Our government could do a lot more to level the playing field for manufacturing. While the Reshoring Initiative does not support individual candidates, we do recommend policies that will bring manufacturing back from offshore, and we try to document candidate positions on these issues.
Reducing our trade deficit is the best route to improving the economy, employment and government deficits. The economic stimulus of manufacturing growth will solve most of our national problems and reduce budget deficits to the point where we might be able to afford some of the politicians’ promised programs.
Continued efforts at the federal level are necessary to create an economic environment that will motivate companies to bring back offshored work. Besides a lower corporate tax rate, a value-added tax (VAT) and regulatory reform, these are our highest priorities:
Skilled Workforce: The Labor and Education departments should focus on helping communities and companies develop skilled manufacturing and engineering professionals.
Currency: Reduce the value of the U.S. dollar by 30 percent against almost all other currencies. John R. Hansen, Ph.D., previously a World Bank economist, has proposed a market access charge that would eliminate the overvaluation of the dollar by the flow of world funds into the safe haven that is the U.S.
Focus: Emphasize reducing imports as much as increasing exports.
Educate company management on use of total cost of ownership instead of price in making sourcing and siting decisions.
Call on the public for help. Everyone has a role to play in reshoring, including OEMs, unions, local and state governments, retailers, consumers, Wall Street and venture capital and economic development organizations.
Here are some known candidate positions.
Supports reshoring and rejects the Trans Pacific Partnership (TPP).
Her plan to “make America the first choice for manufacturing production worldwide” can be found here: www.hillaryclinton.com/issues/manufacturing.
Pledges to take back tax breaks for firms that ship jobs overseas. (We believe this change would be more symbolic than substantive.)
Quote: “Why don’t we do what people say we should, and have tax credits and incentives for companies that want to reshore jobs, bring them back, build the facilities here?”
On taxes: She would strengthen rules preventing inversions, the practice of U.S. companies shifting their corporate headquarters to lower-tax countries. (This would not have much impact on manufacturing.)
Reshoring Initiative comment: We prefer eliminating all special credits and reducing the corporate tax rate to 22 percent.
Longtime critic of offshoring.
His “Make America Great Again” hats are stamped with the guarantee that they’re “proudly made in the USA.” However, a huge portion of products from the Trump empire are manufactured overseas.
Opposes the TPP.
His plan for reshoring can be seen here: www.donaldjtrump.com/positions/us-china-trade-reform. Among other things, it would lower the corporate tax rate to 15 percent; fix our budget deficit and debt; end Chinese export subsidies, intellectual property violations and currency manipulation; and apply a 45 percent tariff on Chinese products.
Trump on globalization: “Globalization…wipes out our middle class and our jobs. ...Our country will be better off when we start making our own products again, bringing our once great manufacturing capabilities back to our shores.”
Reshoring Initiative comment: Trump’s heart is clearly in bringing manufacturing back to the U.S. He needs a broader approach to strengthening U.S. manufacturing, especially on workforce development and replacing other taxes with a VAT.
The Reshoring Initiative believes the winning strategy for the country is leveling the playing field and recruiting and training the world’s top talent. Let’s not waste any more time!
Editor’s note: Harry Moser is the president of the Reshoring Initiative. His column will appear every other month, alternating with Austin Weber’s “On Campus.” Has your company reshored production? Are you thinking about it? We’d like to hear of your success or help you achieve it. With your approval, we would love to report on your successes or opportunities in future issues. Contact email@example.com.