Made in the USA Reports

A Publication of the Made in the USA Foundation

Vol. 30 No. 1 © Made in the USA Foundation—January, 2018

Levi’s Has Returned to USA

Levi’s, the inventor of blue jeans in San Francisco in 1872, has started to make some of its classic jeans in the United States at reasonable prices. Levi’s legendary 501 “made in the USA” jeans are selling for $88. Many other “designer” jeans sell for $200. Levi’s is also making 505, 511 and 541 jeans in the U.S., in regular, slim and athletic fits.

President Trump’s Made in the USA Report Card

By Joel D. Joseph, Chairman, Made in the USA Foundation

President Trump has been in office for one year: It is now time to grade his achievements. “Probably one of the major reasons I’m here today –

trade,” Trump said two months after taking office. The President also campaigned on a promise to negotiate “better deals” with China and Japan and to hire Carl Icahn to conduct these negotiations. But Carl Icahn quit soon after being appointed and has not been heard from since. The President did hire Peter Navarro and Robert Lighthizer, two solid “Made in the USA” negotiators. But their hands have been tied by other factions in the White House including Gary Cohn and Steven Mnuchin, two globalists from the Goldman Sachs academy of unfettered international free trade.

China— D

Is President Donald Trump a “paper tiger” when it comes to trade, as some have suggested? He did not keep his campaign pledge to name China as a “currency manipulator” on his first day in office, and he left currency rates out of his executive orders on investigating why America runs chronic trade deficits with certain countries. And Trump said he might postpone talk of tariff threats vis-à-vis China to his second summit with Chinese President Xi Jinping. Reports say he will take action on steel “dumping,” but he has not yet acted on steel imports from China.

Just recently, the President did impose tariffs on imported Chinese solar panels, allowing him to earn a barely passing grade.

 

Japan— F

Candidate Trump labeled Japan a “currency manipulator” and unfair trading nation, but has done nothing at all to negotiate a new trade agreement with Japan. The President has done “nani mo” (nothing in Japanese) to improve our trading relationship with Japan.

MexicoF

During the campaign, the President promised to rip up NAFTA, the North American Free Trade Agreement, if he were elected, on day one. It has been one year and the U.S. is still negotiating with Mexico. We have not seen 35% tariffs as proposed by candidate Trump. They are a figment of the President’s imagination, like his border wall.

South Korea—C

The U.S.-South Korea deal, which was reached in 2007 and went into effect in 2012, reduces trade barriers between the two countries. Critics charged that South Korea has reaped a greater share of the benefits of the deal, an allegation Trump has personally echoed multiple times since his election while calling for changes to the deal. South Korea is the sixth-largest goods trading partner with the United States, accounting for $112 billion in two-way trade last year, according to the U.S. trade representative. U.S. companies exported $42  billion in goods to South Korea and imported $70 billion in goods last year, leaving a trade deficit of $28 billion. President Trump has imposed tariffs on Korean washing machines made by LG and Samsung. This should be effective in creating more jobs in the United States as both LG and Samsung announced they will be manufacturing washing machines in the USA. The fact that Trump did this even when North Korea is threatening the planet with nuclear weapons, earned him a passing grade.

Europe—F

Mr. Trump has complained that Germany is an unfair trader, but has done nothing but verbally complain to German Chancellor Angela Merkel. The President also promised a new trade deal with Great Britain that has yet to materialize. We do, in fact, have a massive trade deficit with Germany. It was nearly sixty-five billion dollars last year—second only to our deficit with China, which was three hundred and fifty billion dollars. The total European Union

trade surplus with the United States was $146 billion, 44% German, 24% Irish. Ireland has stolen most of the U.S. pharmaceutical industry causing this massive deficit with a country that has a population of less than five million people, about the population of Maryland. The reason U.S. pharmaceutical companies have set up shop in Ireland is because the Irish corporate tax rate is 12.5%. Trump’s corporate tax reduction to 20% will not have the incentive for these companies to come back home.

Buy American—F

Mr. Trump is a Johnny-come-lately to buying American-made products. His suits, shirts and ties are all made in China. After his Palm Beach wedding in 2005, Mr. Trump and his bride jumped into a Mercedes Maybach limousine. He also bought a limited-edition silver Mercedes SLR McLaren roadster, with a supercharged AMG V8 engine for $465,000. Mrs. Trump had her own Mercedes at the time.

Mr. Trump campaigned on building the Keystone Pipeline with American Steel. The Made-in-America Keystone Pipeline was a big fat lie. Most of its pipes had already been manufactured, a fact the White House grudgingly admitted when it exempted the project from any new Buy American rules a few months later. While some of Keystone’s pipes were made in the U.S., at least a quarter of them came from a Russian steel company whose biggest shareholder is an oligarch and Trump family friend. The company, Evraz North America, supplied Keystone and for years has lobbied in Washington against Trump-style protectionism.

A year after his Keystone event, Trump has yet to deliver on his pledge to boost the fortunes of American steel. Two self-imposed deadlines for trade action, one in June and one in July, have since come and gone. Meanwhile, the prospect of tariffs has led to a surge of cheap foreign steel into the U.S., with imports rising 24 percent in 2017, the fastest increase in years.

The Defense Department continues to buy Chinese-made rocket propellant, and the Army and Navy Pxs are stocked with imported clothing and other goods. I personally communicated with the buyers at these stores with offers from U.S. suppliers of American-made clothing, but was told, “we are going to continue to buy from overseas.” I mentioned President Trump’s executive order on buying American, one of those leather-bound orders that the President holds up in show and tell session with the press. The Army and Navy buyers said that they will continue to buy imports and have continued to ignore the President’s executive order.

Evaluation—Year One

Mr. Trump’s bad behavior and failure to play well with others has negatively affected trade relationships between the United States and other countries. For example, President Trump is not welcome in Britain because of his crass behavior. Britain has long been one of our most significant trading partners. His alarming tweets aimed at North Korea have hurt his leverage to extract concessions from China and South Korea. He has not accomplished any significant goals on trade and I recommend that he be held back and not be allowed to advance to another grade level.