if we really want to achieve the goal of reducing our trade deficit significantly.

We can either continue down the path of increasing trade deficits and increasing national debt by allowing products to be imported by countries practicing predatory trade policies. Or, we can forge a new path by developing and implementing a national strategy that includes tariffs to win the international competition for good jobs, sustained economic growth, and strong domestic supply chains.

Tags: American manufacturing, trade policy
Posted in General, Manufacturing, Trade Policy | No Comments »

Inventors Need Your Help to Protect Their Patent Rights

October 8th, 2024

US Inventor was founded in 2015 after the passage of the America Invents Act of 2011 and the establishment of the Patent Trial and Appeal Board (PTAB) to “restore a solid patent system that ensures small businesses and individual inventors can protect their inventions from theft, regardless of the power and influence of large corporations. Every initiative and action undertaken by US Inventor aims to restore and reinforce the integrity of the American patent system.” US Inventor is the only organization representing small inventors, businesses, and startups to enact change that supports these groups, and it has grown to about 87,000 members over the past couple of years. If you haven’t already signed the Inventor’s Rights Resolution, you may sign here.

In the past several weeks, US Inventor has been active in opposing two Senate bills that were scheduled for “mark up” by the Judiciary Committee during one of the three committee meetings scheduled in September. The bills are:

S. 2140: Patent Eligibility Restoration Act of 2023 (PERA)

S.2220 – PREVAIL Act

Both bills were introduced during the current Congress in 2023, and I wrote about these bills in a previous blog article, summarizing the reasons why US Inventor is opposed to each bill. Briefly, US Inventor stated: “PERA must not become law without complete removal of Section 3(b)(1)(B)(i) and (ii) and its support at Section 2(5)(D)(v) and Section 2(5)(E)(i) and (ii).” The full analysis of PERA by US Inventor can be reviewed here.

US Inventor’s position on PREVAIL is that it “could be saved if it had an amendment that “offers inventors the “choice” of not being forced into the unjust PTAB administrative court, but rather being able to choose to face your infringer in a real court with a jury and Due Process.” The full analysis of PREVAIL by US Inventor can be reviewed here.

During the month of September, thousands of USI members called and wrote their Senator expressing their opposition to both bills. US Inventor also arranged Zoom meetings with staff of the Senators who are members of the Judiciary Committee. I participated with other California constituents who are inventors in Zoom meetings with the staff of California Senators Butler and Padilla.

When it was my turn to speak, I said that I was a board member of the San Diego Inventors Forum, which is one of the oldest and largest inventor groups in the country with a database of over 600 inventors, entrepreneurs, and service providers. We have noticed that the threat of having the Patent Review and Trial Board (PTAB) invalidate a patent is discouraging inventors from applying for a patent, and they are going to other countries to get their patents. Even China has a more secure patent system, so inventors are giving their technologies to China when they get a patent there.

It is also causing more inventors to focus on getting licensing agreements instead of starting companies. The danger is that the some of the large corporations they approach for a licensing agreement steal the technology and dare the inventor to sue them for infringement because they know the case will be handled by PTAB where the inventor’s patent will be invalidated. In addition, the lack of secure patent rights is also hindering the willingness of angel investors to invest in new technologies for startup companies.

US Inventor held their second annual conference, From Dreamers to Decision-Makers, on September 26^th-28^thin Washington, D.C. where several inventors shared their stories of having their patents infringed and then invalidated by the PTAB. The bills mentioned above were discussed in detail during the conference as well as the two new bills introduced last spring:

HR 8134, the Restoring America’s Leadership in Innovation Act (RALIA), introduced by Rep. Thomas Massie (R-KY) and Rep. Marcy Kaptur (D-OH)

HR 8132, the Balancing Incentives Act (BIA) introduced by rep. Marcy Kaptur (D-OH) and Rep. Thomas Massie (R-KY)

Attendees had been encouraged to come a day early to visit the offices of their Senators to express their opinions on patent legislation. Many were able to make arrangements to meet with the staff of their Senators and express their opinions about the bills. That same day, Dirk Tomsin of US Inventor hand delivered 7,350 letters to their Senator’s offices, along with petitions signed by over 4,500 signatories.

It appears that as a result of these efforts, the bills were not considered by the Judiciary committee for “mark up” during any of their September meetings. Congress is now in recess until after the election. However, the danger is that Congress will be in session for five weeks before the end of this session of Congress, so these bills could still be scheduled for “mark up” during that brief session.

The Senators comprising the Judiciary Committee are:

Chairman, Dick Durbin (D-IL)

Ranking member, Lindsey Graham (R-SC)

Majority Members

Sheldon Whitehouse (D-RI)

Amy Klobuchar (D-MN)

Chris Coons (D-DE)

Richard Blumenthal (D-CT)

Mazie Hirono (D-HI)

Cory Booker (D-NJ)

Jon Ossoff (D-GA)

Alex Padilla (D-CA)

Peter Welch (D-VT)

Laphonza Butler (D-CA)

Minority Members

Chuck Grassley (R-IA)

John Cornyn (R-TX)

Mike Lee (R-UT)

Ted Cruz (R-TX)

Josh Hawley (R-MO)

Tom Cotton (R-AR)

John Kennedy (R-LA)

Thom Tillis (R-NC)

Marsha Blackburn (R-TN)

Suppose any of the above Senators are your Senators. In that case, I urge you to contact their offices and express your opposition to PERA and PREVAIL unless PREVAIL is amended as suggested above. You can call the U.S. House switchboard at (202) 224-3121 to connect to your Senator’s office.

Tags: Intellectual Property
Posted in Inellectual Property, Legislation | No Comments »

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