While we’re certainly not political pundits, we are keeping a close eye on Washington waiting for President-Elect Trump to take office. After the stormy election period, we’re looking forward to a little peace and quiet on our television sets but curious about how the coming Trump presidency will affect our industry.
Trump has promised to withdraw from the Trans-Pacific Partnership (TPP), renegotiate President Bill Clinton’s NAFTA agreement and bring attention to China’s currency manipulation and unfair trade policies.
According to the AFL-CIO, the TPP is an obstacle for jobs. They claim that the TPP will cause job losses, as with other formerly signed trade agreements and will at least cause wages to remain steady and at worst lower wages. The US Chamber of Commerce has a different stance on the agreement and claim that jobs tied to trade tend to have 18% higher wages over those that do not.
Many manufacturing organizations claim that NAFTA supported the initial decline in American manufacturing. Canadian Prime Minister Justin Trudeau has said he’s willing to open up negotiations. However, according to an article on ForeignPolicy.com, the Congressional Research Service has reported that, in the period since NAFTA was signed, exports to Canada doubled while imports from Mexico jumped 251% from 1993 to 2014.
The trade deficit with China was about $316 billion in 2014. Robert Scott, an economist with the Economic Policy Institute in Washington, DC, estimates that the U.S. trade deficit with China has cost the U.S. approximately 3.2 million jobs between 2001 and 2013. Other economists claim that the trade deficit plays only part of a role in job losses.
For companies who have manufacturing plants and/or assembly plants in China and Mexico, the Trump policies could spell trouble. But there is also some opportunity for manufacturing companies based in the U.S. For example, local-for-local manufacturing is sure to be on the rise. A survey by SCM World showed that 677 of their survey respondents plan to add supply chain jobs versus 241 respondents who said they will eliminate supply chain jobs. Locally sourced and locally manufactured goods may initially have a higher cost; however, bringing U.S. jobs back onshore and expanding American manufacturing is certain to have a positive impact on the U.S. nonwoven industry.