ICYMI: Trump’s Trade War Hitting Manufacturing Sector

In case you missed it… Bloomberg is highlighting how Donald Trump’s disastrous trade war — which is already hurting Ohio farmers and small businesses — is also negatively impacting U.S. manufacturers, which are “making less than they did a year ago.”

One Ohio company noted that they were holding off on hiring new workers because of Trump’s trade war: “If we lose $5 million of business it hurts.”

And in case you forgot …

KEY  HIGHLIGHTS:

  • After two boom years the picture has changed for America’s factories. Battered by rising uncertainty and the damper it has put on capital expenditures, slowing export markets, a stronger dollar, and higher input costs due to tariffs, U.S. manufacturers are making less than they did a year ago.

  • A widely watched index of manufacturing activity compiled by the Institute for Supply Management showed a contraction in August—the first since 2016. The Sept. 3 data release sent U.S. stock prices and bond yields tumbling as it confirmed a worrying trend that became visible over the summer, when Federal Reserve data showed factory output falling for a second consecutive quarter.

  • Trump is also more exposed politically to a manufacturing downturn than any Democratic rival. Nationally, manufacturing accounted for almost 12% of the jobs in counties that voted for Trump in 2016 vs. less than 7% in those that supported Hillary Clinton, says Mark Muro, a senior fellow at the Brookings Institution. In battleground states the divergence is starker, with factory jobs accounting for more than 21% of employment in Trump counties. “This is the one thing he was going to deliver. And Democrats are not vulnerable at all because if things go south they are not responsible at all,” Muro says.

  • At Gradall, an Ohio company that makes excavators used by municipal governments and heavy industry, business has been good this year, says CEO Mike Haberman. But he worries about what Chinese retaliatory tariffs will do to his exports to China, which now make up 6% of the company’s sales.

  • Add 25% to the $400,000 to $500,000 price tag on an excavator and it means losing business to a German competitor not subject to the same duties, which is one reason he’s not adding to the ranks of his 330 employees. “If we lose $5 million of business it hurts,” Haberman says.

 

READ MORE:

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