April 30/May 7, 2018: Volume 33, Issue 23
By Reginald Tucker
Last spring FCNews reached out to Harry Moser, president and founder of the Reshoring Initiative—and an authority on all things related to U.S. manufacturing and onshoring trends—to get his take on the Trump Administration’s strategic approach to boosting America’s manufacturing economy. We followed up with Moser a year later to see how he scores the president in this regard.
In last year’s “Made in the USA” special edition, Moser cited several governmental initiatives/ actions that would have to take place in order to bring more jobs back to the U.S. At the top of the list was the president’s decision to lower corporate tax rates. Moser gives Trump high marks on this issue, calling it a “big move.” However, he believes a 15% tax rate would have been better. “Part of the impact is psychological,” Moser told FCNews, adding that “companies are not wanting to pay much higher taxes here than in all other countries.”
On reducing regulatory restraints in business, another key component of Trump’s economic initiatives, Moser says it’s a “good start.” (See “Room for improvement” section below.)
Another key promise made on the campaign trail was to restructure what he considers lopsided trade deals with America’s largest trading partners. Moser’s take? “The [stats] that have come out on U.S. duties being much lower than those charged by other countries are damning. We have not yet made significant changes, however. Similarly, we face VATs offshore and do not apply a VAT—which is typically 15%. This is far more important than duties.”
By and large, Moser is very encouraged with what he’s seeing so far, although is not overly “impressed by the technique,” he noted. In terms of grading, he gives Trump an “A+ for effort and a B+ on domestic issues such as taxes. Otherwise, incomplete.”
But when it comes to the bottom line impact on U.S. manufacturing, Moser says the numbers don’t lie. His research shows reshoring and foreign direct investment (FDI) manufacturing job announcements reached 171,000 in 2017—that’s up 50% from 2016 and 2,800% from 2010 (see chart).
Room for improvement
Despite signs of early progress, Moser believes more can be done. To that end, the Reshoring Initiative is advancing a national policy “competitiveness toolkit” to balance the $700 billion/year U.S. manufactured goods trade deficit. This toolkit, according to Moser, would achieve the following:
- Level the playing field. Create a vetted national policy tool to select optimal actions to bring back the desired number of manufacturing jobs with the least collateral damage.
- Debunk key myths. Overcome the wide belief that the U.S. cannot—and will never again—produce many of the products that have been lost to offshoring. The key is to show that there is a path to adding millions of manufacturing jobs.
- Create a “unified, quantified” economic proposal. Moser believes we need to advance from the “current condition that many groups are proposing without quantifying the impacts of their suggested solutions.”
The Reshoring Initiative has also developed an Import Substitution Program (ISP), which enables economic development professionals to replace imports with local production by helping U.S. companies decide to reshore and foreign companies to invest in their respective regions. In short, ISP is designed to stimulate FDI and reshoring while helping to strengthen producers’ positions with minimal incentives, fortify local supply chains around OEMs and bolster workforce programs.
Manufacturers are invited to utilize free tools from the Reshoring Initiative to re-evaluate offshoring by visiting reshorenow.org. The group also welcomes reshoring case histories from the flooring sector.