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)