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Phase One Deal Lacks Transparency, Keeps Vast Majority of Tariffs in Place

American businesses, farmers and consumers will continue to pay billions in taxes each month even with the Phase One Deal

WASHINGTON, DC January 14, 2020 – President Trump and a trade representative from China are expected to sign the Phase One trade deal tomorrow. Ahead of the signing, Americans for Free Trade, a coalition of more than 150 associations from every sector of the economy that are united in the fight against tariffs, has released the following statement from spokesperson Jonathan Gold in response to the deal and to the latest report that some details of the deal may not be disclosed to the public.

“While the Phase One Deal does demonstrate some progress, it does not do nearly enough to relieve the burden created by the trade war. The vast majority of the tariffs – which are taxes paid by Americans, and not China – will remain in place, continuing to damage the American economy and hurt American businesses, farmers, workers and consumers. On top of that, it appears the White House will not release all of the plan details, contributing to the uncertainty faced by millions of Americans who are paying billions of dollars in tariffs each month. Americans for Free Trade strongly encourages the president to release the details of this Phase One Deal and immediately begin negotiating a final deal that removes all of the tariffs.”

BACKGROUND

The Administration May Not Release Details Of The Phase One Deal Before It Is Signed. “As China and the United States prepare to sign a phase one trade deal on Wednesday, doubts remain about whether all the details of the agreement will be released publicly and whether Beijing can meet the lofty purchasing demands.” (Finbarr Bermingham and Adam Behsudi, “U.S. and China may not release full details of trade deal that they’ll sign this week,” South China Morning Post and POLITICO, 1/14/20)

“Overall, Americans Have Paid An Additional $46 Billion Since The Trade War Began In February 2018 Through November 2019.” “In November alone, Americans paid a total of $6.2 billion in tariffs, compared to about $2.8 billion in November of 2017, before the start of the trade war. This significant increase in tariffs paid by Americans is primarily driven by tariffs implemented by the Trump administration, which account for over $3.5 billion of the total in November.” (Press Release: “Trade War Has Cost Americans Additional $46 Billion, Including $3.5 Billion in November 2019 Alone,” Tariffs Hurt the Heartland Website, 1/9/20)

ICYMI: Fed Study Shows Tariffs Hurt American Manufacturing

Good afternoon – 

The Federal Reserve released a study over the weekend that found the trade war – and most notably the tariffs – have hurt American manufacturing rather than helping it. The study finds “the tariffs imposed by the Trump administration in 2018 led to higher prices and fewer manufacturing jobs.”

The authors of the report, two economists at The Fed, also explain how the argument that the negative impact of tariffs are “worth” the short-term pain because they are boosting American businesses is flawed:

“While one may view the negative welfare effects of tariffs found by other researchers to be an acceptable cost for a more robust manufacturing sector, our results suggest that the tariffs have not boosted manufacturing employment or output, even as they increased producer prices.”

This report is the most recent piece of proof of the significant damage the tariffs are causing American manufacturing — the industry they are supposedly trying to help. According to the Institute for Supply Management (ISM), the manufacturing industry has contracted four months in a row, with ISM Chairman Timothy Fiore, “Global trade remains the most significant cross-industry issue.” And as American manufacturer Dan Digre recently told NPR, the tariffs are slowly driving him out of business and potentially forcing him to move production overseas:

“‘We’re trying to keep building speakers here in the U.S., but there’s only a couple of us left in the country to do it,’ Digre says. ‘And if these tariffs go on a lot longer, I don’t know if there will be anybody left in this country to do it.’ Ultimately, Digre says, he might have to move his whole factory overseas — exactly the opposite of what the president said he wanted when he started this trade war.”

Tariffs Continue to Damage American Manufacturers

WASHINGTON, January 3, 2020 – For the fifth straight month, the U.S. manufacturing industry has contracted and experts agree that the trade war and tariffs are a primary driver for this continued weakness. The Institute for Supply Management’s (ISM) index dropped to 47.2, the lowest level since June 2009. Americans for Free Trade, a coalition of more than 150 associations from every sector of the economy that are united in the fight against tariffs, released the following statement from spokesperson Jonathan Gold in response to today’s ISM Manufacturing Report

“Rather than helping, like some continue to claim, tariffs are significantly damaging American manufacturers. That’s because American businesses like manufacturers are the ones paying the tariffs – not China. And they are the ones suffering from the uncertainty and volatility the trade war creates. While the Phase One Deal shows some positive movement, today’s ISM report reiterates the need for the president to come to a final deal with China that removes all tariffs on American companies.”

Today’s ISM report comes on the heels of a new study released by the Federal Reserve earlier this week, which found “the tariffs imposed by the Trump administration in 2018 led to higher prices and fewer manufacturing jobs.” It went further to explain that tariffs are not “worth” the short-term pain because they actually hurt American businesses:
“While one may view the negative welfare effects of tariffs found by other researchers to be an acceptable cost for a more robust manufacturing sector, our results suggest that the tariffs have not boosted manufacturing employment or output, even as they increased producer prices.”

BACKGROUND

ISM Drops To 47.2 In December 2019, The Lowest Level In More Than A Decade. “Manufacturing activity in the U.S. contracted to its lowest level in more than a decade last month even as China and the U.S. showed progress on the trade front. The Institute for Supply Management said Friday its manufacturing index fell in December to 47.2. That’s its lowest level since June 2009, whet it hit 46.3. Economists polled by Reuters expected a reading of 49 for December. Anything below 50 represents sector contraction.” (Fred Imbert, “Manufacturing economy weakest in a decade as December ISM index comes in at 47.2,” CNBC, 1/3/20)

American Manufacturing Company Pays A Higher Tariff Rate To Manufacture Speakers In The United States Than It Would To Manufacture Speakers in China. “His factory is still in Minnesota, but it depends on some components imported from China. Since last fall, the company has had to pay tariffs on those components — tariffs that are now 25%. Ironically, if Digre built whole speakers in China, like some of his competitors do, he’d have to pay only a 15% import tax…The trade war has contributed to a slowdown in manufacturing in recent months. U.S. factory activity has declined for four consecutive months.” (Scott Horsley, “His Company Makes Speakers. Now He’s Speaking Out, Opposing Tariffs,” NPR, 12/2/19)

Manufacturing Constricted For The Fourth Month In A Row In November. “November was the fourth consecutive month of PMI® contraction, at a faster rate compared to the prior month. Demand contracted, with the New Orders Index contracting faster, the Customers’ Inventories Index remaining at ‘too low’ levels and the Backlog of Orders Index contracting for the seventh straight month (and at a faster rate). The New Export Orders Index returned to contraction territory, likely contributing to the faster contraction of the New Orders Index.” (November 2019 Manufacturing ISM Report on Business, Institute for Supply Management, 12/2/19)

“Manufacturers Have Borne The Brunt Of The U.S. Trade War With China.” “Big picture: Manufacturers have borne the brunt of the U.S. trade war with China. The dispute between the world’s two largest economies have disrupted global supply chains and contributed to a broader global slowdown.” (Jeffry Bartash, “U.S. manufacturers still suffering from China trade fight, tepid global economy, ISM finds,” MarketWatch, 11/1/19)

17%

As we are learning more about the Phase One trade deal with China, it’s important to keep in mind this is only a small step forward. The vast majority of the tariffs are still in place. To put this in perspective, in October 2019 Americans paid $4.1 billion in additional taxes because of the tariffs put into place by the Trump Administration. Under Phase One, American businesses and consumers would still have paid $3.4 billion in tariffs, or just 17 percent less than before. That leaves 83 percent of the tariff costs still in effect. 

And from the initial glance at the deal, it doesn’t look like Phase One will address many of China’s structural changes that started the trade war. As Bloomberg’s Shawn Donnan wrote in yesterday’s Terms of Trade:“The text won’t be available until next month at the earliest. But it does appear that, when it comes to structural reforms, two years of economic warfare managed to extract little more than a codification of existing commitments by the Chinese.”
Phase One Doesn’t Undo the Economic Damage Caused by the Trade War

After manufacturing contracted for the fourth month in a row, Timothy Fiore, Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee said: 
“Global trade remains the most significant cross-industry issue.”

As reported in The Hill, tariffs continue to threaten American jobs.
“President Trump’s trade war is putting 1.5 million U.S. jobs at risk, according to a study commissioned by the Port of Los Angeles, the nation’s largest container port. ‘Very simply put, less cargo means less jobs,’ said the port’s Executive Director Gene Seroka at a Washington, D.C., press conference.”

An unfortunate example of this comes out of Sharon, Pennsylvania. 
“In spite of her efforts, Never Enough Yarn has become a casualty in the international trade war. Infante said she’s closing her Sharon shop mainly due to tariffs slapped on Chinese yarn.”

CNBC reported that the trade war with China has resulted in a steep drop in U.S. exports of the product and caused the hardwood industry to cut jobs.
“Workers at Northwest Hardwoods’ mill in Mount Vernon, Washington, don’t have much time left on the job. The mill is set to be shuttered in November, and all 70 jobs gone. The Tacoma, Washington-based company, which is one of the largest producers in North America, is also closing a plant in Virginia, cutting an additional 30 jobs, and is then laying off 30 more at the corporate level.”

Phase One Doesn’t Relieve the Tax Burden on Most American Businesses, Farmers and Consumers

Phase One has done nothing to ease the burden the trade war has created for companies impacted by Lists 1-3, including Misco Speakers that has been impacted by List 3. According to NPR:
“The Misco speaker company in St. Paul, Minn., is celebrating its 70th anniversary this year. But the company’s future is uncertain — a result of the trade war between the U.S. and China.”

The same is true of New Hampshire small business owner Darryl Meattey, who has items on both List 3 and List 4A4 – so he will continue to pay the tariffs. 
“For the last 40 years, I’ve run a cold-weather accessory business in Troy. Our small business generates about $3 million to $5 million in annual sales, and we have anywhere from eight to ten employees. We’re what people would call a real ‘mom and pop shop,’ and it’s owned and operated by us…But tariffs are slowly driving us out of business.”

And as the Wall Street Journal reported on Columbia Sportswear, who has items on Lists 3 and 4A and will also continue to pay the tariffs, is having to raise prices on customers: 
“‘It’s a massive expansion of taxation on American employers and consumers,’ said Peter Bragdon, chief administrative officer of Columbia Sportswear Co., whose firm had many apparel items hit in the latest tranche of tariffs. The company has notified customers that they would have to raise prices on many of those items, he said.”

Phase One Doesn’t Correct the Uncertainty the Trade War Continues to Cause

recent Reuters report highlighted some of the uncertainty created by the trade war and the tariffs that were already in place – and will remain in place under Phase One. Win Cramer, the president of JLab Audio summed it up succinctly:
“The uncertainty makes it nearly impossible to make mid- to long-term business decisions. We have to make really short-term decisions almost week by week by week, because that’s how quickly it’s changing.”

Dan Digre, an American speaker manufacturer in Minnesota outlined how the uncertainty is stifling growth. 
“It just seems wrong. We’re not creating anything new. We’re spending all this time and money trying to deal with a problem that’s more or less self-inflicted.”

Steve Lamar, the executive vice president of the American Apparel & Footwear Association, whose members will continue to pay additional taxes because of tariffs under Phase One, explained how this uncertainty hurts his industry:
“We are drowning in uncertainty. This guessing game is chilling investment, putting hiring plans on hold, and sowing sourcing chaos throughout our industry.”

Phase One Doesn’t Reverse or Halt the Significant Damage Done to 2020 Swing States

In Ohio, businesses and farmers are paying huge sums of additional taxes each month
“From the start of the trade war in February 2018 to July 2019, Ohio paid over $1 billion in tariffs — and you can thank the president for that. On top of that, Ohio’s farmers and small businesses have faced $599 million in retaliatory tariffs from China, making it harder for them to sell their goods there.”

Adam Schweers, a small-business owner and former Mayor of Carroll, Iowais also feeling the sting of tariffs: 
“Iowans have paid $186 million in additional tariffs since this back-and-forth with China started back in February of last year. Even more concerning, we’ve faced $386 million in retaliatory tariffs – or tariffs China has slapped on American exports to their country – which has significantly hurt Iowa farmers. Farmer bankruptcies are on the rise and exports are on the decline. That spells bad news for Iowa’s economy long-term.”
 Angela Carr, co-founder of Turbie Twist, which is headquartered outside Pittsburgh, Pennsylvania, recently told POLITICO the tariffs are making her reconsider her decision to vote for President Trump in 2020.“It would break my heart to have to make a change, but this is my livelihood. I have to make choices that are best for my family and the families of our team.”

Decision to Cancel Additional Tariffs and Reduce Some Current Tariffs a Small Step Forward, But More Must be Done to Remove All Tariffs

WASHINGTON, December 12, 2019 – Today, the Trump administration announced that a Phase One deal has been reached. As a part of this deal, the United States will cancel a 15 percent tariff on additional goods imported from China that were expected to go into effect on December 15th. In addition, the administration announced the Phase One deal would cut some of the tariffs that are already in place. While the items on Lists 1-3 would stay at 25 percent, the items on List 4A would be reduced from 15 percent to 7.5 percent. Americans for Free Trade, a coalition of more than 150 associations from every sector of the economy that are united in the fight against tariffs, released the following statement from spokesperson Jonathan Gold in response to today’s announcement.

“The decision to cancel the List 4B tariffs and the announcement that the Phase One deal will cut some tariffs already in place is a small step forward. However, the tariffs still in place are a tax that Americans – and not China – continue to pay, to the tune of tens of billions of dollars. And by only reducing the tariffs on a few items, the administration is picking winners and losers in this trade war. In the month of October alone, Americans paid almost $2.7 billion in additional taxes because of the tariffs on Lists One through Three. That’s why we urge the administration to continue to work diligently to come to a final agreement with China that will remove all of the tariffs currently in place.”

BACKGROUND

Americans Have Paid An Additional $42 Billion In Tariffs From The Start Of The Trade War In February 2018 Through October 2019, Including An Additional $4 Billion In October Alone. (“Trade War Has Cost Americans Additional $42 Billion, Including $4 Billion in October Alone,” Tariffs Hurt the Heartland, 11/6/19)

In The Month Of October Alone, American Businesses, Farmers and Consumers Paid Almost $2.7 Billion In Additional Taxes Because Of Tariffs On Lists One Through Three. (“Trade War Has Cost Americans Additional $42 Billion, Including $4 Billion in October Alone,” Tariffs Hurt the Heartland, 11/6/19)

“Job Growth Is Slowing This Year…In Part Because Of The Nearly 16-Month Trade War Between The United States And China.” “Job growth is slowing this year, averaging 167,000 per month compared with an average monthly gain of 223,000 in 2018, in part because of the nearly 16-month trade war between the United States and China, which has undermined business investment.” (Lucia Mutikani, “U.S. October job growth beats expectations despite GM strike,” Reuters, 11/1/19)

Small Business Owner In New Hampshire: “Tariffs Are Slowly Driving Us Out Of Business.” “For the last 40 years, I’ve run a cold-weather accessory business in Troy. Our small business generates about $3 million to $5 million in annual sales, and we have anywhere from eight to ten employees…And we sell our products to some of the biggest stores in the country, like Saks 5th Avenue, Bloomingdale’s and Lord & Taylor. But tariffs are slowly driving us out of business.” (Darryl Meattey, “Tariffs Are Slowly Driving Me Out of Business,” The Concord Monitor, 11/25/19)China’s Retaliatory Tariffs Caused One Georgia Lumber Business to Lose Almost $900,000 A Month In Exports. “Breaking up with China cost Jim Howard a sizable chunk of his business. The split wasn’t by choice, but triggered by government policy. His Mableton business, AHC Hardwood Group, had grown its exports of fine hardwoods to China to about $1 million a month. That crashed to less than $100,000 after China slapped tariffs of 5% to 25% on American wood in 2018 in retaliation for President Donald Trump’s tariffs on $360 billion of Chinese goods.” (Christopher Quinn, “Georgia’s towering wood industry whipsawed by U.S. trade war with China,” The Atlanta Journal Constitution, 11/191/9)

Americans for Free Trade Encourages Trump Administration to Suspend Implementation of December 15th Tariffs

WASHINGTON, D.C. — Today, Americans for Free Trade, a coalition of more than 150 associations from every sector of the economy that are united in the fight against tariffs, sent a letter to President Trump and strongly encouraged the Administration to suspend implementation of the Tranche 4B tariffs set to take effect on December 15th if a Phase One deal is not finalized before then. 

“We think it is incredibly important for the ongoing negotiations to be allowed to continue without the specter of new tariffs taking effect before a deal is signed,” the Americans for Free Trade coalition wrote. “As you noted when the Tranche 4B tariffs were announced, you delayed implementation of those tariffs specifically to avoid harming American consumers over the holidays. This delay should be extended until a deal is reached.”

The coalition also called for the elimination of existing tariffs as part of the Phase One deal. Since the trade war began, Americans have paid an additional $42 billion in tariffs, according to Tariffs Hurt the Heartland. In addition, American businesses and farmers have faced $12 billion in retaliatory tariffs. 

“Further, we strongly support using the Phase One deal to include reciprocal elimination of existing tariffs, as has been reported in the press,” the Americans for Free Trade coalition wrote. “Such an action would send an important economic signal while providing immediate relief to job creators throughout the U.S.”

A copy of the letter can be found here.

American Manufacturing Continues to Suffer Because of Tariffs, the Trade War

WASHINGTON, December 2, 2019 – For the fourth straight month, the U.S. manufacturing industry has contracted and experts agree that the trade war and tariffs are the primary culprit for this continued weakness. Americans for Free Trade, a coalition of more than 150 associations from every sector of the economy that are united in the fight against tariffs, released the following statement from spokesperson Jonathan Gold in response to today’s ISM Manufacturing Report

“It’s no secret the trade war is doing significant damage to American manufacturing. Today’s report is more proof that we need both sides to come together and agree to a final deal as quickly as possible that ends the trade war and lifts these tariffs that are hurting American manufacturers, businesses and workers.”
 

BACKGROUND

Institute For Supply Management Chairman Timothy Fiore: “Global Trade Remains The Most Significant Cross-Industry Issue.” (November 2019 Manufacturing ISM Report on Business, Institute for Supply Management, 12/2/19)

Manufacturing Dropped In November. “The November PMI® registered 48.1 percent, a decrease of 0.2 percentage point from the October reading of 48.3 percent. The New Orders Index registered 47.2 percent, a decrease of 1.9 percentage points from the October reading of 49.1 percent.” (November 2019 Manufacturing ISM Report on Business, Institute for Supply Management, 12/2/19)

Manufacturing Constricted For The Fourth Month In A Row In November. “November was the fourth consecutive month of PMI® contraction, at a faster rate compared to the prior month. Demand contracted, with the New Orders Index contracting faster, the Customers’ Inventories Index remaining at ‘too low’ levels and the Backlog of Orders Index contracting for the seventh straight month (and at a faster rate). The New Export Orders Index returned to contraction territory, likely contributing to the faster contraction of the New Orders Index.” (November 2019 Manufacturing ISM Report on Business, Institute for Supply Management, 12/2/19)

“Manufacturers Have Borne The Brunt Of The U.S. Trade War With China.” “Big picture: Manufacturers have borne the brunt of the U.S. trade war with China. The dispute between the world’s two largest economies have disrupted global supply chains and contributed to a broader global slowdown.” (Jeffry Bartash, “U.S. manufacturers still suffering from China trade fight, tepid global economy, ISM finds,” MarketWatch, 11/1/19)

“Job Growth Is Slowing This Year…In Part Because Of The Nearly 16-Month Trade War Between The United States And China.” “Job growth is slowing this year, averaging 167,000 per month compared with an average monthly gain of 223,000 in 2018, in part because of the nearly 16-month trade war between the United States and China, which has undermined business investment.” (Lucia Mutikani, “U.S. October job growth beats expectations despite GM strike,” Reuters, 11/1/19)

Mark Zandi, Chief Economist At Moody’s Analytics: “President Trump’s Trade War Is Doing Significant Damage To The Economy.” (Martin Crutsinger, “US economy grows at modest 1.9% rate in third quarter,” Associated Press, 10/30/19)

Diane Swonk, Chief Economist At Grant Thornton: Uncertainty Created By Tariffs “One Of The Biggest Weights On The US Economy.” “Businesses don’t know where to place their bets and don’t know where to invest when they don’t know where the next tariffs are going to come from. That’s been one of the biggest weights on the U.S. economy.” (Scott Horsley, “As Growth Slows, The Economy Is Falling Short Of Trump’s Target,” WGBH, 10/30/19)

Economists Predict Trade War “Will Shave About A Half-Percentage Point From Already Slower GDP Figure.” “Growth last year was boosted by Trump’s $1.5 billion tax cut passed in 2017 and billions of dollars in extra government spending approved last year. Without that support, economists had forecast a slowdown this year. They also say that Trump’s trade war with China, by disrupting supply chains and hurting business confidence, will shave about a half-percentage point from the already slower GDP figure.” (Martin Crutsinger, “US economy grows at modest 1.9% rate in third quarter,” Associated Press, 10/30/19)

Americans for Free Trade: If We Truly Want to ‘Win’ the Trade War, We Need a Deal to Remove All Tariffs

WASHINGTON, November 12, 2019 – Americans for Free Trade, a coalition of more than 150 associations from every sector of the economy that are united in the fight against tariffs, released the following statement from spokesperson Jonathan Gold in response to President Trump’s speech today on trade policy.

“Let’s be clear: Americans, and not China are paying these tariffs. They are a $38 billion tax on American businesses, consumers and farmers. Economists, analysts and experts across the board agree the tariffs are hurting the economy: the manufacturing industry slowed for the third month in a row in October; farm bankruptcies are on the rise; and business investment contracted for the second quarter in a row. If we truly want to ‘win’ the trade war, we need to come to a final deal with China that removes all tariffs.” 
 

BACKGROUND

From The Start Of The Trade War In February 2018 Through September 2019, Americans Have Paid An Additional $38 Billion In Taxes Because Of Tariffs And Have Faced $10.6 Billion In Retaliatory Tariffs. (“Trade War Has Cost Americans Additional $38 Billion, Including $4.1 Billion in September Alone,” Tariffs Hurt the Heartland, 11/6/19)

As Of September, Trade War Has Killed 300,000 Jobs. “Forecasting firm Moody’s Analytics estimates that Trump’s trade war with China has already reduced U.S. employment by 300,000 jobs, compared with likely employment levels absent the trade war. That’s a combination of jobs eliminated by firms struggling with tariffs and other elements of the trade war, and jobs that would have been created but haven’t because of reduced economic activity.” (Rick Newman, “Trump’s trade war has killed 300,000 jobs,” Yahoo! Finance, 9/10/19)

ISM Chairman Timothy Fiore On October Manufacturing Numbers: “Global Trade Remains The Most Significant Cross-industry Issue.” (“October 2019 Manufacturing ISM® Report On Business®,” Institute for Supply Management, 11/1/19) 

“A Gauge Of U.S. Manufacturing Showed The Sector Continued To Contract In October, The Third Straight Month Of Slowdown Amid Global Trade Uncertainties.” (Yun Li, “US manufacturing contracts for a third straight month,” CNBC, 11/1/19)

“Job Growth Is Slowing This Year…In Part Because Of The Nearly 16-Month Trade War Between The United States And China.” “Job growth is slowing this year, averaging 167,000 per month compared with an average monthly gain of 223,000 in 2018, in part because of the nearly 16-month trade war between the United States and China, which has undermined business investment.” (Lucia Mutikani, “U.S. October job growth beats expectations despite GM strike,” Reuters, 11/1/19)

“The Trump Administration’s Trade War With China Has Eroded Business Confidence, Contributing To The Second Straight Quarterly Contraction In Business Investment.” (Lucia Mutikani, “Consumers support U.S. economy as business spending slumps,” Reuters, 10/30/19)

Farmer Bankruptcies Have Risen In Almost Every Region. “The Farm Bureau report showed that farmer bankruptcies had risen in every region of the U.S. for the year ending in June except for the Southwest. Wisconsin, Kansas and Minnesota led the nation in Chapter 12 filings; bankruptcy filings in Kansas and Minnesota increased so significantly in the past year that they reached the highest levels of the past decade.” (Chuck Jones, “Amid Trump Tariffs, Farm Bankruptcies And Suicides Rise,” Forbes, 8/30/19)

The Trade Deficit Has Widened Because Of The Trade War – Not Shrank. “The trade deficit, which has widened as Chinese retaliatory tariffs have hurt farm sales, trimmed GDP growth by about 0.1 percentage-point in the third quarter.” (Martin Crutsinger, “US economy grows at modest 1.9% rate in third quarter,” Associated Press, 10/30/19)

Yarn Store In Sharon, Pennsylvania Forced To Shut Down Because Of Tariffs: “The Tariffs Pushed Me Over The Cliff.” “During the last few years, Carla Infante has had to deal with challenges, including the rise of online retailing, to keep Never Enough Yarn, her shop in downtown Sharon, in business. In spite of her efforts, Never Enough Yarn has become a casualty in the international trade war. Infante said she’s closing her Sharon shop mainly due to tariffs slapped on Chinese yarn. A sale is now underway at the store and Infante expects to remain open through mid-December. ‘The internet got me to the edge of the cliff,’ Infante said. ‘The tariffs pushed me off the cliff.” (Michael Roknick, “Never Enough Yarn owner blames tariffs for store’s demise” The Sharon Herald, 10/19/19)

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Manufacturing Remains Low for the Third Month in a Row on Trade Worries, Uncertainties

WASHINGTON, November 1, 2019 – Americans for Free Trade, a coalition of more than 150 associations from every sector of the economy that are united in the fight against tariffs, released the following statement from spokesperson Jonathan Gold on the latest Institute for Supply Management’s closely watched manufacturing index report. In response to today’s report, ISM Chairman Timothy Fiore stated, “Global trade remains the most significant cross-industry issue.”

“We’ve seen yet another troubling manufacturing report, making it clear the trade war is damaging the industry – and breaking President Trump’s promise to restore the manufacturing industry. Today’s news makes it more important than ever that the administration quickly finalize the Phase One deal with China, and then immediately begin to work toward a final deal that ends the trade war and removes all tariffs.” 

BACKGROUND

In September, Manufacturing Declines For Second Month In A Row To Lowest Level In Ten Years. “In the surest sign yet that the trade war is hurting the American economy, manufacturing activity contracted for the second month in a row in September, falling to a level not seen in 10 years.” (Anneken Tappe, “America’s factories just suffered their worst month in a decade,” CNN Business, 10/01/19)

“The U.S. Manufacturing Purchasing Managers’ Index From The Institute For Supply Management Came In At 47.8% In September, The Lowest Since June 2009, Marking The Second Consecutive Month Of Contraction.” (Yun Li, “US manufacturing survey shows worst reading in a decade,” CNBC, 10/1/19)

“The New Export Orders Index Was Only 41%, The Lowest Level Since March 2009, Down From The August Reading Of 43.3%, ISM Data Showed.” (Yun Li, “US manufacturing survey shows worst reading in a decade,” CNBC, 10/1/19)

Manufacturing Exports Have “Plummeted” Due To Trade War. “A survey of manufacturers on Tuesday showed a measure of export orders received by factories plummeted in August to the lowest level since April 2009.” (Lucia Mutikani, “U.S. trade deficit shrinks, gap with China remains elevated,” Reuters, 9/4/19)

Then Candidate Trump Made “A Pledge To Restore Manufacturing In The United States.” “’My plan includes a pledge to restore manufacturing in the United States,’ Trump said in a campaign rally in Detroit, Mich., on Oct. 31, 2016.” (Manuela Tobias, “Upticks in manufacturing employment, little policy progress,” PolitiFact, 12/27/17)

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