According to analysts at ING, even though the US manufacturing growth has increased since President Trump kicked off his trade war, but we have to remember the economy was already in good shape and received further boost from a pick-up in real incomes and his 2017 tax reform.
Key Quotes
“Manufacturing production growth has been higher too, but it doesn’t beat growth in the rest of the economy and isn’t significantly higher than the average of the previous ten years. So, for now, we can’t really see anything, which we might call the ‘new industrial revolution’ that President Trump promised.”
“For jobs growth, it’s a different story. There are clear signs of positive direct effects of the tariff hikes, given the above-average jobs growth seen in the steel and aluminium industry. There is no disaggregated employment data for solar panels and washing machines, but indicative data, like units of washing machines sold, don’t look very bad either. Moreover, the mentioned counterweights to the price pressures have limited the negative employment effects of the cost increases. But the jobs growth is largely due to weaker productivity growth.”
“Despite the fact that manufacturing employment growth can largely be attributed to falling productivity growth, President Trump’s good jobs track record gives him the opportunity – politically – to say that his trade policies have been helpful and if anything, are likely to serve him well in the 2020 presidential campaign.”
“Concerning his particular interest in the ‘forgotten men’ from the Rust Belt states, the President can point to manufacturing employment growth there too but it is lower than in other states.”
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