Latest news with #GordonHanson
Wall Street Journal
27-05-2025
- Business
- Wall Street Journal
The Real Story of the ‘China Shock'
Few academic papers have been as influential—or as misunderstood—as those by David Autor, David Dorn and Gordon Hanson. Politicians and pundits often use these authors' papers to claim that China's rise has cost the U.S. up to 2.4 million jobs due to surging Chinese imports between 1999 and 2011. But these studies focus narrowly on what happened to manufacturing employment in local labor markets, not the U.S. as a whole. It's true that communities exposed to heavy Chinese import competition saw steep drops in manufacturing jobs and a rise in local unemployment. Crucially, the displaced workers mostly stayed put rather than moved for new work. It's no wonder these academic papers resonated because they highlighted real pain in America's industrial heartland. But treating the China shock as a verdict on national employment is a mistake.
Yahoo
10-05-2025
- Business
- Yahoo
Trump's ‘Manufacturing Renaissance' Is Even Harder With Tariffs
(Bloomberg) -- Supply Lines is a daily newsletter that tracks global trade. Sign up here. Is Trump's Plan to Reopen the Notorious Alcatraz Prison Realistic? As Trump Reshapes Housing Policy, Renters Face Rollback of Rights Vail to Borrow Muni Debt to Ease Ski Resort Town Housing Crunch NYC Warns of 17% Drop in Foreign Tourists Due to Trump Policies What's Behind the Rise in Serious Injuries on New York City's Streets? US President Donald Trump says his tariffs will spark a 'manufacturing renaissance.' But the duties themselves are making that already monumental task even more challenging. In order to build and expand factories, companies need machinery and raw materials — many of which are typically imported and now subject to a variety of punitive tariffs. That compounds a host of pre-existing obstacles to realizing Trump's vow to re-industrialize America, which has lost 6.8 million manufacturing jobs since 1979 as production has moved to cheaper countries and automation has increased. Labor shortages, a costlier workforce, global supply chains: the Covid pandemic put a spotlight on the massive challenges of reshoring factories. Now Trump's chaotic overhaul of trade policy has added a layer of uncertainty to producers who need some degree of assurance on tariffs — how elevated they'll stay and for how long — before making long-term investments. 'The obstacles are huge,' said Gordon Hanson, a professor at the Harvard Kennedy School and one of the authors of a paper that coined the term 'China shock' for the loss of US manufacturing from imports of cheaper goods. 'My gut tells me it's not going to happen.' Nora Orozco wants to open a Texas factory with 200 new jobs for her footwear company Evolutions Brands and eventually move production from Mexico there. But those plans are on hold because she needs to buy equipment that only comes from China, and Trump's tariffs have more than doubled the cost. 'I like the idea of onshoring, but this makes it impossible for us,' said Orozco, who, along with many other executives, have filed over 1,100 individual requests for tariff exclusions for Chinese-made machinery. More than half of the US's imported goods are inputs for manufacturing, according to the National Association of Manufacturers. Both Democratic and Republican presidents have tried to revitalize US manufacturing that reached its peak employment in 1979, but it's now only 8% of the workforce. The industry had nearly half a million vacancies in March, the latest data available from the Bureau of Labor Statistics, and a 2024 Deloitte analysis showed 1.9 million manufacturing jobs could go unfilled in the next decade. The White House points to studies that concluded Trump's first-term tariffs created thousands of jobs. But other research from the Federal Reserve shows Trump's tariffs cost more manufacturing jobs than they added due to rising input costs and retaliatory tariffs. Also in Trump's first term, more than 231,000 jobs were affected by companies shifting work overseas, based on petitions for federal Trade Adjustment Assistance that helped workers who lost jobs or hours to off-shoring production. More than half were in manufacturing, and the total number was higher than in Barack Obama's final term. The Trump administration has touted announcements of companies investing in the US, including a $500 billion pledge from Apple Inc. But many of those announcements were tentative or had already been in the works. Companies that would be in a position to move production say they are holding off because they don't know whether tariffs are permanent or just leverage to negotiate trade deals. Manufacturers also cite the higher costs of labor and complying with regulations in the US as well as a lack of adequate infrastructure as reasons that discourage re-shoring. Tax cuts and deregulation in Trump's first term spurred a surge in announcements for domestic factory jobs, but those fell off with his first trade war, according to data compiled by the Reshoring Initiative, a nonprofit that advocates for returning manufacturing to the US. When it comes to assessing how long it would take to bring those jobs back home, it's important to differentiate between building big factories from the ground up and manufacturers who could quickly increase production at existing plants that are operating at less than full capacity, said Harry Moser, the group's founder. 'The big assembly plants, that's where you're going to take years, and the uncertainty will cause that not to be happening until the companies believe everything's stabilized and they know what the rules are going to be,' Moser said. The US is never going to return to a time like in the 1950s when low-skill manufacturing jobs were plentiful and a third of the entire workforce was involved in manufacturing, said Jay Bryson, chief economist for Wells Fargo & Co. 'Will manufacturing facilities move back to the United States? Undoubtedly they will,' Bryson said on an April 10 webinar. 'But make no mistake, we're not going back to 1955.' --With assistance from Marie Monteleone. US Border Towns Are Being Ravaged by Canada's Furious Boycott Maybe AI Slop Is Killing the Internet, After All Pre-Tariff Car Buying Frenzy Leaves Americans With a Big Debt Problem What the US Would Lose If Trump Pushes Out Legal Immigrants Inside the Dizzying Chaos of Running a Freight Business Under Trump ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
