Re: PING! Michael

fos@sdf.org wrote:

On 2024-11-21, Dave Smith <adavid.smith@sympatico.ca> wrote:

On 2024-11-21 8:11 a.m., Janet wrote:

In article
<e54d34316d00ed7fb6b500ed6b2e481e@www.novabbs.com>,

 

Nearest to me is in North Carolina.  I honestly thought
they were in Europe only.

 

    We're all deeply invested in supporting your butter
needs, Joan. Tragically, Trump's import tarriffs are going
to spoil it.

 

I get a kick out of the way so many people think that tariffs will
improve things for them. They seem to think the exporters are paying the
tariffs. It's the consumers who end up paying them.

 i'm humored by people who think manufacturing jobs were just eliminated
and shipped overseas. automation has done far more to reduce the number
of jobs available in manufacturing than the "global economy" has.
 people think that tariffs will encourage companies to bring jobs
back. the types of jobs these low intelligence creatures are
capable of doing would be done largely with automation. that will
result in few low skill jobs, many very high skill ones, and higher
prices to boot.
 

You too are vastly under-educated:
https://prosperousamerica.org/economic-view-tariff-jumping-investment-the-success-of-the-2018-washing-machine-tariffs/
Key Points
The 2018-2023 washing machine tariffs led to a larger, more competitive U.S.-based residential washer industry, including the creation of over 2,000 new jobs at two Korean-owned companies which opened U.S. manufacturing facilities in the southern U.S.
Washing machine prices are now below pre-tariff levels, and prices have risen less than consumer inflation, demonstrating that after a six-month flurry, tariffs had little to no effect on washing machine prices.
The success of the washing machine tariffs shows that “tariff-jumping investment,” i.e. inducing domestic industry growth via tariffs is a viable strategy for the U.S. in industries that have suffered decline.
In January 2018, President Donald Trump imposed tariffs of 20% to 50% on large residential washing machines. The tariffs expired in February 2023. Six years later, we can make an assessment: the tariffs created over 2,000 jobs and provided economic growth for the two communities where Korean appliance makers built factories. They also provided economic support for Whirlpool, the leading U.S.-headquartered appliance maker and employer of 23,000 Americans, as well as GE Appliances, which is today Chinese-owned and employs 16,000 Americans at Louisville, Kentucky and other facilities.
Further, washing machine prices, which temporarily surged in the first half of 2018, came back to earth in 2019 and have continued to rise significantly less than inflation since. Tariff opponents in the media and the academic economist community continue to repeat the falsehood that tariffs raised washing machine prices when over any timeframe other than a few months, tariffs have had no visible impact on washing machine prices.
In 2013, the Obama administration imposed tariffs on imported washing machines from South Korea. This led the Korean producers to shift production for the U.S. market to China, which led to another anti-dumping investigation by the U.S. International Trade Commission. That investigation published a finding in December 2016 that Chinese washing machines benefited from subsidies (“anti-dumping margins” in the formal lingo) of 44.28% and recommended duties at that level. The Trump administration, with U.S. Trade Representative Robert Lighthizer as the driving force, decided instead to impose global duties or tariffs on all imported large residential washing machines, whatever their source. The duties, imposed in January 2018, started at 20% and once the quota of 1.2 million imported washers was reached, rose to 50%.
For years, the two large importers, Samsung and LG Electronics, had opposed any import restrictions. But once those tariffs were in place, the Korean manufacturers quickly changed their tune.
In 2018, LG Electronics completed an investment of $360 million in a new “smart factory” in Clarksville, Tennessee. LG hired 700 employees and began building washing machines there. In April 2021, it announced that it had produced 1 million washing machines at Clarksville. It said it was investing a further $20.5 million and hiring 300 more employees, to bring its Clarksville headcount to “about 1,000.” In December 2022, LG announced three new model washing machines capitalizing on the trend towards energy-efficient and “smart” (i.e. Internet-enabled) appliances. Those new models are all to be made in Clarksville.
Buck Dellinger, CEO of the Clarksville Industrial Development Board, told us that LG Electronics is one of a number of large companies that have chosen to build facilities in the Clarksville industrial park. Clarksville set up the industrial park 22 years ago to build up an industrial base to offer alternative employment in case the nearby Fort Campbell army base reduced its presence in the area. In the last five years, the industrial park has added 4,514 direct jobs, and a total of 7,236 including indirect jobs, Dellinger said. Indirect jobs include suppliers to the companies in the industrial park, and service companies serving employees such as restaurants and convenience stores. In the ten years to 2022, Clarksville’s average salary grew 77%, as compared to the U.S. growth rate of 62%. With 177,000 residents, Clarksville is adding population at over 3% a year and is now Tennessee’s fifth largest city, right behind Chattanooga.
“We’re ecstatic to have LG Electronics in the region,” said Buck Dellinger. “Advanced manufacturing helps to give us low unemployment, a high workforce participation rate, and a young workforce.” Dellinger recently returned from a trip to South Korea where he met with LG executives. “They are a very stable company, and take good care of their employees. They have enough land here to quadruple their operation and we hope they do.”
It’s a similar story in Newberry, South Carolina, where Samsung built an appliance facility in 2018. In 2017, recognizing that the Trump administration was determined to clamp down on washer imports, Samsung announced plans to invest $350 million to build a manufacturing facility in Newberry, South Carolina with 1,000 employees. In 2020, Samsung invested an additional $120 million to expand the facility, which now employs 1,200.
Newberry is a smaller, more rural and agricultural area than Clarksville. Located 40 miles northwest of Columbia, Newberry County’s population is just 38,000. Samsung is one of only two manufacturers in the county with more than 1,000 employees. The other is a food processing company. As a relatively high-tech appliance manufacturer that designs as well as manufactures products, Samsung has had a significant impact on business, jobs, and prosperity in Newberry County. According to a local news report last October, the “Samsung effect” in Newberry has contributed to investment in new housing developments, new restaurants and other new businesses in the area. The report quoted John Worthington, Executive Chef at local restaurant Figaro the Dining Room, who said: “with these bigger corporations like Samsung coming in, they’re bringing in good-paying jobs which makes the economy and the town better.” Figaro is currently advertising for employees.
Consumer Prices
The greatest myth about tariffs is that they lead directly to a one-for-one increase in consumer prices of the tariffed goods. The price effect of tariffs depends on the competitive dynamics of the industry that is tariffed, the weight of the level of imports in domestic consumption, and other variables. The U.S. International Trade Commission found in a detailed study published last year that across a range of industries, the various tariffs imposed by the Trump administration led to price increases in the domestic market for the tariffed goods worth between 10% and 20% of the headline rate of tariff. In other words, a 25% tariff would lead to U.S. price increases in the tariffed sector of between 2.5% to 5%. We summarized that study’s findings here.
The market reactions to the 2018 tariffs on residential washers was typical of another trend often observed after tariff imposition. In early 2018, washing machine prices shot up as the market, fearing high prices and potential shortages, sought to build up inventories. Between January 2018, when the tariffs were imposed, and June, the Bureau of Labor Statistics’ price index for laundry equipment rose by 12.4%, a large jump. However in the next 14 months, the index tumbled by 10.7%, until it was at almost the same level (91.1) as it was in January 2018. In short, sanity returned to the market, and all participants, from the manufacturers to the distributors to the retailers, saw that the tariffs would have almost no effect on the U.S. retail price for washers.
...
The goal of industrial policies like targeted tariffs should be to build domestic industries to create growth, investment, employment, and an upward trend in worker incomes. Of the two major domestic manufacturers, Whirlpool recently reported modest (1%-2%) growth in its domestic market and is exiting foreign markets. In recent reports it stressed to investors that its goal is to rein in costs to achieve 10% earnings margins.  (As a subsidiary of a Chinese multinational, GE Appliance reports no financial figures, making it hard to judge its economic performance.) It would not be surprising if either of these companies reduced staffing levels in the coming years. But employment count is not the critical metric. It’s more critical to have enough companies and competition so the more successful companies are creating jobs even if others are losing, and the industry as a whole remains healthy. That has positive effects for the upstream and downstream industries that supply the appliance industry and for the economy as a whole.