One of the things we often here in the current debate about protectionism is that the “US doesn’t build anything any more.” That could not be further from the first. Dave Smith, who who is an authority in the energy sector and a contributor for US Daily Review, wrote a piece that cuts through the fiction and fact when it comes to what the US makes. In an article for US Daily Review, Smith wrote:
“While it is true that the number of employees in manufacturing has been on the decrease – according to the official Bureau of Labor Statistics numbers, manufacturing employment peaked at just over 19.5 million in 1979 and has fallen to approximately 12.3 million workers today – manufacturing output – the true measure of the economic activity – has increased. According to the Federal Reserve Bank of St. Louis Industrial Production Index, manufacturing output has nearly doubled since the 1979 high water mark for manufacturing employment, and has increased by nearly 500% since the 1950s, a decade often looked upon as a golden age of the American factory.
“We make more “things” in the U.S. than ever before; we just need fewer people to make them because of efficiency and increasing gains in worker productivity. By usual metrics, creating more products using fewer resources is considered a good thing.”
An example of the many things that the US “makes” can be found in the specialty chemical industry. They are one of many industries that have been hit by China’s retaliatory tariffs.
The Society of Chemical Manufacturers & Affiliates (SOCMA) has responded to an announcement by China that it plans to impose tariffs on billions of dollars in U.S. exports, including chemicals, in retaliation to the recently proposed U.S. tariffs on Chinese aluminum, steel and other products. Jennifer Abril, SOCMA President and CEO, issued the following statement:
“The U.S. and Chinese tariffs that have been proposed in the last 24 hours could dramatically impact the specialty chemical industry. Many of the proposed targeted products will impact the business of specialty chemistry, from vital upstream building block chemicals to the dozens of downstream market segments.
SOCMA member companies manufacture specialized chemistries used in many applications – from polyethylene used in oil and gas, epoxy resins used in coatings and adhesives, to sulfates/sulfonates in home and cleaning products. These tariffs will impact SOCMA members in two negative ways. First, the U.S. tariffs will increase the cost of chemical raw materials that specialty manufacturers use in the development of their products. And, on the back end, the Chinese tariff could dramatically increase the cost of U.S. goods exported to China.
China’s Ministry of Commerce has made it clear that China intends to retaliate with equal intensity and scale. Thus, SOCMA strongly urges the White House and U.S. Trade Representative (USTR) to work with the Chinese government to come to a non-tariff resolution before the proposed tariff schedules become operative.”
The organization went on in a statement to note that “the SOCMA is part of a $300 billion industry that’s fueling the U.S. economy. Our members play an indispensable role in the global chemical supply chain, providing specialty chemicals to companies in markets ranging from aerospace and electronics to pharmaceuticals and agriculture.”
The organization went on to say that “As the only U.S.-based trade association solely dedicated to the specialty and fine chemical industry, we are expanding our foundation by developing ChemSectors with a focus on growing key market segments. Our industry network extends to more than 20,000 influencers and decision makers in the specialty chemicals supply chain.”
Kevin Price, Host of the Price of Business and Editor in Chief of US Daily Review, said in an interview that “these tariffs are already having far reaching implications. They are the kind of policies you think would be done by people with low to no real world business experience, it is surprising to see them done by an administration that boasts about its business prowess. Overnight, orders for goods are being shut down or not taken because people do not know what the final price will be for them will be after the tariffs, and that is the kind of basic information you must have to operate in any economy.”