Made in the USA Reports
Volume 29, Issue 2 February 2017
By Joel D. Joseph, Chairman, Made in the USA Foundation
At a recent White House press conference with Canada’s Prime Minister Justin Trudeau, President Trump said, “We have a very outstanding trade relationship with Canada. We’ll be tweaking it. We’ll be doing certain things that are going to benefit both of our countries. It’s a much less severe situation than what’s taken place on the southern border.” The President apparently does not want to acknowledge that Canada has been cheating us on trade for decades.
Currently, we have an $11 billion dollar annual trade deficit with Canada. This translates to be a deficit of nearly $1 billion per month. Geographically, Canada is an expansive country but with a significantly smaller population than California. Yet, per capita, our trade deficit with Canada exceeds our per capita trade deficit with China.
Trump supporters are big fans of red meat, beer, cheese and movies—four products that Canada trades unfairly. During the Obama administration, Canada challenged our Country of Original Labeling (COOL) requiring Canada to label its beef as a “Product of Canada.” Canada, along with Mexico, brought a bogus complaint against the United States to the World Trade Organization challenging COOL’s meat labeling requirement. The WTO, with an ad hoc Mexican “judge for a day kind of judge” predictably ruled in favor of Mexico and Canada. The result of this biased ruling was that our wimpy Congress caved in and changed COOL. It is because of our “friends” in Canada that we can now no longer have country of origin labeling on beef imported from any foreign country.
The North American Free Trade Agreement (NAFTA) was supposed to bring us free trade, but it has failed to do so. Canada charges a whopping tariff of 245.5% for any cheese imported from the United States. As a result, it is understandable that we are not shipping to Canada a lot of tasty cheese from Wisconsin or Vermont even though our biggest cheese producers are in states that border our northern neighbor. This is unquestionably unfair, and definitely, not very neighborly.
There is no doubt that Canada brews some fine beer. So why are the Canadians afraid of a little competition? Canada’s provinces prohibit the importation of beer. This means that all American-brewed beer is banned in Canada. No Sam Adams, no Sierra Nevada, no Blue Moon, etc., In other words, no American beer whatsoever unless it is brewed in Canada. “Canadian wine and beer producers have long complained of interprovincial hurdles, such as many provinces’ restrictions on shipping directly from an out-of-province winery to a consumer, or the decision last December by [Alberta’s] Premier Rachel Notley’s government to slap a 525-per-cent tax hike on craft beer from outside Alberta.” Globe and Mail, April 29, 2016.
Canada has taken billions of dollars in film production business away from Hollywood; not because of its notorious sunshine, but because of illegal film subsidies. An agreement called “The General Agreement on Tariffs and Trade”, signed by most nations of the world, prohibits subsidies for products and services. Over the years, Canada has spent billions of dollars in illegal tax subsidies to create a lucrative film industry and it has succeeded at our economic expense. Brokeback Mountain, Titanic, Texas Rangers, The Incredible Hulk, My Big Fat Greek Wedding and numerous other films were shot in Canada to take advantage of these huge Canadian subsidies.
Time to Get Tough, Mr. President
Mr. President, if you can’t get tough with Canada, how are you going to deal with China and Russia? You were way too nice, and naïve, in your recent meetings with Prime Minister Justin Trudeau. While I mentioned beer, cheese and movies, the largest share of our deficit with Canada concerns domestic automobile manufacturing. Unlike our U.S. car manufacturers, Canada doesn’t have to tack on an additional $1,500 per car to cover the cost of employee health insurance because they have socialized medicine north of the border. When you repeal and replace Obamacare, make sure that you consider how we finance our health coverage so that our domestic manufacturers are not put at a real and distinct disadvantage.
10 Great American Beers
To protest the unfairness of Canada’s ban on American beers, try one of the hundreds of craft brewed domestic bliss. We are suggesting ten beers that are very worthy of your consideration.
Europe may lay claim to the greater beer heritage but for some time now America has been at the forefront of the craft beer scene. With flavorsome new hops from Washington State’s Yakima Valley and hundreds of independent breweries intent on experimentation, the rest of the world has been playing catch up.
One of the best imperial stouts around, this is a beer that pushes your senses to the maximum. Boozy, roasted malt and dark fruit aromas; masses of molasses, chocolate and coffee in the flavor department; and it’s so rich, creamy and steeped in alcohol that you could be forgiven for thinking you’re supping a beer liqueur. Drink a bottle now and set some more aside for later: this hearty brew gets even better with age.
Sierra Nevada Pale Ale
Smooth, fragrant and full of complex hop flavors, this is one of the beer that caused British brewers to peer more closely at what their American counterparts were up to. With a light malty base and a resinous, pine-fresh bitterness it remains an exemplar of contemporary pale ale brewing.
Crooked Stave, Colorado Wild Sage
White sage and lemongrass are the savory additions that give this brew one of the most alluring perfumes you’ll find in a beer. Sharp lemon sourness causes puckering in the mouth before a subtle, herby bitterness takes over. For anyone keen to experience new beer flavors, this is a must.
Firestone Walker, Easy Jack IPA
Here’s one that has all the flavor of an American IPA at a reasonable strength. This Californian liquid gold is high on tropical fruit and grapefruit hop aromas and is a light, refreshingly zesty drink. It finishes with a lingering, dry bitterness, but those tropical notes continue to play on through. Perfect summer drinking.
Jolly Pumpkin Ales
This may make a dent in your savings but it’s an extraordinary bottle of brewing brilliance—an autumnal ale infused with chestnuts and spices before being aged in oak. It has a mature pungency – like a well-kept cheese or posh sherry – and is slightly sour, lightly sweet, distinctively spicy and a little bit funky. A rare treat.
Goose Island IPA
From a brewery respected the world over for its innovative approach to beer, Goose Island’s IPA has been the cause of many drinkers to realize there’s more to American beers than syrupy lagers. Even though it’s now owned by AB InBev, the mega brand responsible for Budweiser, the beer continues to ride near the head of the IPA pack. Full of fruity American hops, bitter from the outset with a crisp, dry finish. Quality stuff.
Brooklyn Insulated Dark Lager
This Brooklyn brewing ace has been delivering quality beer since 1988 and their excellent lager has become a UK supermarket staple for the craft connoisseur. But we’ve drifted to the dark side with this choice: a dose of black barley adding some warming, roasty flavours to the lightly hopped, clean, dry liquid.
Heretic, Evil Cousin
This double IPA has loads of trademark American citrus hop flavors and resinous bitterness, crammed into a beer with a soft malty body and toffee sweetness. Big flavours, a hefty amount of bittering and a double dose of booze – it’s not for the faint hearted.
North Coast, Le Merle
This is an excellent example of a Belgian-style farmhouse brew that has been subtly Americanized. Millions of tiny bubbles burst on the tongue, jabbing with lemony freshness and peppery yeast flavors. When the effervescence subsides, candy malts and spicy bitterness take over. Perfect for washing down a Thanksgiving turkey dinner.
Rogue Ales, Dead Guy Ale
Oregon, one of the US craft brewing hot-spots, is home to Rogue Ales, whose Dead Guy Ale is their take on a German Maibock (essentially a pilsner on steroids). It has a boozy whiff and fruity caramel malt flavors with typically Germanic spicy hops. A heavy, heady brew to be quaffed at a leisurely pace.
10 Great American Cheeses
Cellars at Jasper Hill Harbison
PHOTO: COURTESY OF JASPER HILL FARM.
Cellars at Jasper Hill Harbison, Greensboro, Vermont
This bundle of oozy, runny bliss is wrapped in spruce bark from the nearby forest and best enjoyed right out of the package with a spoon or poked at and scooped up with shards of cracker or crusty bread. Open it up, and you have an instant party. The flavor is floral, subtle, and tangy, and the spruce imparts magical notes of fall woods. Amazing with a dry rose or a fizzy cava.
Uplands Cheese Co Pleasant Ridge Reserve
PHOTO: COURTESY OF UPLANDS CHEESE.
Uplands Cheese Company Pleasant Ridge Reserve, Dodgeville, Wisconsin
The talented cheesemaker Mike Gingrich makes this smooth, firm cheese from the raw milk of his 150-cow herd only during the summer months, when the cows can graze on the lush pastures and the cheese takes on a fruity, olive-y, addictive depth. It’s aged four to six months or up to 15 months for the “extra aged” batches. It’s a full-flavored, utterly scrumptious award-winner, reminiscent of gruyere. Step up your mac n’ cheese, or serve this with crusty bread, fall apples, and cold cider.
Rogue Valley Creamery Smokey Blue
PHOTO: COURTESY OF ROGUE VALLEY CREAMERY.
Rogue Valley Creamery Smokey Blue, Central Point, Oregon
Smokey Blue is proof Americans can be cheese geniuses. From David Gremmels and his team of blue gurus in Oregon, this raw milk wheel is cold smoked for 16 hours over local hazelnut shells. I can’t even start to tell you what a brilliant idea this is. The result: sweet and smokey nuttiness that balances a sharp, blue bite. A great cheese for burgers or salads (think arugula and prosciutto), or a snack with a voluptuous zinfandel.
Cabot Clothbound Cheddar
PHOTO: COURTESY OF JASPER HILL FARM.
Cabot Clothbound Cheddar, Gerrnsboro, Vermont
This cheddar is English-inspired but all-American. The 40-pound wheels are carefully bandaged in layers of cloth and aged for about a year in the Cellars at Jasper Hill to coax out a symphony of sharp, toasty, nutty, caramely sweet flavors. This is a cheddar to make other cheddars embarassed. It’s firm and a bit crumbly. Makes a killer grilled cheese, especially with a few slivers of apple or slices of bacon.
Cypress Grove Chevre Humboldt Fog
PHOTO: COURTESY OF CYPRESS GROVE CHÈVRE.
Cypress Grove Chèvre Humboldt Fog, California
This American beauty gets its name from Humboldt County’s thick morning fog. Mary Keens has been making her goat cheeses since the 1980s, and helped launch the American artisanal cheesemaking revolution. A bite of clean, lemony, lactic goodness will reveal why; Humboldt Fog grows earthier and mustier with age. Its pillowy rind reveals bright white, smooth paste, bisected with a thin slash of black vegetable ash. In other words: It’s so pretty! It has the lusciousness of ice cream and is wildly addictive. Make a killer cheese plate with a drizzle of honey, some grainy bread, and a crisp white wine, or dress up a salad with this goat splendor.
Spring Brook Farm Tarentaise
PHOTO: COURTESY OF SPRING BROOK FARM.
Spring Brook Farm Tarentaise, Reading, Vermont
Inspired by the beloved alpine cheese Abondance, Tarentaise is crafted from the raw milk of organic grass-fed cows. Curds are cut by hand with a harp, then aged in the farm’s caves where they’re lovingly rubbed and flipped and nurtured for 10 months. The result is a big-flavored, complex beauty, redolent with notes of toasted hazelnut, ripe fruit, and buttered toast (Yum!). Cheese profits go to support a bigger project, the Farms for City Kids Foundation, and the farm doubles as an educational center. Tarentaise pairs beautifully with a juicy Pinot Noir, as well as marcona almonds and dried fruit.
PHOTO: COURTESY OF LANDAFF CREMERY.
Landaff Creamery Landaff, Landaff, New Hampshire
Did you know New Hampshire has Welsh roots? Cheese maestro Doug Erb got inspired by the Welsh cheese Caerphilly, but Landaff is all his own, and perhaps even tastier. It’s made from the raw milk of Erb’s herd of Holsteins, rucked away in the foothills of the White Mountains. His creation is hard yet milky and pliant, with complex sweet-tart flavors of creamy yogurt, fresh grass, and fragrant herbs. It will stand up to a peaty scotch or a hoppy IPA.
Cowgirl Creamery Red Hawk
PHOTO: COURTESY OF COWGIRL CREAMERY.
Cowgirl Creamery Red Hawk, Point Reyes, California
onley and Peggy Smith opened Cowgirl Creamery in Pt. Reyes Station, a picturesque postage-stamp-sized town on the Cali coast. Red Hawk was a wonderful accident. A few batches of their original cheese, Mt. Tam, became subjected to a natural strain of bacterium linens that moved down the coast of Marin in 2000. In an attempt at a solution, they washed the cheese with brine, but the brine only supported the grown of more (tasty!) b linens. Now, they repeat the process: The sumptuous triple cream gets washed to create a vibrant crimson-range rind, and the cheese is buttery-lush and just a bit beefy and pungent. Savor with a rich and lusty big Cabernet Sauvignon.
Meadow Creek Grayson
PHOTO: COURTESY OF MEADOW CREEK DAIRY.
Meadow Creek Grayson, Galax, Virginia
This is a stinker. So meaty and pungent and good. Grayson’s texture is custardy and sticky, its flavor hits in a wave of brawny, beefy fury. The wheels are lookers, too — handcrafted from the raw milk of an 80-head herd of Jersey cows, the bright orange washed rind reveals a setting-sun-yellow paste. Serve with a bright gewürztraminer and ripe pear, or top a burger with this luscious, smelly goodness.
Nettlw Meadow Kunick
PHOTO: COURTESY OF NETTLE MEADOW.
Nettle Meadow Kunick, Thurman, New York
This is made from 75% goat milk, 25% Jersey cow cream (that’s the breed with the highest butterfat content in its milk), 84% butterfat, and 100% excessive decadence. This triple creme from the Adirondacks is obscene in its buttery splendor, yet its tangy, goaty flavor keeps it fresh rather than cloying. Nettle Meadow Farm is home to more than 300 goats and dozens of sheep, and is also a sanctuary for retired and rescued farm animals. Serve this cheesecakey beauty with some (truffle!) honey and a bottle of rose or a crisp wheat beer, or for dessert with shards of darkest dark chocolate.
Made in the USA Reports
A Publication of the Made in the USA Foundation
Vol. 29 No. 1 © Made in the USA Foundation—January 2017
The Ten Percent Solution
By Joel D. Joseph, Chairman, Made in the USA Foundation
President Trump has repeatedly threatened companies considering a relocation to Mexico or China that they would be required to pay a tariff of 35% if they wanted to sell their products in the United States. I agree with the President that the U.S. government should discourage companies from moving offshore. I believe, however, that the better, and more achievable path to attain this goal, is to impose tariffs on Mexico, China and Japan (our three largest trading partners, responsible for 90% of our trade deficit) of ten percent across the board. At the same time, we can use the ten percent solution to encourage corporations like Apple, Microsoft and Google to repatriate most of the $2.4 that they have sitting in offshore accounts. These new laws could increase the revenues of the U.S. Treasury by more than $300 billion in the first year.
Bill of Attainder
The constitution of the United States prohibits a Bill of Attainder (Article I, Section 9, Paragraph 3). A Bill of Attainder is legislation that singles out an individual, company or group for punishment without a trial. When the President threatens Carrier, Ford Motor Company and other businesses with a 35% tariff, Mr. Trump is proposing a Bill of Attainder. Congress can and should pass a 10% tariff that applies to all imports from Mexico, China and Japan, not just on those companies threatening to leave the United States. Companies who have already left should not be in a better position than those planning to move in the future.
Why a Ten Percent Tariff on Chinese Imports is Reasonable
The President can negotiate with Mexico, China and Japan about the amount of the tariff that is appropriate for each country, but ten percent should be the target. The Chinese government recently imposed extra duties ranging from 2% to 21.5% on imports of large American-made cars and sport utility vehicles. At the same time, General Motors is now making the Buick Envision in China and importing it into the United States with no tariff. “Today’s announcement by General Motors that they are importing the Envision from China is a slap in the face to U.S. taxpayers and the men and women who worked so hard to save GM during its darkest time,” UAW President Dennis Williams said on December 4, 2015. A ten percent tariff would encourage GM to bring the Buick Envision production to the United States.
According to officials in the Obama administration, Chinese tariffs imposed on U.S. autos affected about two-thirds of the $8.5 billion worth of U.S. auto exports to China. The World Trade Organization found these tariffs to be illegal. According to the World Bank, U.S. tariffs on imported Chinese products average 2.9%, while Chinese tariffs on U.S. goods sold in China averaged 9.7%, nearly four times as high. A ten percent tariff on Chinese imports would level the playing field.
In order to avoid a trade war and to keep prices stable, a 10% tariff on all Chinese products is reasonable. Proposed Senate legislation to counteract Chinese currency manipulations suggest a 20% tariff. A ten percent tariff would be a fair and reasonable compromise.
In 2015, the U.S. goods and services trade deficit with China was $336.2 billion. By comparison, our U.S. exports to China totaled $116 billion. The import of goods from China totaled $482 billion. In other words, China sold us four times as much as we sell to them. And this is fair trade?
When NAFTA went into effect, the United States had a substantial trade surplus with its southern neighbor. In 2015, our U.S. goods and services trade deficit with Mexico was $49.2 billion, about a billion dollars per week. This massive deficit can be attributable to U.S. car manufacturers moving their assembly plants to Mexico seeking cheap labor and relaxed (or nonexistent) environmental regulations. At the time that NAFTA went into effect, there were three pesos to the dollar; now there are twenty. A ten percent tariff on Mexican goods would bring in more than $5 billion per year, create fairer competition and reduce our massive trade imbalance with Mexico.
The U.S. goods and services trade deficit with Japan was $57 billion in 2015. Japan does not buy many imported cars from the United States because it imposes large fees on imported vehicles. Japan, like China, has played games with its currency so that it can sell millions of cars and other products into the United States. The United States rebuilt Japan after World War II and has been enriching Japan through trade that has been tilted in Japan’s favor. Japan should negotiate with the United States and agree to a ten percent duty on Japanese imports.
Getting Offshore Money Back Home
These tariffs will keep billions of dollars within the United States by taxing imports and discouraging U.S. companies from relocating the manufacturing of products offshore.
To bring trillions of dollars back into the U.S., a one-time “special tax” should be applied on repatriating corporate profits that are sitting offshore in overseas bank accounts. Together, and within the first year, these two taxes will increase federal revenues by more than $300 billion while creating hundreds of thousands of good-paying jobs in this country.
December 2016 Newsletter
Made in the USA Foundation Agenda for 2017
Let’s Put the Pieces together in 2017
We plan to work with the Trump Administration and Congress to increase Made in the USA manufacturing. As you know, the President-Elect based a substantial part of his campaign on keeping jobs in the United States and bringing them back home. We have tried to convince the Obama Administration on these policies without much success. We did get the Agriculture Department to implement our suggestions on Country of Origin labeling for beef, but, when push came to shove, the Obama Administration, and Congress, caved into the Canadian/Mexican/World Trade Organization pressure to end country of origin labeling for beef. We anticipate more success with the Trump Administration. We will hold the President-Elect to these promises as follows:
- Government Purchases for Retail Stores
We will focus on getting U.S. government-owned facilities to purchase only Made in the USA products. These include the Army Air Force Exchange Service (AAFES), the Naval Exchange Service (NEXCOM), the Smithsonian Institution gift shops and National Park Service stores. We will help our members sell to these retail institutions. The military exchanges represent the second largest retail organization in the world. Walmart is the largest. More on Walmart’s Made in the USA program is below.
- Direct Government Sales
The U.S. government is required to buy American-made products. It has not lived up to the letter or the spirit of the law. We will pressure this administration to do so. We will help members sell to the Department of Defense and other federal agencies.
We will push our tax proposal, the Manufacturing Tax of Zero, that encourages manufacturing in the United States. Under this proposal, manufacturers who make a product 100% in America will pay no federal income tax. If a product is 50% made in the USA, the tax rate will be one-half of the standard corporate rate. Tied in with this proposal is a reduced tax rate for the repatriation of trillions of dollars in profits held overseas by U.S. companies. Together, these two proposals will not cost the U.S. Treasury a dime, and will create hundreds of thousands, perhaps millions, of jobs.
The Foundation will lobby once again require country of origin labeling for beef. Congress caved in last year to Mexican and Canadian pressure on country of origin labeling for meat. This has devastated the U.S. cattle industry, costing an estimated $20 billion is lost revenues. Multinational meat packers are distributing ground beef from many countries to U.S. grocery stores without a country of origin label.
- Executive Action
The Department of Transportation has jurisdiction over certain requirements for cars, trucks and tires. We asked the current Secretary of Transportation to enforce country of origin labeling laws, but were rebuffed. The new appointment to head DOT is Elaine Chao. Ms. Chao is the wife of Majority leader Senator Mitch McConnell. We believe Secretary Chao will be much more receptive to our proposals. Her home state of Kentucky is where Corvettes, Toyota Camrys, Avalons and Venzas and manufactured. Ford also builds trucks and SUVs in Kentucky.
We will petition the U.S. Department of Transportation to require enforcement of the American Automobile Labeling Act (AALA) at car shows. Ten million America consumers get their first look at new cars at auto shows in Los Angeles, Detroit, New York and many other cities. Currently, most car manufacturers are taking country of origin information off car windows at these car shows. The Foundation worked hard to get the AALA enacted, but DOT has not yet enforced it at auto shows.
Eighty percent of replacement tires sold in the United States are now imported. They are coming in from China, Thailand and many other countries. Tire manufacturers hide the country of origin of these products by labeling the country of origin on the inside of the tire, in black on black, so no one can see them. We will petition DOT to end this unfair and deceptive practice and require country of origin labeling on the outside of the tires, in a clearly visible label. One Made in the USA advocate has complained that his tire store tried to “Hancock” him into buying Chinese Hankook tires.
In addition, the Foundation will petition DOT to stop its program that allows Mexican trucks and Mexican truck drivers to deliver products from Mexico to destinations across the United States. If NAFTA is renegotiated, this is one provision that should be dropped. Trade does not require that unsafe trucks, and drivers who don’t speak English, should be granted unfettered access to use U.S. highways.
We formally asked the current Attorney General, Loretta Lynch, to notify CVS Pharmacy, Walgreens and other large, national pharmacies to label their prescription drugs with country of origin labeling. U.S. law requires all imported products be labeled with their country of origin. Currently, 80% of prescription drugs are being filled with drugs from China and India, two countries where sanitation and quality of pharmaceutical products is highly questionable. Ms. Lynch passed the buck to FDA, but the FDA will do nothing about it. The Attorney-General designate, Senator Jeff Sessions, is much more likely to get tough on retail pharmacies that hide important information from consumers.
We will continue to introduce our members to Walmart and Sam’s Club buyers. Walmart is buying $25 billion more in U.S. products every year. We have helped many companies add Walmart and Sam’s Club to their customer list. We have traveled in Bentonville, Arkansas, Denver and other cities to link American manufacturers to Walmart.
What Economists Learned in 2016 –
Long After Everyone Else
By HAROLD MEYERSON, executive editor of The American Prospect.
The trade deals they shilled for didn’t work out all that well. This week, Bloomberg’s Noah Smith published a list of “ten excellent economics books and papers” that he read in 2016. Number three on his list was the now celebrated paper, “The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade,” by economists David Autor, David Dorn and Gordon Hanson. Here’s Smith’s summary of the work and its consequences:
This is the paper that shook the world of economics. Looking at local data, Autor et al. found that import competition from China was devastating for American manufacturing workers. People who lost their jobs to the China Shock didn’t find new good jobs—instead, they took big permanent pay cuts or went on welfare. The authors also claim that the China Shock was so big that it reduced overall U.S. employment. This paper has thrown a huge wrench into the free-trade consensus among economists.
Smith’s account of the paper’s effect is absolutely right: Economists’ astonishment and dismay at Autor & Company’s revelations were palpable and widespread. Which raises a question many of us have been raising for years: Why have mainstream economists been the last people to understand the consequences of the policies they advocate? During the debate that swirled around the congressional legislation granting permanent normal trade relations to China in 1999 and 2000, unions, progressive think tanks (most especially the Economic Policy Institute), and other liberal groups predicted with unerring accuracy the job loss that would follow if PNTR was enacted, the concomitant failure to generate adequate replacement jobs, and in a few cases, even the political shifts likely to follow in the states of the rapidly deindustrializing Midwest—shifts that did not fully manifest themselves until this November. But to the high priests of mainstream economics, and to the Robert Rubins and Timothy Geithners who provided policy guidance to the Bill Clinton and Barack Obama administrations, these were fringe opinions, narrowly self-interested, and not worthy of serious consideration.
Well, yes—the industrial Midwest was self-interested; its residents had an understandable reluctance to seeing their economies dismantled and their middle-class decimated.
The lesson from all this is that mainstream economics has to be viewed less as an empirical, much less scientific, discipline, and more as an elegant regurgitation of the worldview of dominant financial powers.
The lesson from all this is that mainstream economics has to be viewed less as an empirical, much less scientific, discipline, and more as an elegant regurgitation of the worldview of dominant financial powers. By endorsing the efficiency of markets and the concomitant curtailment of regulation, by assuming that trade with industrializing, poverty-wage mega-nations would not have a devastating impact on American manufacturing workers, by a thousand other deaths of common sense, the American economic mainstream reduced itself to little more than a priesthood serving the gods of Wall Street. The dissents of dissident economists—from Joe Stiglitz and Dani Rodrik to Dean Baker, Jared Bernstein, and the gang at EPI and Global Trade Watch, from Thea Lee at the AFL-CIO to Mark Levinson at the clothing and textile workers unions and Clyde Prestowitz at his own institute, from the pages of The American Prospect to the pages of, well, The American Prospect—were drowned in propaganda masquerading as economics.
Now that the jobs have fled, now that the deregulation has led to an epochal collapse and a woefully selective recovery, the masquerade is over—or rather, should be over. The whole point of Trickle Downers is to hasten it to its long overdue end.
If you have any more ideas for creating jobs in the U.S., please let us know. Chairman@MadeUSAFdn.org.
Thank you very much for your support.
Have a Happy Holiday Season and a Prosperous New Year!
The Staff and Volunteers of the Made in the USA Foundation
Made in the USA Reports
A Publication of the Made in the USA Foundation
Vol. 28 No. 11 © Made in the USA Foundation–November, 2016
How President Trump Can Bring Back Jobs
and Create New Ones
By Joel D. Joseph, Chairman, Made in the USA Foundation
Tom Friedman, New York Times columnist and apologist for the global economy, said on the Bill Maher show recently that Trump can’t bring back jobs. Wrong. President Trump, with Congressional help, cannot only bring back jobs, he can create new ones.
During the lame duck Congress, the President-elect can start the jobs-creation process. First, he can meet with the CEOs of General Motors, Chrysler, Ford, Carrier and Nabisco, all companies planning to move jobs to Mexico. He can warn them to stop the relocation process because he, and Congress, will change NAFTA and impose tariffs on Mexican imports making the move unprofitable.
What To Do on Day One
On day one, January 20, 2017, President Trump can ban Mexican trucks and drivers from U.S. roads. Currently, Mexican trucks are free to make deliveries in the United States because of a 2011 regulation of the U.S. Department of Transportation. With a stroke of the pen, the new Secretary of Transportation can rollback this dangerous and costly regulation.
The United States government owns two of the largest department stores chains in the world, the Army Air Force Exchange Service (AAFES) and the Naval Exchange Command (NEXCOM). Together these are known as military PXs. At present, these PXs sell mostly imported products even though hundreds of domestic suppliers produce competitive U.S.-made products. By executive order, President Trump can create 100,000 jobs by eliminating imported products from AAFES and NEXCOM. Similarly, the President can require the National Park Service stores, Smithsonian Museum shops and all other government-owned retail stores to stock only American-made products.
Federal law already requires labeling of all imported products with their country of origin. This law is not being enforced at all. Even though 80% of prescription drugs sold in the United States are now imported from India and China, U.S. consumers are not informed about this on their prescription drug labels. President Trump can enforce this law. There are also criminal penalties for not labeling products with their country of origin (19 USC 1304(I)), so the President can instruct his new attorney general to send a letter to CVS, Walgreens and all other drug stores to label their prescription drugs with country of origin information or face criminal prosecution.
Section 2205 of NAFTA, the North American Free Trade Agreement, provides that the President can send a letter to his counterparts in Canada and Mexico and withdraw from the agreement six months later. President Trump should give Canada and Mexico notice on January 20th that the United States is withdrawing from NAFTA. He can then negotiate with Mexico and Canada on the terms of a new agreement, or he can recommend to Congress that it impose a 10% across the board tariff on Mexican goods imported into the United States. He can earmark these funds to pay for the border wall, so that, in effect Mexico will pay for the wall.
I have proposed the Manufacturing Tax of Zero to bring manufacturers back to the United States. In the same law, Congress can reduce taxes on companies who repatriate trillions of dollars that they have sitting in offshore accounts.
Most U.S. drug companies have fled the United States for the greener shores of Ireland because Ireland charges a 12.5% income tax. The Manufacturing Tax of Zero addresses this problem. This proposed law includes a 28% corporate tax rate, with a zero percent tax rate for manufacturing companies and a onetime amnesty rate to repatriate earnings held offshore at a 14% rate.
Companies making 100% of a product in the U.S. would pay no federal corporate income taxes. The tax would be pro-rated so that if a company makes a product with 75% U.S. content, the tax rate would be one-quarter of the standard corporate tax, or 7%. The Manufacturing Tax of Zero would motivate drug companies, auto companies and other manufacturers who have fled the United States, to come back home. It would also incentivize current manufacturers from leaving the country to pursue lower taxes
We should impose countervailing tariffs on China, Japan and other countries for currency manipulation. Currency manipulation, where a country lowers the value of its currency to gain an unfair advantage, is rampant, particularly in Asia. Sen. Sherrod Brown (D-Ohio) is the primary sponsor of the Currency Undervaluation Investigation Act S 433. The bill, cosponsored by U.S. Sens. Jeff Sessions (R-AL), Charles Schumer (D-NY), Lindsey Graham (R-SC), Debbie Stabenow (D-MI), and Richard Burr (R-NC), would require the Commerce Department to treat currency manipulation as an illegal subsidy and impose applicable duties.
The Manufacturing Community Bill of Rights
In Europe it is very difficult for a manufacturer to close and plant and relocate it overseas. The current American law on plant closings is weak. It is called the WARN act, the Worker Adjustment and Retraining Notification Act. This act requires manufactures to give 60 days notice before closing a plant, but does not require anything more than notification. I am proposing that the WARN act be amended by a new law with substantive rights for workers and the community where the factory is located.
Motorola recently built a state-of-the-art cell phone factory in Ft. Worth, Texas. In 2014, Motorola was sold to China’s Lenovo and announced that this flagship plant would be closed. A new amendment to the WARN statute would have kept this plant in operation either as a Lenovo factory, or, as a factory making cell phones for another brand. Similarly, this law could prevent Carrier from moving from Indiana to Mexico, and Nabisco from relocating south of the border.
A Manufacturing Community Bill of Rights (MCBR) law would create a right of a community to keep a manufacturing plant intact. The law would provide that a manufacturer planning to move overseas would first have to give notice to its community, its state and its workers of its plants. The local and state government and workers of the faactory would then have the right to purchase the facility within six months.
Current law requires this notification, but only provides for 60 days notice. The Worker Adjustment and Retraining Notification Act (WARN) became law in 1989. The Manufacturing Communities Bill of Rights is a proposed amendment to the WARN law. In addition to expanding the notice period to six months, the MCBR would provide for loan guarantees so that the community would have a realistic chance of acquiring manufacturing facilities.
The MCBR would keep factories humming in the USA. First, this law would make it more expensive and risky to relocate. The law would also discourage factories from moving overseas because most companies do not want to turn their factories over to their domestic workers because their products would compete with the company’s imported products.
Canada and Mexico filed a complaint against the United States challenging the Country of Origin Labeling (COOL) Act. Our north and south “neighbors” complained that if they had to label meat as product of Canada or Mexico, Americans would probably not buy it. Although it has an official sounding title, the World Trade Organization is a rigged, unfair, and unjust organization favoring small nations. Recently, the WTO ruled that COOL was a barrier to free trade. Congress and President Obama caved in and amended the COOL Act to exclude the requirement of meat labeling with regards to its country of origin. In 2016, American cattlemen have lost $20 billion during due to the fact that U.S. consumers are unaware that they are buying Canadian and Mexican meat. Congress should reinstate the COOL Act for meat.
For many years, China has been dumping steel and aluminum into the United States illegally. The Commerce Department has already taken some action concerning certain steel and aluminum products, but more action needs to be taken to keep our aluminum and steel industries alive and well.
Handmade in the USA:
Von Holzhausen Bags and Accessories
Launched in 2015, von Holzhausen is a Malibu-based collection of accessories with a focus on design, sustainability and quality of life. The line offers a well-edited assortment of essential, easy to wear bags and accessories in timeless palettes, at prices that leave out the traditional retail mark-up.
Award–winning designer Vicki von Holzhausen began her career in the automotive industry, working for Audi and Mercedes–Benz in Europe. There she won numerous honors and saw many of her concepts come to life. After returning to her native Los Angeles, she sought to create a brand combining her technical expertise with an ethical approach to consumerism in order to offer products that add value to the world.
All von Holzhausen products are handmade by master craftsmen in the U.S and are offered exclusively through www.vonholzhausen.com. A portion of each sale benefits California women in need.
Made in the USA Reports
A Publication of the Made in the USA Foundation
Vol. 28 No. 10 © Made in the USA Foundation—October, 2016
Chrysler is Not An American
Car Company Any More
By Joel D. Joseph, Chairman, Made in the USA Foundation
In 2009, the U.S. government bailed out Chrysler Corporation, first giving it a bridge loan of $4 billion, then lending it $6 billion to fund operations while it was in bankruptcy. In May, 2011, Chrysler repaid $11.2 billion of its outstanding $12.5 billion in government loans. The total cost to U.S. taxpayers was $1.3 billion.
In a slap in the face to American taxpayers, Chrysler announced in July that it would cease production of passenger cars in the United States, but continue to make Jeeps and trucks in the U.S. While Chrysler’s actions to move car production abroad are despicable, part of the blame must be placed on the U.S. government’s failure to require Chrysler, as a part of the bailout agreement, to keep auto production in the United States.
More Misleading Chrysler Ads
The Made in the USA Foundation objected to misleading Chrysler ads for the Chrysler 300 several years ago that included an “Imported from Detroit” slogan. The Chrysler 300 was and is still made in Canada. Now, ads for the Chrysler Pacifica include the same slogan, and the Pacifica is also made in Canada, not Detroit.
Chrysler also has misleading ads for its muscle-car, the Dodge Charger. The ads proclaim that the Dodge Charger is “Domestic. Not domesticated.” The Charger is not domestic. Domestic means, according to Merriam-Webster, “of, relating to, or made in your own country.” Concerning ads broadcast in the United States, domestic means the United States. The Charger is made in Canada.
Warning to Chrysler
We gave Chrysler legal notice that if it does not pull these offending ads, that a complaint will be filed with the Federal Trade Commission and a court action initiated. We cannot allow Chrysler to cheat American taxpayers, move production offshore and then use misleading ads to imply that its cars are made in the USA when they are not.
Trader Joe’s Turmeric is False, Misleading and May Contain Lead
Turmeric is a spice that is supposed to be good for you. Dr. Andrew Weill said, “Turmeric (Curcuma longa) is a culinary spice that spans cultures – it is a major ingredient in Indian curries, and makes American mustard yellow. But evidence is accumulating that this brightly colored relative of ginger is a promising disease-preventive agent as well, probably due largely to its anti-inflammatory action.” Dr. Weill cited studies showing that turmeric fights arthritis, Alzheimer’s Disease and cancer.
However, the FDA, and the State of New York, determined that certain turmeric brands contained high levels of lead, a contaminant that can harm the human brain. The recalled turmeric came from Pakistan and India.
Trader Joe’s buys its turmeric from India and/or Pakistan and repackages it in the United States. It falsely labels its turmeric as “Product of USA.” The only domestic source of turmeric (and this is fresh turmeric, not powdered turmeric) is Kauai Organic Farms, a family owned and operated farm on the North Shore of Kauai. Kauai is known as the Garden Island of Hawaii, it offers nutrient rich soils and a constant supply of fresh rainwater. It has proven to be the ideal location growing turmeric and ginger. Phil and Linda Green operate the farm.
We have given Trader Joe’s notice that we will sue it unless it immedidately changes its labels to show the true country of origin. We are also testing turmeric samples for their lead content.
Handmade in the USA:
and Fire-Resistant Clothing
While clothing options for the hard-working individual are improving, there’s still a huge gap between fit and function. Incidental’s owner/operator, Bria Fleming, got first-hand experience with this problem during her many seasons as a wildland firefighter. “There’s nothing worse than having a running chainsaw or a flaming drip-torch in your hands, and just feeling the constant need to pull up your pants,” says Fleming. “The fit of wildland uniforms and workwear in general is poor at best, dangerously distracting at worst, especially for women.”
Luckily, Fleming had been sewing clothing as a hobby for years. She decided to combine two great interests into one, and Incidental Sewing & Design went live in January of 2016.
Incidental offers two basic products – shirts and pants – and the client details the rest! Any fabric, any features, any specifications. Add a lining to a shirt to make it a jacket, or leave off the sleeves for a vest. Customize pants with pockets designed to fit your favorite tools. And the best part? Each garment is made to your measurements.
And if you already have the clothing you need? Incidental also does repairs and alterations. Need a smartphone-sized pocket for your Nomex shirt? Done. Want to add cargo pockets to your favorite jeans? Done. Need to replace the zipper on your favorite hunting jacket? Done.
Incidental does it all, and with USA-made materials to boot.
Get in touch today to start your project! Www.incidentalsewing.com. First-time clients get 15% off with code NEWBIE1!
Made in the USA Reports
A Publication of the Made in the USA Foundation
Vol. 28 No. 9 © Made in the USA Foundation—September, 2016
Let’s Impose a Consumer Boycott on Russia
By Joel D. Joseph, Chairman, Made in the USA Foundation
Two and a half years ago President Obama announced that he was imposing sanctions against Russia because of its invasion of Crimea. Those sanctions have been meaningless as Russian goods continue to flow freely into the United States. After invading and conquering Crimea, Russia has sent troops, and its deadly anti-aircraft weapons, into eastern Ukraine. It was recently confirmed that Malaysian flight 17 was shot out of the sky over the eastern Ukraine by a Russian-controlled missile killing 298 innocent civilians. The world’s response has been lame and ineffective in punishing Russia’s violations of international law.
Congress has the power to impose a complete ban on the importation of Russian products. Until Congress acts, consumers have the power to stop buying Russian products. Russia is known for producing three products: oil, vodka and caviar, yet we have not imposed sanctions on these Russian cash-cows. Stolichnaya, Russia’s leading vodka, freely flows in most bars and restaurants in the United States.
Pyotr Smirnov founded his vodka distillery in Moscow in 1864. During the October Revolution of 1917, the Smirnov family had to flee the country. Pyotr’s son, Vladimir Smirnov, established a factory in the United States, where Smirnoff has been made for more than 80 years. So drink Smirnoff, Tito’s or another fine American brand of vodka and pour the Stoly down the drain.
Caviar is the pickled roe of sturgeon or other large fish. Sturgeon is the fish of choice for quality caviar. The United States is home of an excellent source of caviar: California Royal White Sturgeon. This nutty flavored caviar is white sturgeon, native to California. The pearls are large, and light to dark brown in color. The White Sturgeon is the largest freshwater fish in North America and is the third largest species of the sturgeon in the world. Don’t buy Russian caviar, buy California caviar.
The Russian oil giant Lukoil operates more than 300 gas stations in New York, Pennsylvania, New Jersey and Delaware. Lukoil is a very visible and easy target to boycott, with thousands of competing gasoline stations available. Hundreds of thousands of Americans with east European origins live in this populous region and should picket and boycott these symbols of Russian aggression.
Russia Invades Colorado
Red Fox (not to be confused with the comedian Red Foxx) is a Russian company that has just invaded Colorado with stores in Boulder and Lyons. Red Fox is an appropriate name for a sneaky Russian company to sell its outdoor clothing and gear that is made in Russia and other comrad nations like China and Vietnam.
Congress Has the Authority
Article I, Section 8 of the U.S. Constitution provides Congress the power to regulate foreign commerce and to “to define and punish piracies and felonies committed on the high seas, and offenses against the law of nations.” Russia’s invasion of the Ukraine is an offense against the law of nations and Congress should impose punishment by banning the importation of all Russian products. We don’t need Russian oil, caviar, vodka or outdoor apparel. If Congress acts decisively, Russia and President Putin will get the message. If Congress fails to act, American consumers can show their muscle by boycotting everything made in Russia
What Congress Can Do About Creating Jobs
The Made in the USA Foundation has successfully lobbied for passage of the American Automobile Labeling and the Country of Origin Labeling Act. These two laws help consumers buy more American products. But Congress can do so much more to create jobs in the United States.
Jobs leave the United States for five primary reasons:
Health Insurance costs;
Illegal Subsidies and Dumping;
Congress can bring companies home by changing the tax code. Most U.S. drug companies have fled the United States for the greener shores of Ireland because Ireland charges a 12.5% income tax. We have proposed legislation, the Manufacturing Tax of Zero to address this problem. This proposed law includes a 28 percent corporate tax rate, with a zero percent tax rate for manufacturing companies, and a onetime amnesty rate to repatriate earnings held offshore at a 14 percent rate. U.S. corporations are sitting on trillions of U.S. dollars held in offshore accounts. Companies making 100% of a product in the U.S. would pay no federal corporate income taxes. The tax would be pro-rated, so that if a company makes a product with 75% U.S. content, the tax rate would be one-quarter of the standard corporate tax, or seven percent.
In order for the United States to impose tariffs on products from low wage nations like Mexico and China, we would have to leave NAFTA and the World Trade Organization. First, we should renegotiate NAFTA because Mexico is taking our auto industry. Mexico manufactured one million cars in 2005 and expanded to three million cars in 2013, most bound for the U.S. market. Ford has already announced that all of its small cars, and many of its larger vehicles, would be made in Mexico.
One reason that cars are being imported from Japan, Canada and Europe is that manufacturers in those nations do not have to pay for their worker’s health care. The cost of paying for employee healthcare for General Motors, Ford and Chrysler is about $1,500 per vehicle in the United States. Congressman John Conyers of Michigan has introduced H.R. 676, “The Expanded and Improved Medicare for All Act.” Sixty-two members of Congress have signed onto this bill. This bill would replace Obamacare with Medicare for all. Besides helping American consumers, this law would relieve manufacturers and other businesses of the burden of providing health care for their employees.
Illegal Subsidies and Dumping
There currently is in place legislation that can stop illegal subsidies and dumping. For example, China was illegally subsidizing and dumping solar panels in the United States, threatening the existence of the U.S. solar panel industry. The Made in the USA Foundation joined with the Coalition for American Solar Manufacturing to seek tariffs on these panels. The U.S. Commerce Department imposed heavy duties on Chinese panels and the U.S. solar industry is back on its feet.
Currency manipulation where a country lowers the value of its currency to gain an unfair advantage is rampant, particularly in Asia. Sen. Sherrod Brown (D-Ohio) is the primary sponsor of the Currency Undervaluation Investigation Act S 433. The bill – cosponsored by U.S. Sens. Jeff Sessions (R-AL), Charles E. Schumer (D-NY), Lindsey Graham (R-SC), Debbie Stabenow (D-MI), and Richard Burr (R-NC) – would require the Commerce Department to treat currency manipulation as an illegal subsidy and impose applicable duties.
On September 16th Congressman Steve Israel introduced two bills that we strongly support, “American Parks American Products Act” (H.R. 6054) and “Bring the Jobs Home Loan Act” (H.R. 6053).
The “American Parks American Products Act” would require the National Park Service to only sell merchandise that is made in the United States, and the “Bring the Jobs Home Loan Act” would authorize Small Business Administration (SBA) loans that would assist businesses that want to re-shore manufacturing jobs.
“We need to do more to encourage American companies to move the production of their goods back to U.S. soil,” said Congressman Israel. “If we want American manufacturing to thrive again, then we need to show that we believe in the significance of the ‘Made in the USA’ label. That is why I am introducing two bills that will require our National Parks to exclusively sell merchandise produced in America, and provide loans through the Small Business Administration to firms that want to bring manufacturing jobs back from overseas.”