President Trump Tells Exporters To Be Patient, Shows No Signs Of Backing Down On Trade

Jun 28, 2018
Originally published on June 28, 2018 8:09 pm
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President Trump was in Wisconsin today to celebrate construction of a new $10 billion factory.

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PRESIDENT DONALD TRUMP: Eighteen months ago, this was the field, and now it's one of the most advanced places of any kind you'll see anywhere in the world. It's incredible.

CORNISH: The Foxconn plant will make liquid crystal displays for computer monitors and TVs. Trump's message, the investment by Taiwan's Foxconn, is proof that his administration's business-friendly policies are boosting the economy despite the fact that another Wisconsin company, Harley-Davidson, is moving more of its operations overseas. Harley-Davidson says it's shifting some motorcycle production to Europe in response to fallout from the president's trade policies. NPR's Scott Horsley ties it all together.

SCOTT HORSLEY, BYLINE: At the ceremony south of Milwaukee, President Trump introduced some of the construction workers who've been helping to shape the vast Foxconn plant. They're the first wave at a facility that's ultimately expected to employ some 13,000 people. And Trump says that's just the beginning.

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TRUMP: We're open for business - made in the USA. It's all happening, and it's happening very, very quickly.

HORSLEY: Trump notes the U.S. has added more than 300,000 manufacturing jobs on his watch, nearly 3 million jobs overall. The unemployment rate has fallen to just 3.8 percent, and it's expected to dip even lower.

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TRUMP: At the center of America's economic resurgence are the massive tax cuts that I signed into law six months ago.

HORSLEY: Experts say those tax cuts have contributed to a surge in economic growth. Figures out this morning show the U.S. economy grew at a slower-than-expected rate of 2 percent in the first three months of the year. But since then, growth has accelerated, and some forecasts for the second quarter now top a remarkable 5 percent. For the full year, growth is expected to be around 3 percent. But chief economist Nariman Behravesh of IHS Markit predicts that tax-cut-fueled growth spurt won't last.

NARIMAN BEHRAVESH: Some people have referred to it as a bit of a sugar high. We'll get a nice boost in growth, but it then wears off. By 2020, we see growth back down to around 2 percent.

HORSLEY: And the new poll from Politico/Morning Consult finds public support for the tax cuts has slipped in recent months. Only about a quarter of the people surveyed say they've seen an increase in their own paychecks. More than half say their take-home pay hasn't budged. The White House argues over time, the benefits of the tax cuts will trickle down as more companies make investments, boosting productivity and wages. But Behravesh says while the tax cuts may encourage investment, the administration's bellicose trade policy is having the opposite effect.

BEHRAVESH: We've heard from a lot of our customers in a variety of industries that they're basically taking a wait-and-see attitude in terms of capital spending. So they've kind of hit the pause button, if you want to say it that way. In a way, the administration's undercutting its own case by doing some of these trade policies.

HORSLEY: Companies that use steel and aluminum are having to pay more for those materials as a result of Trump's tariffs. And other countries have retaliated with tariffs of their own, putting the squeeze on U.S. exporters. Wisconsin's Harley-Davidson said this week it would shift some motorcycle production to Europe to avoid new EU tariffs. House Speaker Paul Ryan, who's from Wisconsin, says while he's all for confronting unfair trade practices, the administration's going about it the wrong way.

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PAUL RYAN: I'll say it again, and I've said it always. I don't think tariffs are the right way to go. I think tariffs are basically taxes. And what ends up happening is you get escalating tariffs or escalating taxes.

HORSLEY: So far, Trump shows no sign of backing down in his aggressive trade policy. In fact, he's threatening additional tariffs. His message to suffering American exporters is be patient.

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TRUMP: Harley-Davidson, please build those beautiful motorcycles in the USA, please, OK? Don't get cute with us. Don't get cute.

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HORSLEY: Earlier, Trump had criticized the motorcycle maker for waving the white flag, which brought a rebuke from GOP Senator Ben Sasse. The problem isn't that Harley is unpatriotic, Sasse said. It's that tariffs are stupid. Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.