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U.S.-China Trade War Heats Up

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A continued stalemate in trade negotiations has resulted in the U.S.-China trade war heating up this past week. On May 10, the United States raised the 10 percent duty to 25 percent on $200 billion worth of imports from China. Included in “List 3” of 5,745 products now subject to a 25 percent import tax are machinery and mechanical appliances such as hydraulic presses, drilling machines, forging or die-stamping machines; ships and boats such as canoes, sailboats and motorboats; live or frozen fish and crustaceans; sunscreen, makeup and shampoo; carpet and other floor coverings; wooden home furnishings; and even string Christmas lights.

On May 13, the Chinese Foreign Ministry declared that China “will never succumb to external pressure” and announced $60 billion in retaliatory tariffs that will take effect on June 1. The retaliatory tariffs are based on the list of products released by China last September, and more than 5,000 products exported to China from the United States will face …

March 2019 – Economics Observations

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By: Dr. Ken Mayland
ClearView Economics, LLC

As an economist it is just too tempting to pass up commenting on the Green New Deal (GND). President Trump, in El Paso, said the plan "sounds like a high-school term paper that got a low mark." Perhaps for once, the President has understated the case. 

Here is what the framers of the GND seek to achieve. Within 10 years of enactment, the nation is to be fully powered by renewable energy sources. This excludes nuclear energy. This would require the virtual elimination of commercial airlines and internal combustion vehicles. What is more, the plan would necessitate the retrofitting of residential, commercial and industrial structures.

And did you catch the allusion to FDR’s New Deal? Well, the GND also is held to be a stimulus plan, as it attempts to address employment and inequality by guaranteeing jobs with “fair” pay, family and medical leave, paid vacations and retirement benefits. Furthermore, there would be universal health ca…

Bipartisan Efforts Underway in D.C. on Workforce Development Policy

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Washington is responding to calls from manufacturers for help in developing a skilled workforce. One of the few bipartisan bills signed into law by President Trump increased spending on job training programs—an effort strongly supported by PMA.

Senator Lamar Alexander (R-TN), chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, recently stated his intent to renew the Higher Education Act (HEA) during this congressional term. Congress has not fully reauthorized HEA since 2008, making only minor changes when it extended the law in 2013. PMA is working with policymakers to expand HEA to treat credentials equally with two- and four-year degrees and allow Pell Grants for short-term skills training. Intending a bipartisan process, Alexander highlighted additional priorities for HEA renewal, including other provisions strongly supported by PMA such as a new accountability system measuring colleges’ employment, graduation, and loan-repayment rates.

February 2019 – Economics Observations

By: Dr. Ken Mayland
ClearView Economics, LLC

I’ll make two observations about the government shutdown.

First, what was the real cause of the shutdown?  The true cause of the shutdown was the fact that Congress failed to complete a budget – by September 30 – before the new fiscal year began.  Some areas of appropriations, like the defense budget, were in place as FY2019 began.  Other areas of the budget, however, encompassing the 800,000 government workers, were not nailed down as the new fiscal year started.  These areas were running on “automatic pilot,” in the form of a continuing resolution.  Time ran out on the authority to spend without a budget deal in place.  Obviously, one side wanted spending for “the wall” and the other side didn’t.  On $4.1 trillion of annual government spending outlays, $5.7 billion of spending on some fashion of a border barrier is inconsequential.

My second observation regarding the government shutdown concerns its economic (i.e., GDP) impact.  Various es…

Congress Turns its Attention to Tariffs as New Reports Show Damage to U.S. Industry Sectors

With the shutdown temporarily ended, Congress turned its attention to other issues including trade. Two bills were introduced in Congress aimed at reining in the President’s power to impose Section 232 (national security) trade restrictions.

The Bicameral Trade Authority Act, introduced by Senator Pat Toomey (R-PA), would give Congress more control over Section 232 investigations. The Coalition of American Metal Manufacturers and Users supports the legislation (PMA is a founding member of the Coalition) as the bill contains provisions that would allow Congress to review and terminate 232 tariffs already in place, namely the steel and aluminum tariffs.

Senator Rob Portman (R-OH) reintroduced the Trade Security Act of 2019, a bill that would move Section 232 national security investigations to the Department of Defense and provide Congress more oversight of Section 232 investigations. However, Senator Portman’s bill would only apply to future Section 232 investigations so the steel and …

New Year, New Congress

The 116th Congress convened on January 3, 2019 with a dynamic shift in power, with Democrats now holding a 235-199 majority in the House and electing Nancy Pelosi as Speaker, the first Member in over 60 years to regain the Speakership after losing a majority. In the Senate, Republicans increased their majority to 53-47.  Predictions of gridlock were unfortunately accurate, as even before Democrats took control in the House, a dispute over funding a border wall resulted in the failure to pass a government funding bill.  Large parts of the government continue to be shut down as of this writing.  Both sides continue to be entrenched in their positions.  Today (January 11) is a significant day as many federal workers will miss their first paycheck.  This includes a wide variety of employees, including, just to name a few, FBI Agents, customs officials, meat inspectors, TSA officers and Commerce Department officials who review steel tariff exclusions.  The result is that many important age…

Wall Street Journal Article Features the Impact of Tariffs on PMA Member

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It’s been nearly nine months since the Trump Administration announced tariffs on steel and aluminum, and U.S. manufacturers are still struggling to remain competitive in a global market. In a Wall Street Journal article titled “Trump Tariffs Pit Auto Companies Against Each Other,” reporters Chester Dawson and Mike Colias spoke with PMA member Clips & Clamps Industries. The article states:

This summer, Jeff Aznavorian, president of Clips & Clamps Industries, a small Detroit-area parts maker with about 57 employees, sent one-page letters to about 15 customers proposing a cost-sharing arrangement for future contracts. Clips & Clamps was on pace to turn a profit this year, but rising materials costs have wiped out its margin.

Two customers agreed. A few politely declined. One buyer from Canada wrote back, expressing sympathy. “They basically said: ‘I’m sorry your government is doing this to you, but what do you expect me to do about it?’” Mr. Aznavorian said.

The experience of …