Has Trump turned around US in­dus­try?

The Idaho Statesman (Sunday) - - BOISE STATE FOOTBALL - BY JIM PUZZANGHERA Los An­ge­les Times

Pres­i­dent Donald Trump prefers sweep­ing su­perla­tives when he talks about his record on the econ­omy. The Repub­li­can tax law has “the big­gest tax cuts and re­form in Amer­i­can his­tory” (they’re not). The new trade agree­ment with Mex­ico and Canada is “the most im­por­tant trade deal we’ve ever made by far” (the changes are more mod­est). And the un­em­ploy­ment rate has fallen “to the low­est level in more than 50 years” (it’s 49 and the con­tin­u­a­tion of a nine-year trend).

Then there’s Trump’s most grandiose claim: His ad­min­is­tra­tion has pro­duced “the great­est econ­omy in the his­tory of our coun­try” (it hasn’t; the com­bi­na­tion of fast growth and low un­em­ploy­ment was bet­ter in at least three other pe­ri­ods since World War II).

But Trump some­times gets more spe­cific. In re­cent months, he’s boasted about five in­dus­tries: steel, agri­cul­ture, au­tos, en­ergy and man­u­fac­tur­ing. Here are his claims and the facts:


The claims: “I came into of­fice, steel was a dead busi­ness,” Trump said at an Oct. 12 rally in Le­banon, Ohio. “Now they’re open­ing up plants, U.S. Steel, Nu­cor. They’re open­ing up plants all over the coun­try, big ones, new ones.”

Specif­i­cally, he said U.S. Steel is “open­ing up a min­i­mum of eight plants” as a re­sult of a 25 per­cent tar­iff his ad­min­is­tra­tion put on bil­lions of dol­lars worth of im­ported steel start­ing in March.

Nu­cor Corp. “just an­nounced a bil­lion-dol­lar plant. Brand­new. Al­ready started con­struc­tion,” Trump said on Oct. 1. The facts: The steel in­dus­try is “gen­er­ally health­ier to­day than it was in 2016” be­fore Trump took of­fice, said Lisa Reis­man, ex­ec­u­tive edi­tor of Me­talminer, an on­line mar­ket in­tel­li­gence plat­form that does fore­cast­ing.

But Trump is ex­ag­ger­at­ing the state of the in­dus­try when he took of­fice and the ef­fect of tar­iffs.

The U.S. in­dus­try wasn’t dead in 2016, but prices for oil, in­dus­trial met­als and other com­modi­ties started crash­ing in 2014. Com­mod­ity price swings are cycli­cal, driven by global forces, and the pen­du­lum swung the other way about a year or so ago.

“The com­mod­ity bull mar­ket started hap­pen­ing in July 2017. We didn’t have any tar­iffs in place, tax re­form hadn’t been passed yet,” Reis­man said. “Com­mod­ity prices were go­ing up be­fore those things hap­pened and then the poli­cies came into play.”

As for the eight new plants, no, that’s a Trump whop­per. U.S. Steel is not open­ing them, the com­pany said. Rather, U.S. Steel said this year that it is restart­ing two blast fur­naces at its Gran­ite City, Ill., plant and spend­ing $750 mil­lion to re­vi­tal­ize its Gary, Ind., plant.

And Nu­cor has not an­nounced a new $1 bil­lion plant. The com­pany said in Septem­ber that it would spend $650 mil­lion to ex­pand pro­duc­tion at its plant in Ghent, Ky.


The claims: “Our farm­ers have gone through a lot over the last 15 years. They’ve been taken ad­van­tage of by ev­ery­body. Prices have gone way down,” Trump said Oct. 1 in an­nounc­ing a re­vised North Amer­i­can Free Trade Agree­ment. “The agree­ment will give our farm­ers and ranch­ers far greater ac­cess to sell Amer­i­can-grown pro­duce in Mex­ico and in Canada.”

The facts: U.S. agri­cul­ture in­dus­try boomed from 2011 to 2014 be­cause of strong com­mod­ity prices, boosted by ex­ports, said the non­par­ti­san Con­gres­sional Re­search Ser­vice. Dur­ing what it called “a golden pe­riod,” net farm in­come hit a record high of $123.7 bil­lion in 2013, but it’s down 47 per­cent since then.

“Those years lead­ing up to 2013 were very good in agri­cul­ture,” said Nathan Kaufman, an ex­pert on agri­cul­tural economics at the Fed­eral Re­serve Bank of Kansas City.

Strong de­mand do­mes­ti­cally and from fast-grow­ing China led farm­ers to in­crease pro­duc­tion.

But larger har­vests, fu­eled by good grow­ing con­di­tions, led to a drop in prices. And now the trade war is a prob­lem for farm­ers.

U.S. crops have been hit with new tar­iffs from China, Mex­ico, Canada and the Euro­pean Union in re­tal­i­a­tion for tar­iffs put in place by Trump.


The claims: “Many car com­pa­nies are now build­ing and ex­pand­ing plants in the United States – some­thing we have not seen for decades,” Trump said in his State of the Union ad­dress in Jan­uary. “For many years, com­pa­nies and jobs were only leav­ing us. But now they are com­ing back.”

Among his spe­cific claims are that Toy­ota and Mazda will build a new plant in Alabama, Fiat Chrysler Au­to­mo­biles is mov­ing a ma­jor man­u­fac­tur­ing plant back to Michi­gan from Mex­ico, and many more new auto plants are com­ing.

The facts: Toy­ota and Mazda an­nounced in Au­gust 2017 that they would jointly build a $1.6 bil­lion assem­bly plant in the United States and in Jan­uary said the fac­tory would be in Huntsville, Ala. That is the only new U.S. fac­tory an­nounced by any of the ma­jor au­tomak­ers, said Kristin Dz­iczek, vice pres­i­dent of in­dus­try, la­bor and economics at the Cen­ter for Au­to­mo­tive Re­search, a non­profit re­search or­ga­ni­za­tion in Ann Ar­bor, Mich.

Fiat Chrysler said in Jan­uary that it would move some of its pickup truck pro­duc­tion back to an ex­ist­ing plant in War­ren, Mich., from Mex­ico, cit­ing the lower cor­po­rate tax rates. But new CEO Mike Man­ley said he was re­con­sid­er­ing that move.

Dz­iczek said that made sense. She orig­i­nally thought the move back to Michi­gan was less about tax changes and more about fear that Trump would pull out of NAFTA.

Mean­while, the 25 per­cent tar­iffs Trump im­posed on steel and alu­minum are a big hit for au­tomak­ers. The tar­iffs have added $400 to $600 to the cost of each ve­hi­cle pro­duced in the U.S., Dz­iczek said. And tar­iffs on many Chi­nese im­ports have raised the prices of auto parts.


The claims: “Think of it: We’re the sin­gle largest pro­ducer of en­ergy in the world. Did you ever think you were go­ing to hear that? This all hap­pened very quickly,” Trump said Oct. 2 in a speech to the Na­tional Elec­tri­cal Con­trac­tors As­so­ci­a­tion’s con­ven­tion in Philadel­phia.

He’s also said the U.S. is the No. 1 pro­ducer of crude oil and nat­u­ral gas. The facts: The U.S. is not the largest pro­ducer of en­ergy in the world, ac­cord­ing to the most re­cent data. In 2015, China pro­duced 2,958 mil­lion tons of oil equiv­a­lent, a mea­sure for pri­mary en­ergy sup­ply that in­cludes oil, nat­u­ral gas, coal and bio­fu­els, ac­cord­ing to a re­port from the In­ter­na­tional En­ergy Agency. The U.S. was sec­ond with

2,167 mil­lion tons.

White House of­fi­cials have said Trump is talk­ing about crude oil when he ref­er­ences en­ergy, even though en­ergy en­com­passes more than that. In any case, the U.S. has just be­come the world’s No. 1 pro­ducer of crude oil, at 11.3 mil­lion bar­rels a day in Au­gust, com­pared with Rus­sia’s es­ti­mated 11.2 mil­lion bar­rels a day.


The claims: “The last ad­min­is­tra­tion, with­out men­tion­ing names, the last ad­min­is­tra­tion said man­u­fac­tur­ing jobs, they’re dead. They’re gone,” Trump said at an Oct. 9 rally in Coun­cil Bluffs, Iowa. “We have 600,000 (that) have come back since the elec­tion.”

The facts: As of­ten hap­pens, Trump’s stats aren’t true. Data from the fed­eral Bureau of La­bor Sta­tis­tics show there were 410,000 man­u­fac­tur­ing jobs added from November 2016 to Septem­ber 2018, the lat­est fig­ures avail­able when Trump made his claim in Iowa.

The sec­tor was hit hard by the 2007-09 re­ces­sion, which ac­cel­er­ated a down­ward trend that had be­gun in 2000.

Man­u­fac­tur­ers shed about 2.8 mil­lion jobs from early 2006 to early 2010. Em­ploy­ment bot­tomed out at 11.453 mil­lion jobs in March 2010.


In re­cent months, Pres­i­dent Donald Trump has boasted about five in­dus­tries: steel, agri­cul­ture, au­tos, en­ergy and man­u­fac­tur­ing.

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