Dealing With China II

Author: R. Alan Harrop, Ph.D

Question: Is China an ally, adversary, or enemy? The answer to this question should define how we interact with them. Clearly, China is not an ally. An adversary is one who acts in ways opposed to another’s interests. An enemy, is one who is seeking to injure, harm or overthrow another country. Let’s look at some facts.

China has stated that their intention is to replace our position in the world by weakening us and is committed to expanding their military and replacing the dollar as world currency with their yuan in order to do so. They are also enabling the smuggling of deadly fentanyl into our country which kills 100,000 of our youth each year. They steal our technology, ignore our patents and copyrights, and use deceptive trade practices. They recently sent a spy balloon over our country which the inept Biden regime failed to shoot down or take retaliatory action. They produced a deadly virus that killed millions throughout the world including thousands in the United States. They are sending thousands of their citizens over our border illegally. Currently there are over 350.000 Chinese students attending our universities, many of which have been caught spying for China. Also, China is apparently giving millions of dollars to the family of president Biden to control his decision making.

How do you think China would respond if we were doing these things to them? It is no wonder that they see us as weak, in decline, and ready for take over. The question, now that we recognize China as an enemy, is what action to we take to protect ourselves? First, elect a non-compromised president who has the courage to face the threat that China presents. Second, eliminate our dependency on China for essential manufacturing products and importantly, essential pharmaceuticals. Third, expel all Chinese in our universities. Fourth, impose draconian tariffs on all Chinese products until their enabling of fentanyl smuggling over our border is stopped. Fifth, prohibit the sale of any land or food processing companies.in our country to China.

These actions may seem extreme to some. However, history is replete with countries who were destroyed by not recognizing external threats. It is time to recognize reality and take appropriate action before it is too late.

How Safe Is The Manufacturing Of The Vaccine?

On Sunday (updated Monday), The Epoch Times posted an article about manufacturing violations in the production of the Moderna Covid-19 vaccine.

The article reports:

U.S. Food and Drug Administration (FDA) inspectors uncovered problems at a Moderna plant used to manufacture a substance that is part of the company’s COVID-19 vaccine, according to a newly released document.

Moderna failed to meet multiple requirements, including rules aimed at minimizing the potential for contamination, according to the document.

FDA inspectors performed inspections at the plant in Norwood, Massachusetts from, Sept. 11 to Sept. 21, visiting nine times in total.

They found that equipment used to manufacture the substance was not cleaned properly before usage, that a mock cleaning done for manufacturing did not adequately simulate the actual process, that written alarm procedures were not followed, and that neither the equipment nor the plant were designed in a way that would make contamination less likely.

Inspectors also learned that Moderna used materials beyond their expiration date.

“There are more than two thousand expired items stored in your … warehouse and cold storage at time of inspection,” Unnee Ranjan, the FDA’s lead investigator, wrote in a summary of the inspections.

The article concludes:

Another part of the FDA report, dated Sept. 21, described how the Norwood facility did not have adequately designed air handling systems to “assure appropriate air quality in the … cleanroom in which the mRNA drug substance is manufactured.”

Inspectors also said they found positive air pressure was not “consistently maintained” between cleanrooms and airlocks and that monitoring data showed the cleanroom pressure turned negative between January and September. That development was “not assessed for potential impact,” they said.

“At face value, it appears multiple controls designed to prevent contamination were deficient,” Mr. Lynn said.

Another recently released document, produced by the nonprofit Informed Consent Action Network on orders from a federal judge, showed the FDA detected in Andover, Massachusetts, issues with the manufacture of a substance used in the Pfizer-BioNTech vaccine. Pfizer said in response it had taken actions to correct the issues.

The government is still putting ads up on television encouraging Americans to take the vaccine, even after there have been numerous reports of serious side effects. Now we find out there are manufacturing problems also? It’s time for the Covid vaccine to go away.

 

 

Policies Have Consequences

Recently, The Epoch Times posted an article about the village of Ilion, New York. For two centuries, Ilion has been the home of a Remington Arms Co. manufacturing plant.

The article reports:

In the village of Ilion, New York, 80 miles west of the state capital in Albany, residents are mourning the departure of gunmaker Remington Arms Co. after two centuries of continuous operation.

Without fanfare, the company announced last month that the manufacturing plant would be closing its doors on March 4, 2024.

“I feel like a family member has died,” Ilion Mayor John Stephens told The Epoch Times. “My dad raised four kids on a paycheck from there for 37 years. He walked to work and carried his lunch every day.”

Mr. Stephens said no one expected the announcement a week after Thanksgiving that the plant was set to close.

On Nov. 30, at 3:26 p.m., the company notified village officials of the decision by email. The message noted that “all separations” with the village would be completed by March 18, 2024.

Likewise, the company notified its 270 employees that they would soon be out of a job.

The article notes:

Publicly, the company attributed the plant closure in part to a hostile political climate in Albany regarding firearms production.

“I am writing to inform you that RemArms LLC has decided to close its entire operation at 14 Hoefler Avenue, NY 13357,” Remington Arms said in a letter to employees. “The company expects that operations at the Ilion facility will conclude on or about March 4, 2024.”

The Georgia-based company said it would continue to make firearms at its facility in Huntsville, Alabama, which opened in 2014, a year after New York’s passage of the Safe Act, which created stricter gun laws.

The anti-gun political climate in Democrat-controlled Massachusetts prompted competitor Smith & Wesson to move from its longtime base in Springfield to Maryville, Tennessee. The company announced the opening of its new headquarters there in October.

The article notes that the town has been losing population in recent years:

Until recently, Remington Arms employed about 1,500 workers, whose wages helped support the local retail economy, said village public historian Mike Disotelle.

“At noontime, when the employees would go to lunch, there would be a flood of factory employees going to local businesses,” he said.

Mr. Disotelle said Remington Arms was one of the village’s largest employers and a centerpiece of the downtown economy. This remained true even as the village continued to lose residents over the course of several decades, he said.

In 1960, the village had 10,000 residents. Today, that number is down to about 7,700 and could drop below 6,500 by 2030 due to the slow economy, high taxes, and limited housing availability, Mr. Disotelle said.

The northeast is losing its luster because of high taxes, limited housing, and the high cost of living. There is an exodus from blue states to red states. We just need to remind people not to bring their blue politics into red states.

Good Economic News

The Epoch Times reported the following yesterday:

Manufacturing in the United States, as measured by a key business activity gauge, surged to a 15-month high in July, exceeding economists’ expectations.

The Institute for Supply Management (ISM) business survey, published Aug. 3, shows that its topline manufacturing activity indicator, called the Purchasing Managers’ Index (PMI), surged to a reading of 54.2 in July.

Readings above 50 indicate expansion, while those below mean contraction.

“The PMI signaled a continued rebuilding of economic activity in July and reached its highest level of expansion since March 2019,” Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee, said in a statement (pdf).

Economists polled by Reuters predicted the manufacturing index would rise to 53.6 in July, so the higher-than-expected number is encouraging, particularly in light of April’s 11-year low of 41.5.

Why is it that when a Republican is the President, good economic news always exceeds expectations?

The article also notes:

Another manufacturing sector gauge tapped by ISM in the survey is the New Orders measure, which soared to 61.5, up 5.1 percentage points from June.

“Orders starting to pick up. [An] increase of about 35 percent to 40 percent,” a chemical product manufacturing executive said.

“Incoming orders are slow. This is usually our busiest time of the year, but production is reduced due to lack of demand. Additional layoffs expected,” an executive at a furniture maker said.

Another gauge, the production index, showed 4.8 percentage point growth from June to July, coming in at 62.1, the highest reading of all the ISM gauges.

“Manufacturing outlook has improved greatly in June, as business has resumed at nearly 100 percent. We have implemented a number of safeguards that are costing extra money, but we are running,” an executive at a computer and electronics products maker said.

There was also some negative news included in the article, but considering the fact that the country has been locked down or in semi-lockdown since March, that is not surprising. The two-week shutdown has extended far past where it was scheduled to be. I would also like to note that the purpose of the lockdown was to avoid overwhelming our hospitals. Now we are in semi-lockdown to avoid the spread of the disease. There is significant information that this is not the best course of action (see article here), so why are we still in semi-lockdown? Why are churches limited in the amount of people they can allow in their buildings when the John Lewis funeral was packed? Why was there an exception to the quarantine rule for the people who attended the John Lewis funeral? Has the damage from the lockdown now exceeded the possible damage from the disease?

Good News

It always amazes me that good economic news is always ‘unexpected’ when a Republican is in the White House. Well, last month’s economic news also fits that pattern. Breitbart reported yesterday that factory activity in the U.S. surged higher than expected in June. That always makes me wonder who expected what.

The article reports:

The Institute for Supply Management’s index of manufacturing activity jumped 9.5 percentage points to 52.6 in June. The gauge of new orders rose 24.6 points to 56.4, the largest ever monthly increase. The production component of the index also rose by more than 24 points to 57.3.

…Economists had expected a reading of 49, with the highest estimate in those surveyed by Econoday 51.5. June’s score was the best since April of 2019.

“The manufacturing sector is reversing the heavy contraction of April, with the PMI increasing month-over-month at a rate not seen since August 1980, with several other indexes also posting gains not seen in modern times,” ISM’s Timothy Fiore said in a statement.

The article further reports:

“US manufacturers have reported a marked turnaround in business conditions through the second quarter, with collapsing production and demand in April at the height of the COVID-19 lockdown turning rapidly to stabilisation by June. The PMI posted a record 10-point rise in June amid unprecedented gains in the survey’s output, employment and order book gauges,” Chris Williamson, Chief Business Economist at IHS Markit, said.

Williamson said:

“The record rise in the New Orders Index, coupled with low inventory holdings, bodes well for a further improvement in production momentum in July. A record upturn in business sentiment about the year ahead likewise hints that business spending and employment will start to revive. However, while the PMI currently points to a strong v-shaped recovery, concerns have risen that momentum could be lost if rising numbers of virus infections lead to renewed restrictions and cause demand to weaken again.”

The Bureau of Labor Statistics also reported that the workforce participation rate for June was 61.5, up from 60.8 in May. In February the workforce participation rate was 63.4, so we have a ways to go to get back to where we were before the coronavirus shutdown.

Great News For America

Energy independence is wonderful, but in today’s technology age, there are other important areas where America needs to be self-sustaining. One of the them is the rare earth minerals used in the manufacture of our technology. On Wednesday (updated yesterday) The Epoch Times posted an article about one step that has been taken in this direction.

The article reports:

Owners of the Wheat Ridge facility for processing rare earth elements and critical minerals have received an operating permit that will enable minerals critical to advanced technology manufacturing to be mined and processed in the United States.

USA Rare Earth, LLC, and Texas Mineral Resources Corp. announced on June 18 that their Wheat Ridge, Colorado, facility has received its operating permit, with its pilot plant now in the commissioning process.

Texas Mineral said in a press release that the plant “will have the ability to produce the full range of high purity, separated rare earths as well as other critical minerals … which are essential for modern manufacturing ranging from defense applications to wind turbines, electric vehicles, smart phones, advanced medical devices, and the physical backbone of emerging 5G networks.”

The company says its objective is “to build the first rare earth and critical minerals processing facility outside China.”

The CEO of USA Rare Earth, Pini Althaus, said in a press release that the establishment of an independent, robust, and domestic rare earth metal and critical mineral supply chain is vital for the United States, “overcoming reliance on China.”

Congress and President Trump have both recognized the need to produce these minerals in America.

The article notes:

Reps. Michael Waltz (R-Fla.) and Paul Gosar (R-Ariz.) introduced legislation (pdf) on May 28 to protect American mineral supply chains.

Gosar described critical minerals as the building blocks of our modern lives, as they are vitally important for special components in defense systems, health care applications, and energy generation technology.

“For years, our country has become increasingly dependent on China and other nations to fulfill our demand for minerals,” said Gosar. “The global pandemic has demonstrated the severe consequences of allowing this longstanding over-reliance on China to go unchecked.”

Waltz said that critical minerals are integral to our way of life.

“As coronavirus has unfortunately demonstrated, if China can threaten to cut off our pharmaceutical supply, they can do the same with their supply of rare earth minerals,” said Waltz. “We need to bring this supply chain back to America—and this bill will be an important step to do that.”

…President Donald Trump issued Executive Order 13817 in December 2017, titled “A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals.” The order directed federal agencies to list critical minerals, develop strategies to reduce reliance on the minerals themselves and on foreign suppliers, and increase domestic production.

The positive impact of the coronavirus is that it reminded us that as a nation we need to be as self-sufficient as possible. It is encouraging to see steps being taken in this direction.

Foreign Interference In Our Government In Plain Sight

PJ Media posted an article yesterday with the following headline, “Dems Block China Investigation Even After Communist Regime Threatens U.S. Senators by Name.” Great. We have another country threatening our Representatives if they do their job.

The article reports:

“Coronavirus Committee Dems won’t let us investigate China’s cover-up,” House Minority Whip Steve Scalise (R-La.) tweeted. “Why? – China’s lies caused global suffering & economic devastation – China undermined our efforts to combat the virus – China is reportedly trying to steal our vaccine research They must be held accountable.”

The article notes:

If Democrats are going to investigate President Trump’s response to the coronavirus crisis, they should also investigate China’s malfeasance. Just last week, Chinese officials threatened “serious consequences” for members of the U.S. House of Representatives and the U.S. Senate, along with two state attorneys general. The officials named Sens. Marsha Blackburn (R-Tenn.), Tom Cotton (R-Ark.), Josh Hawley (R-Mo.), Martha McSally (R-Ariz.), and Rick Scott (R-Fla.), along with Reps. Jim Banks (R-Ind.) and Dan Crenshaw (R-Texas).

“The Chinese government is lashing out at those in the U.S. who are appropriately trying to hold them accountable for intentionally misleading us about the nature of the novel coronavirus, where it was spreading and how quickly things were getting out of control. I consider their threats a badge of honor,” Banks replied.

Attorney General Eric Schmitt (R-Mo.) filed a lawsuit last month demanding tens of billions of dollars in damages due to China’s coronavirus malfeasance, which allegedly violated Missouri law. Attorney General Lynn Fitch (R-Miss.) filed a lawsuit allowing Mississippians to bring claims against China.

We need to remember that the communist government of China is not our friend. They are not anyone’s friend.

The article lists some of the destructive actions of China relating to the coronavirus:

China received 2.4 billion pieces of PPE from other countries. Yet when countries asked China for PPE, the Communist Party extorted them — only sending valuable medical aid if political leaders agreed to publicly praise Beijing. Chinese companies also sent faulty medical gear and coronavirus antibody tests to European countries, and an Associated Press investigation revealed the prevalence of counterfeit masks in America, likely tracing back to a major Chinese factory. Meanwhile, the Communist Party also prevented U.S. companies from shipping their own medical gear back home, where it is sorely needed.

Wuhan was not put under lockdown until January 22-23. On January 26, Wuhan’s mayor admitted that 5 million people had already left the city. Chinese President Xi Jinping said he had “issued requirements for the prevention and control of the new Coronavirus” as early as January 7. He could have acted to shut down Wuhan as early as January 7, two weeks before the city was shut down. A University of Southampton study found that if strict quarantine measures had been introduced three weeks earlier, the coronavirus’s spread would have been reduced by 95 percent.

As the coronavirus spread across the globe, China’s Communist Party put out a video encouraging Italians to hug Chinese people to prove they weren’t racist — while China was lying about the true danger of the virus.

According to the FBI and the Department of Homeland Security, the Chinese Communist Party is also attempting cyber espionage on American attempts to create a coronavirus vaccine and cure. Chinese officials are also refusing to cooperate in the search for the coronavirus’ origins.

It is definitely time to put trade restrictions on China and move American manufacturing out of China. We need to start shopping for ‘made in America’ products.

Recognizing A Long-Standing Problem

The Washington Examiner posted an article today about America’s dependence on Chinese manufacturing for inexpensive products.

The article reports:

American companies that produce essential goods in China should plan to shift their operations back to the United States or other Western countries, according to a senior Republican lawmaker.

“We’re staring into a significant, significant crisis of supply chain,” Colorado Sen. Cory Gardner told the Washington Examiner. “Cheap labor or cheap manufacturing be damned if you are reliant on them for your life and livelihood.”

Gardner’s warning was spurred by the shortage of hospital masks in the United States, a dearth driven by Beijing’s refusal to allow American companies that make the products in China to ship them out of the country amid the coronavirus pandemic. And he’s not alone in that sentiment, raising the possibility that anger over China’s self-interested response to the coronavirus outbreak could produce one of the most dramatic alterations of global economics in decades.

“Because of the coronavirus problem, people are recognizing that any supply chain that has single points of failure is incredibly vulnerable,” the Heritage Foundation’s Dean Cheng, a senior research fellow in the organization’s Asian Studies Center, told the Washington Examiner. “China is going to be very concerned about decoupling, offshoring, [or any] redirection of investments out of China.”

Obviously, the coronavirus has caused American companies to rethink outsourcing manufacturing to China, but the threats by the Chinese government have not helped the situation.

The article notes:

That suspicion of China reflects the degree to which the coronavirus pandemic has exacerbated the tensions between the world’s two largest economies. American officials are angry that Chinese Communist officials censored the early warnings that a new virus had emerged in Wuhan. In response, fuming Chinese diplomats have accused the U.S. Army of starting the pandemic while reminding the West that China controls key parts of the medical supply chain.

“There could be nothing more ham-handed and catastrophic than for the Chinese to talk some more about ‘how the U.S. created coronavirus, and, by the way, maybe we’ll cut off pharmaceuticals,’” Cheng said. “You want to have a situation where there really is that kind of a backlash, where the U.S. actively tries to not only decouple but move specifically away from China? That’s inviting that kind of a backlash.”

America can’t afford to outsource its drug manufacturing to a country that threatens to cut off the supply. It’s time to bring drug manufacturing home and employ American workers.

Some Thoughts On One Long-Term Effect Of The Coronavirus

On March 1, Forbes Magazine posted an article about the long-term impact of the coronavirus. Obviously the article was written before America went on lockdown and the stock market felt the full impact of the epidemic.

The article reports:

The new coronavirus Covid-19 will end up being the final curtain on China’s nearly 30 year role as the world’s leading manufacturer.

“Using China as a hub…that model died this week, I think,” says Vladimir Signorelli, head of Bretton Woods Research, a macro investment research firm.

China’s economy is getting hit much harder by the coronavirus outbreak than markets currently recognize. Wall Street appeared to be the last to realize this last week. The S&P 500 fell over 8%, the worst performing market of all the big coronavirus infected nations. Even Italy, which has over a thousand cases now, did better last week than the U.S.

So who wins as China loses its place as the world’s leading manufacturer?

The article notes:

Yes. It is Mexico’s turn.

Mexico and the U.S. get a long. They are neighbors. Their president Andres Manuel Lopez Obrador wants to oversee a blue collar boom in his country. Trump would like to see that too, especially if it means less Central Americans coming into the U.S. and depressing wages for American blue collar workers.

According to 160 executives who participated in Foley & Lardner LLP’s 2020 International Trade and Trends in Mexico survey, released on February 25, respondents from the manufacturing, automotive and technology sectors said they intended to move business to Mexico from other countries – and they plan on doing so within the next one to five years.

“Our survey shows that a large majority of executives are moving or have moved portions of their operations from another country to Mexico,” says Christopher Swift, Foley partner and litigator in the firm’s Government Enforcement Defense & Investigations Practice.

Swift says the move is due to the trade war and the passing of the USMCA.

The article points out one of the major problems with manufacturing in Mexico:

Safety remains a top issue for foreign businesses in Mexico who have to worry about kidnappings, drug cartels, and personal protection rackets. If Mexico was half as safe as China, it would be a boon for the economy. If it was as safe, Mexico would be the best country in Latin America.

“The repercussions of the trade war are already being felt in Mexico,” says Miralles.

Mexico replaced China as the U.S. leading trading partner. China overtook Mexico only for a short while.

A strong Mexican economy would solve a lot of problems for America if the drug cartels and other illegal activities could be stopped. A strong Mexican economy would provide incentive for migrants from poorer South American countries to remain there and work. It might ebb the flow of illegals into America that burden the American welfare system and negatively impact the wages of Americans on the lower end of the wage scale.

There will always be drawbacks to outsourcing manufacturing to a country that is controlled by a group of tyrants. American companies who scream about civil rights in America have been willing to overlook sweatshops in China. It is time to add the concept of conscience to the corporate decision-making process.

Common Sense Has Entered The Building

On Wednesday The Daily Caller posted an article with the following headline, “‘Buy American’ — White House Confirms Executive Order That Will End Medical Supply Chain Reliance On China.” China is the last country in the world we want to be dependent on for drugs.

The article reports:

White House Director of Trade and Manufacturing Policy Peter Navarro confirmed Wednesday the administration is working on an executive order to eliminate the government’s reliance on foreign-made medical supplies.

The “Buy American” order comes on the heels of concerns expressed by senators during their Tuesday meeting with President Donald Trump on Capitol Hill.

…The order would prevent federal agencies from purchasing medical supplies, including face masks, gloves and ventilators, from China.

As the United States has battled the domestic spread of coronavirus, consumers were alerted to the fact that China manufactures an overwhelming percentage of the federal government’s medical equipment. 90 percent of all U.S. antibiotics were manufactured in China.

China has prevented the export of surgical face masks, severely limiting supplies in the U.S. and countries around the world.

Under the Trump administration, we have gained energy independence. Now it is time to gain pharmaceutical independence.

The Economy Is Strong

No one really knows what impact the coronavirus will have on our economy, but as for now, the February jobs report showed a strong, vibrant, growing economy.

Yahoo News posted details of the report today.

The article reports:

The Labor Department released its February jobs report at 8:30 a.m. ET Friday. Here were the main results from the report, compared to consensus expectations compiled by Bloomberg:

  • Change in non-farm payrolls: +273,000 vs. +175,000 expected and 273,000 in January
  • Unemployment rate: 3.5% vs. 3.6% expected and 3.6% in January
  • Avg. hourly earnings, month on month: +0.3% vs. +0.3% expected and +0.2% in January
  • Avg. hourly earnings, year on year: 3.0% vs. +3.0% expected and 3.1% in January

January’s job gains were upwardly revised to 273,000, from the 225,000 previously reported, and December’s non-farm payroll additions were upwardly revised by 37,000 to 184,000. This brought average job gains over the past three months up to 243,000, or above the average from 2019, when job growth averaged 178,000 per month.

The services sector again led the advance in job gains in February. Within this sector, health-care and social assistance added 56,500 payrolls, accelerating gains from January. Professional and business services also posted strong job gains, adding a net 41,000 positions.

Within the services sector, wholesale trade, retail trade, transportation and warehousing and temporary health services shed jobs in February. Retail posted the largest declines, losing a net 7,000 positions and extending a drop of 5,800 from January.

For the goods-producing sector, manufacturing added jobs for the first time in three months, posting a net 15,000 payroll gains. Construction and mining each also added jobs, underscoring a firming of the goods-producing sector in February after months of weakness relative to services. Employment in construction rose by 42,000 positions for the month after a gain of 49,000 in January, representing the best two-month advance for the industry since March 2018, as unseasonably warm weather and a strengthening housing market helped supported hiring.

The Workforce Participation Rate remained steady at 63.4 percent.

It’s always interesting to me that when the jobs report comes out during a Republican administration, the numbers always seem to be higher than the experts predicted. There will be some impact in March from the coronavirus because of the disruption in the global supply chain the virus has caused, but I believe the economy is strong enough to recover from any glitches that may occur (despite the undisguised wishes of the Democrat party for a serious economic downturn).

The Obvious Is Sometimes Overlooked

On Friday, Frank Gaffney, Jr., posted an article at the Center for Security Policy about America’s dependence on China for the manufacturing of drugs.

The article reports:

Communist China has been waging “unrestricted warfare” against this country for decades. One of its most devastating lines of attack in that war has been the hollowing out of America’s industrial base. 

A stupefying case in point is the Chinese Communist Party’s success in destroying our nation’s capacity to manufacture prescription drugs – to the point where we are virtually completely dependent on China for our medicines. 

A recent poll of likely voters found that 83% were concerned about such a dependency. 76% worried that China may cut off the supply, devastating our health care system and people.

Rosemary Gibson, the co-author of China Rx, has warned about such a scenario for years. Now, in the midst of the coronavirus crisis, it is upon us. We need immediately to heed Ms. Gibson’s call urgently to reconstitute an America First drug manufacturing capability.

We have achieved energy independence which has increased our influence around the world. Now it is time to achieve drug independence.

 

President Trump And His Trade Policies

Yesterday Fox News reported that the US trade deficit has dropped for first time in 6 years because of the taxes President Trump has placed on China.

The article reports:

The U.S. trade deficit fell for the first time in six years in 2019 as President Donald Trump hammered China with import taxes.

The Commerce Department said Wednesday that the gap between what the United States sells and what it buys abroad fell 1.7 percent last year to $616.8 billion. U.S. exports fell 0.1 percent to $2.5 trillion. But imports fell more, slipping 0.4 percent to $3.1 trillion. Imports of crude oil plunged 19.3% to $126.6 billion.

The deficit in the trade of goods with China narrowed last year by 17.6 percent to $345.6 billion. Trump has imposed tariffs on $360 billion worth of Chinese imports in a battle over Beijing’s aggressive drive to challenge American technological dominance. The world’s two biggest economies reached an interim trade deal last month, and Trump dropped plans to extend the tariffs to another $160 billion in Chinese goods.

The article notes:

Overall, the United States posted a $866 billion deficit in the trade of goods such as cars and appliances, down from $887.3 billion in 2018. But it ran a $249.2 billion surplus in the trade of services such as tourism and banking, down from $260 billion in 2018.

America is a nation of consumers, so I suspect trade deficits are something that will always be with us, but as the manufacturing base in America expands and our trade policies become more balanced, I believe we will see lower trade deficits.

The Trump Economy

Newsmax posted an article today about the state of the American economy.

The article reports:

Companies in the U.S. ramped up hiring at the start of the year, taking on the most workers since May 2015 and indicating the labor market remains robust, a report on private payrolls showed Wednesday.

Employment at businesses increased by 291,000 in January after a revised 199,000 gain in the previous month, according to data from the ADP Research Institute.

The article includes the following statistics:

  • The larger-than-expected gain was broad-based and included the biggest advance in service industry payrolls since February 2016, including a record surge in hiring at leisure and hospitality companies in data back to 2002.
  • The report is in line with last week’s statement from Federal Reserve policy makers following their meeting on interest rates. The Fed said that “job gains have been solid, on average, in recent months.”
  • Economists monitor the ADP data for clues about the government’s job report. The Labor Department’s employment data due Friday is expected to show a 150,000 gain in private payrolls and an unemployment rate remaining at a 50-year-low of 3.5%.
  • The government figures will also include annual revisions. In August, the Labor Department’s preliminary benchmark projections showed the number of workers added to payrolls will probably be revised down by 501,000 in the year through March 2019. ADP’s report follows a different methodology than the government’s, and the two do not directly correlate with each other.
  • ADP report showed goods-producing payrolls rose 54,000 in January, while service-provider employment increased 237,000.
  • Hiring in construction jumped 47,000, the most in a year, and manufacturing showed a 10,000 increase in January, which was the biggest gain in 11 months.
  • Payrolls at small businesses increased by 94,000 last month, the most since July 2018; rose 128,000 at medium-sized companies and 69,000 at large firms.
  • ADP’s payroll data represent about 411,000 firms employing nearly 24 million workers in the U.S.

President Trump was mocked during the election campaign for saying he could bring back manufacturing jobs and turn the economy around. His trade agreements have done what other politicians considered impossible. I should note that people who think something is impossible don’t attempt to accomplish it. Maybe we need to elect people who are willing to attempt the impossible rather than those who simply make empty promises.

Economic Indicators In November

One America News is reporting today that U.S. homebuilding increased more than expected in November and permits for future home construction surged to a 12-1/2-year high.

The article reports:

The economy’s near-term prospects were also bolstered by other data on Tuesday showing a strong rebound in manufacturing production in November as the return of formerly striking General Motors’ <GM.N> workers boosted automobile output. The data suggested the economy remained on a moderate growth path in the fourth quarter despite slowing consumer spending.

…In a separate report on Tuesday, the Fed said manufacturing production rose 1.1% last month after dropping 0.7% in October. Excluding motor vehicles and parts, manufacturing output increased 0.3%.

The rebound in manufacturing production suggests the factory downturn is probably close to running its course. Manufacturing output is still expected to contract in the fourth quarter.

“This is a welcome shift after declines in three out of the four preceding months, but not the end of the struggles for manufacturing,” said Tim Quinlan, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

Single-family homebuilding, which accounts for the largest share of the housing market, increased 2.4% to a rate of 938,000 units in November, the highest level since January. Single-family housing starts rose in the West and Northeast, but fell in the Midwest and the South.

Single-family housing building permits rose 0.8% to a rate of 918,000 units in November, the highest since July 2007.

Starts for the volatile multi-family housing segment jumped 4.9% to a rate of 427,000 units last month. Permits for the construction of multi-family homes rose 2.5% to a rate of 564,000 units.

The economy is doing very well. The only thing that would make it better would be if the people we elected and sent to Washington would get serious about cutting spending and lowering our national debt.

Success Often Breeds Success

When President Trump campaigned for President, he said he wanted to redo America’s trade deals and bring manufacturing back to America. He has renegotiated the trade deals. Congress has yet to approve the deal with Mexico and Canada, but a lot of manufacturing has returned to America. The Washington Times posted an article today about public opinion of President Trump’s trade policies.

The article reports:

“Bipartisan consensus has emerged that foreign trade is good,” wrote Gallup senior analyst Lydia Saad. “Americans’ broad view of trade is the most positive it has been in more than a quarter-century.

…“Both Republicans and Democrats have become more positive about trade over this period of improving economic conditions,” she noted. “However, support for trade among both groups jumped sharply after Trump took office in 2017.”

The 2019 poll numbers now reveal:

• 70% of Americans say trade with other nations has a positive effect on “innovation and development of new products.”

• 67% say international trade has a positive effect on U.S. economic growth.

• 63% say trade has a positive effect on American businesses,

• 58% say trade has a positive effect of the quality of products.

• 51% say trade has a positive effect on jobs for U.S. workers.

I wonder if the positive results of President Trump’s policies will be reflected in the 2020 election.

 

 

 

Good News For Working Americans

Breitbart posted an article today about the latest economic numbers.

The article reports:

The U.S. economy created 136,000 jobs in September and the unemployment rate fell to 3.5 percent.

Economists had expected the economy to between 120,000 and 179,000 with the consensus number at 145,000, according to Econoday. Unemployment was expected to remain unchanged at last month’s 3.7 percent.

The jobs data for the two previous months were also revised upward, indicating that the labor market was stronger over the summer than previously indicated. Employment for July was revised up by 7,000 from 159,000 to 166,000, and August was revised up by 38,000 from 130,000 to 168,000. With these revisions, employment gains in July and August combined were 45,000 more than previously reported.

The stronger numbers for July and August may also explain the slightly-below expectations figure for September since some of the growth in employment forecast for last month had already occurred.

The last time the rate was this low was in December 1969, when it also was 3.5 percent.

Economic data has been intensely scrutinized this week for signs of economic sluggishness after the Institute for Supply Management’s survey of manufacturing companies suggested the manufacturing sector had unexpectedly contracted for a second consecutive month. Survey data of non-manufacturing companies, however, showed that the services sector continued to expand in September. Similarly, data on private payrolls and unemployment claims suggested that the U.S. economy had cooled but was not near a recession.

The September workforce participation rate remains unchanged at 63.2 percent. This is a chart showing changes in the rate since 2009:

They Did Get Some Of It Right

Yesterday The National Review posted an article about the decision by Colt to halt production of AR-15 rifles.

The article reports:

This, from ABC, is a nice example of a news organization deliberately bending the truth in order to advance a narrative that it wishes were true but is not:

Venerable gun manufacturer Colt says it will stop producing the AR-15, among other rifles, for the consumer market in the wake of many recent mass shootings in which suspects used the weapon.

Wow. Sounds dramatic. ABC continues:

“At the end of the day, we believe it is good sense to follow consumer demand and to adjust as market dynamics change,” Dennis Veilleux, president and CEO of Colt, said in a statement. “Colt has been a stout supporter of the Second Amendment for over 180 years, remains so, and will continue to provide its customers with the finest quality firearms in the world.”

So the story is that, although it still respects the Second Amendment, Colt is going to stop producing AR-15s after a series of mass shootings in which they were used. Right?

Wrong. That’s actually not the story at all, as ABC notes further down:

The company did not mention mass shootings in its statement about stopping production and instead blamed the indefinite pause in making the weapon on a “significant excess manufacturing capacity.”

And that is how you take truth and twist it until it leaves a totally false impression. That is the way the current mainstream media operates.

Trying To Level The Playing Field Has Its Challenges

Fox Business posted an article today about the devaluing of the Chinese yuan. The devaluing of the Chinese currency (currency manipulation) has been used by China for decades to grow their economy at the expense of America. It has been used to lure manufacturing away from America, impact our trade balance, and generally work against the American economy. We have needed to combat this practice for decades, but no President had the courage.

The article reports:

The onshore Chinese yuan weakened to worse than seven per U.S. dollar, hitting its lowest level since 2008, as Beijing looks to cushion the blow from Trump’s tariffs. A weaker yuan makes Chinese goods cheaper for overseas buyers, which may be necessary as China just lost its spot as the US’s biggest trading partner.

Trade data released Friday by the Department of Commerce showed U.S. imports from China fell by 12% in the first six months of the year, allowing Mexico to supplant it as the U.S.’s biggest trade partner.

“China dropped the price of their currency to an almost a historic low,” Trump tweeted Opens a New Window. on Monday. “It’s called “currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”

Last week, Trump said beginning Sept. 1 the U.S. would place a 10% tariff on the remaining $300 billion of Chinese goods. He went ahead with the announcement despite objections from his advisers.

The president warned he could “always do much more” with respect to tariffs, adding the 10 percent tax could go “well beyond 25 percent” if necessary. Earlier this year, the administration placed a 25% tariff on $250 billion worth of Chinese goods.

Weakening the yuan isn’t the only form of retaliation Beijing took on Monday. It also ordered state-owned enterprises to stop purchases of U.S. agricultural products, according to a Bloomberg report, citing people familiar with the situation.

That is a reversal from just last week, when Beijing said it had purchased several tons of U.S. soybeans Opens a New Window. as a gesture of a goodwill amid trade negotitations. Before the trade war began, China was the largest buyer of U.S. soybeans, accounting for 70% of all purchases, but their imports have fallen by 97% since the trade war began.

The article notes:

Over the weekened, The Trump administration pushed back against the idea the trade war was hitting the wallets of U.S. consumers.

“China has strategically gamed the tariffs by slashing their prices and by devaluing their currency,” White House trade advisor Peter Navarro told “Fox News Sunday.”

This trade dust-up with China may get ugly, but it is something that has to be done.

Elected Officials Are Supposed To Represent The People Who Voted For Them

The Democrats have always been able to count of the labor unions to support their candidates. However, in recent years, Democrat policies have worked against people who belong to labor unions. Illegal immigration depresses the wages of American workers. Bad trade agreements send jobs overseas. Both of these problems are things that President Trump is trying to fix, but the Democrats in the House of Representatives are generally a road block to dealing with either problem.

Breitbart posted an article on Friday about some recent comments by AFL-CIO President Richard Trumka.

The article reports:

AFL-CIO President Richard Trumka blasted Democrats during a private meeting this week for their globalist free trade agenda where 2020 Democrat presidential primary candidates have continued to embrace the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP).

During a private meeting with Democrat National Committee (DNC) members, including Chairman Tom Perez who pushed TPP while working for President Obama, Trumka blamed a coalition of elected Republicans and Democrats for the country’s entering into a multitude of free trade agreements that have gutted America’s working and middle class while outsourcing those jobs to China, the Phillippines, Vietnam, and India.

“It’s time to do better,’ Trumka said, scolding Democrat Party leaders, according to the Huffington Post. “I believe you can. I believe you will. And working people are hungry for it. But you can’t offer campaign rhetoric or count on workers’ votes simply because you have a ‘D’ next to your name.”

The article continues:

“You need to prove that this party is the one and only party for working people,” Trumka said, according to the Huffington Post. “And recognize that unions and collective bargaining are the single best way to make this economy work for everyone.”

Trump has sought to protect and create American working and middle-class jobs by imposing tariffs on China and other foreign imports. Likewise, during his first year in office, he ended the Obama effort to enter TPP — which would have eliminated millions more U.S. jobs by allowing multinational corporations to outsource them directly to Vietnam and Malaysia.

Meanwhile, Biden has continued to defend NAFTA, which he claimed in 1993 would add American jobs to the American economy but actually helped eliminate nearly five million U.S. manufacturing jobs and resulted in the closure of nearly 50,000 U.S. manufacturing facilities. A number of American towns and small cities were left economically destroyed and have yet to recover.

I would call this a shot across the bow. Unions provide major money to Democrat political campaigns, even when their members don’t vote for Democrats. If the Democrat party continues in its current direction, the labor union leaders may be less enthusiastic about promoting and funding Democrat candidates.

More Good Economic News

The following is a Press Release from U.S. Steel:

U. S. STEEL ANNOUNCES STATE-OF-THE-ART STEELMAKING TECHNOLOGY INVESTMENT AT MON VALLEY WORKS

PITTSBURGH May 2, 2019–United States Steel Corporation (NYSE: X) announced today it will invest more than $1 billion to construct a new sustainable endless casting and rolling facility at its Edgar Thomson Plant in Braddock, Pa.,and a cogeneration facility at its Clairton Plant in Clairton, Pa., both part of the company’s Mon Valley Works. The cutting-edge endless casting and rolling technology combines thin slab casting and hot rolled band production into one continuous process and will make Mon Valley Works the first facility of this type in the United States, and one of only a handful in the world.

“This is a truly transformational investment for U.S.Steel.We are combining our integrated steelmaking process with industry-leading endless casting and rolling to reinvest in steelmaking and secure the future for a new generation of steelworkers in Western Pennsylvania and the Mon Valley,” said David B. Burritt, President and Chief Executive Officer of U.S.Steel. “U.S.Steel’s investment in leading technology and advanced manufacturing aligns with our vision to be the industry leader in delivering high-quality, value-added products and innovative solutions that address our customers’ most challenging steel needs for the future. We believe that adding sustainable steel technology to our footprint will create long-term value for our employees, our region, our customers and our investors.

The installation of endless casting and rolling technology will give U.S.Steela world-class asset that will improve the quality and attributes of its downstream products for customers in appliance, construction and industrial markets. With this investment, Mon Valley Works will become the principal source of substrate for the production of the company’s industry-leading XG3™ Advanced High Strength Steel (AHSS) that assists automotive customers in meeting fuel efficiency standards. This project, in addition to producing sustainable AHSS, will improve environmental performance, energy conservation and reduce our carbon footprint associated with Mon Valley Works. First coil production is expected in 2022,contingent upon permitting and construction.

With this investment, U.S.Steel continues its more than a century-long commitment to innovative steelmaking in Pennsylvania. The technology will allow for optimization of the Mon Valley Works and other U.S.Steel facilities without increasing the company’s overall steelmaking capacity. The new endless casting and rolling facility will replace the existing traditional slab caster and hot strip mill facilities at the Mon Valley Works. Current and future employees will enhance their skills with more advanced manufacturing to operate and maintain the new facility through training programs developed in partnership with local universities.

As part of the project,U.S.Steel will also include construction of a new cogeneration facility, equipped with state-of-the-art emissions control systems at its Clairton Plant,to convert a portion of the coke oven gas generated at its Clairton Plant into electricity to power the steelmaking and finishing facilities throughout U.S.Steel’s Mon Valley operations.

Once completed, the new advanced steelmaking technology and state-of-the-art cogeneration facilities will incorporate the best available control technologies. Based upon current design and engineering data that is accompanying our air permit applications, we expect that the project will result in significant improvements in emissions compared to the existing facilities to be replaced, including reductions in emissions of Particulate Matter (PM) of approximately 60%, PM10 and PM2.5 of approximately 35%,sulfur dioxide of approximately 50%,and nitrogen oxides of approximately 80%. The project exemplifies our continued commitment to conserve resources and improve air quality in the Mon Valley.

Additional details on the investment, including an investor presentation,can be found at http://www.ussteel.com/MonValleyInvestment.

President Trump’s economic policies are working for everyone.

Reopen The Plant

The Conservative Treehouse posted an article today about the closing of the General Motors plant in Lordstown, Ohio. The article points out that with the auto industry expanding its manufacturing in the United States, it makes no sense to close down an automobile manufacturing plant.

The article states:

…In just the past few months, specifically as an outcome of the USMCA, six auto companies have decided to massively expand U.S. operations and spend over $20 billion on auto-manufacturing investments in the U.S.

It makes no sense for an existing auto plant to sit idle.  Come to terms with the UAW; make a good deal that helps membership and incentivizes ownership; sell the facility to a new group expanding U.S. investment; retool, and get people back to work.

The article lists the investments being made in the United States by other auto manufacturers:

  • Toyota –  $13 Billion Investment: Production capacity increases and building expansions at Toyota’s unit plants in Huntsville, Alabama; Buffalo, West Virginia; Troy, Missouri and Jackson, Tennessee. [SEE HERE]
  • Fiat Chrysler – $4.5 billion for a new assembly plant in Detroit and boosting production at five existing factories. Hiring 6,500 workers.  [SEE HERE]
  • Ford Motor Co – New expansion for 500 workers and investment of additional $1 billion in its Chicago assembly operations to help keep up with booming demand for sport and crossover-utility vehicles. [SEE HERE]
  • Volkswagen – New investment of $800 million by Volkswagen and the creation of 1,000 jobs in Hamilton County, Tennessee. [SEE HERE]
  • BMW – Reacting to changes (75% rule of origin) in the new USMCA, BMW announced exploration for a second U.S. manufacturing plant that could produce engines and transmissions, Chief Executive Harald Krueger said. [SEE HERE]

Evidently the problem is the inability of General Motors to reach an agreement between GM CEO Mary Barra, and the UAW leadership. If General Motors intends to be a major part of the automobile market in the future, they need to work out a deal with the UAW and put people back to work.

 

Laws Have Consequences

Yesterday The Conservative Treehouse reported that Toyota has announced the following:

  • By 2021, Toyota will now invest nearly $13 Billion in its U.S. operations with plans to add nearly 600 new jobs at American manufacturing plants
  • Hybrid versions of the popular RAV4 and Lexus ES to be produced in Kentucky for the first time
  • Production capacity increases and building expansions at Toyota’s unit plants in Huntsville, Alabama, Buffalo, West Virginia, Troy, Missouri and Jackson, Tennessee

The article states that this is a direct outcome of the NAFTA replacement USMCA trade deal; and the new 75% rule of origin within the Auto sector.

The article explains:

The guiding decision here relates specifically to the construct of the USMCA (NAFTA replacement).   Toyota was previously focused on multi-billion-dollar investments in Canada as they exploited the NAFTA loophole and procured component parts from Asia for North American assembly and shipment into the U.S. Market.  However, when they renegotiated NAFTA and created the USMCA President Trump and USTR Lighthizer closed closed the loophole.

The new USMCA agreement requires that 75% of automobile parts must be made in North America; and 45% must come from plants with minimum labor costs ($16/hr); or face tariffs to access the U.S. market with the finished good.  As a result Toyota has to either pay a tariff to continue importing Asian component parts, or move the higher-wage component manufacturing directly into the U.S.

Obviously, Toyota chose the latter.

The article explains that Toyota is not the first automobile company to respond to USMCA:

Keep in mind Toyota is not the first Auto manufacturer to respond with increased U.S. investment. Prior to the USMCA German auto-maker BMW began building a $2 billion assembly plant in Mexico. Under the old NAFTA plan most of BMW’s core parts were coming from the EU (steel/aluminum casting components, engines, transmissions etc.) and/or Asia (electronics, upholstery etc).

However, under the USMCA the Mexico BMW assembly plant has to source 75% of the total component parts from the U.S, Canada and Mexico; with 45% of those parts from facilities paying $16/hr.

The result was BMW needing to quickly modify their supply chain, build auto parts in the U.S. and Mexico, or they would end up paying a tariff on the assembled final product.

Like Toyota, BMW made the financial decision to open a new engine and transmission manufacturing plant in South Carolina…. exactly as Trump and Lighthizer planned.

And don’t forget Fiat Chrysler made a similar announcement in February: “The automaker says it will hire 6,500 workers and invest $4.5 billion by adding a new assembly plant in Detroit and boosting production at five existing factories.”

Like him or not, President Trump is a businessman who is doing things that are helping the American economy and the average worker.

The Power Of The Media Illustrated

This is the current polling from RealClearPolitics:

This is some recent economic news reported by The Washington Times on January 9:

Given the dazzling December economic data, it’s no wonder the press gave it short shrift. According to the U.S. Bureau of Labor Statistics, the economy added a whopping 312,000 jobs, far more than the expected 176,000. After revisions, job gains have averaged an impressive 254,000 per month over the past three months. Job growth in 2018 (an average of 220,000 per month) passed that of both 2016 (195,000) and 2017 (182,000). Payrolls increased by 2.6 million in 2018, the highest since 2015.

The sunny jobs picture encouraged 419,000 new workers to enter the workforce and sent the labor force participation rate up to 63.1 percent. Unemployment rates among blacks, Latinos and women are at or near historic lows.

Job growth has also meant significant wage growth. Wages are up a stunning 3.2 percent from last year and .4 percent from November. December was the third straight month that the yearlong growth in nominal average hourly earnings was above 3 percent in nearly a decade; the last time we saw that trend was April 2009. Wages are also being given an assist by inflation being kept in check.

The article at The Washington Times concludes:

His (President Trump’s) astounding economic track record is their worst nightmare. It puts the lie to the nonsense Mr. Obama, the Democrats and the media have been shoveling for years: That anemic economic growth, high unemployment, the collapse of manufacturing and grotesque trade imbalances were the “new normal.”

It also pointedly demonstrates that the statist vision — radical wealth redistribution, socialized medicine, green energy chimeras, social justice enforcement, limits on free speech, private property and gun ownership, and the rule of the leftist mob — creates only tyranny, poverty, injustice and servitude. (Note the deflection: These are things the left claims to want to eradicate.)

Mr. Trump and his economic thunderbolt are exposing the left and its policies as irredeemably bankrupt, economically and morally. And that is perhaps the biggest reason why they must try to destroy him.

A lot of this economic news has not been reported. However, people do notice when there are more jobs available and there is more money in their paycheck. President Trump’s approval numbers are finally in positive numbers. The economy is booming. What would be the basis for most Americans believing America is headed in the wrong direction? Might it be the constant negative reporting from the media? Can you imaging what President Trump’s approval rating would be if the media were actually balanced? Just remember–the people vote. The media represents only a small percentage of votes.

No One Should Be Surprised By This

Breitbart is reporting today on some of the things the Democrats plan to do now that they have taken over the House of Representatives.

The article reports:

Rep. Brad Sherman (D-CA) plans to introduce articles of impeachment against President Donald Trump on Thursday — the first day that Democrats control the majority in the U.S. House of Representatives.

…Newly-elected Rep. Rashida Tlaib (D-MI) also endorsed impeaching Trump on her first day in office, according to The Nation, which described Tlaib as calling for “immediate steps” to remove the president from the White House.

“Each passing day brings more pain for the people most directly hurt by this president, and these are days we simply cannot get back. The time for impeachment proceedings is now,” Rep. Tlaib declared.

Representative Sherman wants to impeach President Trump for obstructing justice by firing former FBI Director James B. Comey, among other wrongdoing.

The article states:

“There is no reason it shouldn’t be before the Congress,” Sherman said. “Every day, Donald Trump shows that leaving the White House would be good for our country.”

I don’t know what these people are looking at, but the middle class has come roaring back since President Trump took office. The unemployment numbers are down, there are more jobs than people looking for work, people have more spending money in their pockets, manufacturing is coming back to America, better trade deals have been negotiated, America’s carbon dioxide emissions are down, and North and South Korea are talking to each other. Which one of these accomplishments do you think the American people are willing to impeach President Trump for?