U.S. President Donald Trump’s aggressively protectionist “Buy American†strategy would be a sure-fire plan to revive his country’s long-suffering manufacturing sector, if this were the 1950s, according to one international trade expert.
Mark Warner, principal of MAAW Law, says Trump is facing an uphill battle if he expects to repatriate a significant number of jobs and keep prices at a level consumers are willing to pay.
“He is going to find it very hard to bring back all production to the United States without dramatically increasing costs,†he told CTV’s Your Morning on Tuesday. “Donald Trump is living in a world in the 50s where products are made in one country.â€
Trump has said he would impose steeper tariffs on major U.S. corporations including Fiat Chrysler, Ford, General Motors, and Carrier if they expand their operations in Mexico to control costs, and said foreign-owned companies such as Toyota and BMW could be slapped with a “big border tax†on imported vehicles.
His tweets against private businesses have shaken executives and sent shockwaves through the markets. Toyota shares, for example, dipped 1.7 per cent after one such decree via social media regarding the company’s proposal to manufactures its Carolla sedan in Mexico.
Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax.
— Donald J. Trump (@realDonaldTrump)
Warner says even if Trump’s intimidations encourage more investment stateside, the number of new jobs gained will be disappointing. He notes the biggest attack on U.S. manufacturing has come from the introduction of new automation technology -- not foreign workers.
U.S. Bureau of Labor statistics show roughly five million manufacturing jobs have been lost since 2000, but overall factory output has not declined. In fact, between 2006 and 2013, data shows that manufacturing in the U.S. increased by 17.6 per cent.
“It may not mean that he (Trump) gets what he really wants, which is jobs in the U.S.,†said Warner. “A lot of manufacturing that might come back with automation as an attempt to keep prices down.â€
He points to athletic apparel-maker Under Armour. The company recently began selling underwear manufactured in the U.S. at a high tech 35,000-square-foot product development hub outside the brand’s hometown of Baltimore.
“I don’t think underwear has been made in the United States for a long time,†said Warner. “They are using a lot of automation, a lot of computerized stuff that takes measurement of people … I didn’t see a lot of mention of how many jobs are coming back.â€
Warner also believes Trump’s days of terrifying corporate America may be numbered. A growing number of business leaders are expressing their distaste for some of his policies.
“Companies are becoming louder and more willing to take him on. Amazon and Expedia have actually joined litigation in Washington State against his immigration policy,†he said.