Report Offers 10 Principles To Guide The Administration’s Strategy On Manufacturing

A new report from the Information Technology and Innovation Foundation argues that conventional economists misunderstand why the U.S. has lost so many manufacturing jobs, and their dismissals of the President efforts to bring them back do little to provide substantive guidance or address the legitimate concerns of American voters who are angry about trade and globalization.

The Information Technology and Innovation Foundation (ITIF), a tech-policy think tank, has released a new report that urges President Trump to ignore both condescending criticism and tired laissez-faire thinking and continue forward with his focus on growing U.S. manufacturing.

“From his involvement in the Carrier deal to the consequences he has suggested for offshoring jobs, it is clear that President Trump is serious about reviving U.S. manufacturing,” said ITIF president Robert D. Atkinson, the report’s lead author, in a statement. “It’s unfortunate that the Washington establishment has either dismissed the idea out of hand or relied predominantly on generic ideas like tax reform and infrastructure spending. While those policies would certainly help the broader economy, they’re like using a sledgehammer when we really need a scalpel. The key to effective manufacturing policy is to focus on which jobs can and should be brought back and which production is better off performed in other nations.”

In the report, Atkinson and co-author Stephen Ezell, ITIF’s vice president for global innovation policy, emphasize the importance of focusing on which kinds of manufacturing jobs the U.S. should and shouldn’t target for the American workforce. The author’s also suggest that the U.S. should have a manufacturing sector at least large enough for it to afford its imports without running a trade deficit.

And while economists argue there’s nothing policymakers can do to grow manufacturing even if it were a sensible goal, Atkinson and Ezell counter that if jobs were lost because of export subsidies, currency manipulation or other unfair practices, then there are steps the U.S. government can take to push back.

The report proposes 10 principles for a U.S. manufacturing policy that is geared toward the kind of reshoring and economic growth that would do the most good for America including:

  • Focus on traded sectors, not just manufacturing;
  • Focus on high-value-added, defensible sectors and segments;
  • Focus on the trade deficit, not jobs per se;
  • Recognize what should stay and what shouldn’t;
  • Understand that when U.S. companies succeed in overseas markets it can help U.S. employment;
  • Focus on attraction rather than compulsion;
  • Move beyond one-off deals and a low-cost business climate;
  • Change the playing field through technology;
  • Support the defense industrial base; and
  • Pay attention to where advanced production is located in the United States.

“The Trump administration is right to focus on manufacturing to bolster America’s economy, but we need to look to the future not the past,” said Atkinson. “This will mean stepping up the fight against foreign ‘innovation mercantilist’ practices, improving the U.S. business climate, and importantly, expanding investment in key manufacturing support systems. If the president can eschew ideologically based approaches in favor of a more strategic vision, his goal of reviving U.S. manufacturing could become a reality.”

Check out the full report here.

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