U.S. manufacturing is once again in the news. New data shows America’s factories adding 261,000 jobs from January 2018 to January 2019. In the State of the Union, President Trump emphasized the urgency of confronting predatory trade from countries like China.
There’s no doubt that America’s manufacturers are currently rebounding. The tariffs that President Trump imposed a year ago on steel, aluminum, solar panels and washing machines have already created more than 11,000 new jobs.
Even U.S. car companies are doing well at home. Ford’s North American operations posted a $2 billion profit in the fourth quarter, while GM’s North American net income topped $3 billion. Major steel consumers like Caterpillar and United Technologies have also reported strong results for 2018.
Despite this, critics of the tariffs still abound, particularly among large retailers claiming the tariffs will necessarily lead to price increases.
But that’s not what’s happening. Prices for new cars — which contain plenty of steel — remain steady. And the price of aluminum-canned beer is also rising at less than the rate of inflation.
America’s consumers simply aren’t seeing any major price increases from the tariffs, and core inflation has remained low at 2.2 percent. But industrial users of steel and aluminum haven’t seen price jumps either.
After a short-term increase in the summer, steel prices have actually fallen back to the levels of last January and February — before the tariffs even took effect. And federal data shows the Producer Price Index rising a cumulative 2.5 percent in 2018, exactly the same as it did in 2017.
U.S. industrial production has continued to climb throughout 2018, though, including a 7.8 percent increase in one of the heaviest metal-using sectors, motor vehicle and parts manufacturing.
(Excerpt) Read more at thehill.com ...
