A few weeks of new U.S. presidential elections, we make an recap of the work of tycon Trump during his 4-year term of office.
THE PROMISE OF THE REVIVAL OF THE COAL INDUSTRY
Trump promised to “put our miners back to work” during his 2016 campaign trips. When would he end the “war on coal”? Half a dozen times after becoming president, Trump signed executive orders that were supposed to save the industry, applauding his promise to bring back coal.
That’s not exactly what happened. According to a recent New York Times article, 145 coal combustion units in 75 power plants were idle during Trump’s term (“the fastest decline in coal burning capacity in a single presidential term”). Coal-generated energy decreased from 31 percent to 20 percent. Coal production decreased by 34% (“the largest four-year decline in production since at least 1932”). And about 5,000 workers in the industry, nearly 10 percent of the workforce, lost their jobs while Trump was president. Not only did Trump not restore the coal industry, he also failed to slow its decline.
THE PROMISE OF THE REVIVAL OF THE STEEL INDUSTRY
“Steel, we’re bringing it back to life,” he told supporters in Pittsburgh during his first presidential campaign. In 2018, he imposed 25 percent tariffs on steel imports from China, Europe, Canada and Mexico, arguing that making imported steel more expensive would make domestic production more competitive.
In a first wave of enthusiasm, U.S. steel companies increased production and hired workers, only to lay off many of them when it was discovered that there was not enough demand to buy the increased U.S. production. By 2020, U.S. Steel Corp. would have laid off thousands of workers and minimized some of its blast furnaces. Its stock price fell two-thirds from its 2018 peak. Meanwhile, companies relying on steel have had to raise consumer prices. Many of them have also laid off workers.
SAVING JOBS IN THE MANUFACTURING SECTOR
Trump said it would prevent companies from moving production abroad and even bringing manufacturing jobs back to the United States? At first, Trump said he made a deal to keep a Carrier Corp. facility operating in the United States instead of moving to Mexico. But only eight months later, Carrier revealed that it was eliminating 338 factory jobs and moving locations to Mexico. Trump said he would punish companies that moved jobs abroad, but executives soon realized he would never carry out this threat.
Under Trump, US jobs are moving overseas even faster than before. Two years later, The Guardian noted that since Trump became president, “nearly 200,000 jobs have moved abroad. And just a few months ago, the Economic Policy Institute reported that between 2016 and 2018, the most recent year for which data is available, “nearly 1,800 factories have disappeared” from the U.S. manufacturing base.
REDUCE THE DEFICIT WITH CHINA
Trump promised to reduce the trade deficit with China? China was one of the countries that “stole our businesses, stole our jobs, stole our money,” he said in the election campaign. “We cannot continue to allow China to rape our country”. “We will put an end to our chronic trade deficits”.
To this end, he tormented the Chinese, he negotiated with them. He imposed tariffs. He announced that the big trade agreements were just around the corner. The result? In 2016, the U.S. trade deficit with China was 346.8 billion dollars, according to data from the Census Bureau. Last year, the trade deficit was 345.2 billion dollars. Trump reduced the trade deficit with China by $1.6 billion.
WHAT DIDN’T WORK?
In retrospect, the president has never done much to bring back jobs in the manufacturing sector. He has clearly taken action to help coal and steel and reduce the trade deficit with China. With Scott Pruitt as director of the Environmental Protection Agency, the Trump administration withdrew many of the regulations that coal managers said were harming the industry. The tariffs were supposed to reduce the trade deficit and help U.S. steel producers.
The real problem is that the steps it took failed to move the scales. Why has coal continued to decline? Because natural gas was cheaper and cleaner, so power companies continued to replace coal-fired power plants with gas-fired power plants – as they had done during most of Barack Obama’s presidency. Trump failed to overturn either the free market or society’s desire to reduce pollution.
The trade deficit has not been reduced, largely because Chinese companies have become an integral part of US supply chains – and tariffs could not change this fact of modern economic life. (Moreover, the Chinese have lowered the price of many goods in order to remain competitive.)
One of the things the last four years have shown is that presidents cannot relaunch industries that are in structural decline. And that, despite all the criticism that has been levelled at it, globalization is almost impossible to reverse.
There are industries that the government can help, but they are the industries of the future, not those of the past. The Obama administration has granted federally guaranteed loans to battery and solar energy companies. Some of these companies have gone bankrupt (Solyndra), but others have become important players that are creating thousands of jobs and transforming industries.
Ultimately, it is pointless to try to save industries whose time has passed but rather to invest and help companies innovate and grow in a rapidly changing future.