As US factories falter, WH insists economy is like ‘a rock’
After a brief surge during his first years in office, and despite his lofty promises, the American manufacturing rebound has begun to crumble under President Donald Trump.
Auto plants and steel mills are shutting down. Companies are announcing layoffs and furloughs. Factory output is in the red.
The year-end outlook is grim, whipping up fears that as the global economy slows, Trump’s trade wars with China and Europe — with tariffs on hundreds of billions of dollars of goods — could push the world’s largest economy over the edge and into recession. Most worrisome for the president, as he prepares to fight for a second term next year, the picture is darkest in regions of the country that gave him his paper-thin margin of victory in 2016, despite losing the popular vote nationwide. The White House, for its part, is having none of this talk. Throughout September — as job creation slowed, key indicators fell, consumer confidence waned and factories spun down — Trump attacked Democrats and the Federal Reserve, anything but his trade policy, while accusing the news media of “begging” for a recession.
“The PMI manufacturers’ index has gone substantially up,” Trump said during a Sept. 25 news conference. “Our country is the strongest it’s ever been economically.” Not so. In fact, the most closely watched gauge of American factories’ health — the Institute for Supply Management’s manufacturing index — had just fallen into the red in August for the first time in three years. And a week after Trump spoke, it fell to the lowest level since the Great Recession. Tim Fiore, chair of the ISM manufacturing survey, told AFP the drop-off this year was the steepest in this century.
“It’s like a nosedive,” he said, warning that recession risks were mounting. “I think if we stay below 50 for a couple more months, it’s not going to feel very good.”
As of August, Wisconsin, Pennsylvania, North Carolina and Michigan had fewer people working in manufacturing than they did at the end of 2018, according to Labor Department data.
Trump’s 2016 margin of victory in Pennsylvania, Wisconsin and Michigan — crucial battleground states — was fewer than 78,000 votes out of nearly 14 million cast.
But in an irate television appearance, Trump’s senior trade adviser Peter Navarro accused the news media of “singing some song” about a weakening economy. “This Trump economy is strong as a rock. Manufacturing is strong as a rock,” he said in a tirade on CNBC. He said highlighting Pennsylvania’s job losses was merely “cherry-picking the data.” But there are quite a few cherries to pick.
Louisiana’s Democratic Gov. John Bel Edwards on Sept. 30 blamed Trump’s trade wars for the bankruptcy of Bayou Steel, which put nearly 400 people out of work. In Michigan’s Oceana County, where Republican support surged in the 2016 elections, a steel foundry operated by train manufacturer Wabtec announced last month it would close by the end of the year and lay off 61 workers due to “declining business conditions.”
Earlier in the summer, the Russian-operated NLMK USA steel mill laid off almost 100 employees in bellwether Mercer County, Pennsylvania, blaming Trump’s tariffs on the imported steel slabs it processes. Congressman Mike Kelly, a Trump supporter, pleaded with the White House for help to no avail.
Mercer County gave Trump a major boost in 2016, with a surging Republican vote tally helping put him over the top statewide.
Across the nation, the manufacturing slump is hitting Republican counties hardest, according to data from the Brookings Institution.