Sunday, 14 January 2018 00:16

Will US Manufacturing Capacity Regain Much from GDP Percentage?

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After the U.S. consumption percentage had reached its highest gross domestic product level most recently, (68%), President Trump has promised to bring both “blue collar jobs” and factories back to a much more rational level. Although no particular percentage objective level has been officially announced, it has been expected that a reduction of America’s $18.75 trillion GDP to at least a 50% level could be attained.

This has taken into account the many high-tech, robotics, and service jobs that are bound to add non-traditional manufacturing jobs that did not exist as late as the 1990's decade. Supporting this premise has been the maintenance and expansion of traditional factory jobs, plus a return to the U.S. of the $2.5 trillion that were retained overseas by the increasing number of conglomerates. These have spread their manufacturing capabilities to China, Southeast Asia, Mexico, Germany etc., due to lower cost facilities and the resultant cheaper products, which have swamped America’s shores in the past two decades.

While pressure from the White House has severely curbed the transfer of additional jobs overseas, it is doubtful that the objective to return GDP to the 40-50% consumption level can be achieved by the time of the “mid-term” election target of November 6, 2018.

With the badly-needed addition of GOP Senators necessary to assure substantial Republican support to achieve GOP targets, any shortfall could endanger the Trump manufacturing and factory jobs goal, going forward. What is practically certain is that several additional Republican Senators would make a near-certain Trump production goal an achievable objective during the last two years of his present term.

But one of the unfortunate oddities of the current presidential capability to move his Administration goals forward, is that all Democrat Senators and a handful of Republicans stand in the way of giving President Trump the needed majority to fulfill his major Administrative goals.

If the current imbalance persists, it’s very unlikely that such major objectives as a workable tax plan, infrastructure update, and a major return of factory production to the U.S. will happen.

Under such circumstances, a re-election of President Trump in 2020 could become a very doubtful reality.

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Morrie Beschloss

Morris R. Beschloss is a global economic analyst, award-winning long-term top business executive, and avid blogger.

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