Donald Trump said his tariffs on Chinese imports would bring factory jobs back to the US, but that’s not happening

• American companies are pulling out of Chinese plants, but they’re not returning the work to the US
• An index tracking the level of manufacturing jobs brought back to the US decreased for the third year in a row in 2018 despite Trump’s trade measures

Jodi Xu Klein

When US President Donald Trump’s administration imposed tariffs on US$250 billion of Chinese goods last year, the move was sold to the American public as a magic bullet that would bring jobs back to the US. It misfired. Under mounting pressure as tariffs threaten to drive up costs, US manufacturers in China are indeed packing up and heading elsewhere. Companies including Nike, Crocs, Roomba and GoPro are now producing most of their goods outside the country, having set up operations in Vietnam, India, Bangladesh and Mexico. Dell, Sony, Nintendo and HP are reportedly considering such moves. But very few are moving back to the US. “Trump’s tariffs may have sent the message to ask US companies to consider reshoring, [but] very few will actually follow through,” said Daniel Ikenson, director of the Centre for Trade Policy Studies at the Cato Institute, a non-partisan think tank. “Making products in America has become too expensive.” Manufacturers continue to view countries other than the US as more desirable locations to produce or purchase a wide variety of goods, according to the consulting firm A.T. Kearny. Its Reshoring Index, which tracks the amount of US goods imported from other countries and manufactured domestically, decreased for the third year in a row in 2018 despite Trump’s trade measures. While tariffs did help push US companies out of China and into other parts of Asia, they have not been responsible for producing more US jobs, analysts say. “There is no sign that US manufacturers are going to come back because of the trade policy. As a matter of fact, manufacturers are struggling because of the policy,” said Johan Gott, who wrote the A.T. Kearny research report. “It makes more sense to make goods in economies where the labour is cheaper and abundant.” It is true that since Trump took office in January 2017, the number of US manufacturing jobs has risen. Last month, the figure stood at 12.8 million, up 400,000 from when his administration began. Labour statistics, however, show that this increase in manufacturing jobs has lagged overall job growth. Since 2017, the US economy has added close to 6 million jobs, Labour Bureau data show. Jobs in manufacturing, which accounts for about 10 per cent of total economic output, should have increased by 600,000 in that period to keep pace with economic growth, said Lauren Goodwin, an economist and strategist at New York Life Investments, which manages about US$567 billion in assets. “So that increase is really not very impressive. It’s actually lagging the average economic growth,” she said...MORE