Firm issues analysis of Trump manufacturing proposals

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President Trump’s pro-business stance is encouraging to manufacturers who believe it will lower taxes and ease regulatory burdens, but his desire to dissolve some trade agreements and his talk of a 45 percent tariff on goods from China and a 35 percent tariff on Mexican imports make the manufacturing sector worried.

That’s according to Chicago-based advisory firm Grant Thornton, which has issued analysis from its policy team about how Trump’s most recent proclamations and executive orders that dramatically alter U.S. policies might impact four key areas — infrastructure, manufacturing, trade and transportation.

On the infrastructure side, improvements should benefit manufacturers, the firm said.

Trump made improving the nation’s crumbling infrastructure a cornerstone of his campaign. Democrats recently “dared Trump” to make good on his promise by unveiling a $1 trillion infrastructure spending bill in the Senate, Grant Thornton said.

Manufacturers support proposed infrastructure improvements because they could speed the delivery of goods, reduce freight costs or lower the transportation cost of energy while at the same time bringing new revenue opportunities, said Jeff French, national managing partner of consumer and industrial products.

Randolph Smith, national transportation industry practice leader partner, is cautious about Trump’s plan to fund the infrastructure improvements through public-private partnerships because he said they have historically been unsuccessful.

Trump’s commitment to weaken parts of the Affordable Care Act and his order to the Environmental Protection Agency to freeze all grants to fund environmental education and research have encouraged manufacturers.

“The pure number of regulations manufacturers must comply with makes it difficult,” French said. “They’re looking for relief. The Obama administration implemented significantly more labor rules and regulations than the previous administrations. They want the regulations to be consistent, but not overly burdensome.”

High regulatory compliance costs limit the dollars that executives can reinvest in their businesses.

In the belief that foreign countries have taken advantage of open U.S. borders, Trump is talking tough on trade, calling for the end of trade agreements, raising tariffs and taxing foreign imports. He already has pulled the United States out of the Trans-Pacific Partnership, is threatening to exit the World Trade Organization and wants to renegotiate the North American Free Trade Agreement.

Manufacturers generally prefer multiple trade options, French said.

“Manufacturers love to see trade agreements. They want access to markets,” French said.

The president also is contemplating a 45 percent tariff on goods coming from China and a 35 percent tariff on Mexican imports, which also worries manufacturers. Trump also said he would slap a 35 percent tax on companies that ship jobs overseas.

“If you’re an American manufacturer and an importer of products or raw materials, a 35 percent tax on imports would not be favorable,” French said.

Comments

13 comments on “Firm issues analysis of Trump manufacturing proposals

  1. Ann wallace

    Sorry, but can not agree with the lightening up of environmental regulations. If we do not protect our water and air, and monitor the environmental impact manufacturing has on them, we will not have waterways, oceans, etc. on which to enjoy our boats.

  2. Scott

    I agree with Ann Wallace. To “freeze all grants to fund environmental education and research” in this day and age of climate change is short sighted, at best, or a purposeful egregious act against mankind, at worst. The Arctic was over 40 degrees higher than normal this winter, with unprecedented loss of Arctic sea ice. Unfortunately for us, the climate change deniers cannot change reality.

  3. Marty Holmes

    Easy solution. Buy all your needs from American manufacturers. America has paid export tariffs for years. Now it’s time to buy here and “Make America Great Again”.

  4. DAN

    This is the problem with reasonable dialogue in our country. Any one who has had to sign the front of a paycheck in the marine industry knows full well that the regulations are out of hand and need to be revised some if we are to remain competitive in the world market. The above comments would make one think someone has suggested an abolition of all our regulations.
    This certainly is not the case at all. Comments about “rivers on fire” and “drinking toxic water” do not add anything to the discussion that we must have ato insure we have the best balance in our environmental regulatory programs. And yes, they do need to be re-balanced. For 35 years I have owned and operated a waterfront marine facility that provides water access for recreational boats. It is harder and harder to maintain our facility due to some unreasonable language that has seeped into our permit process. Our lively hood depends on clean waterways with good fish stock that people want to be out in.
    Of course all regulations are not bad. But the ones we have now do need a re-balance. Intelligent discussion needed !

  5. Capt. Ed

    I would have stated the obvious, but fortunately, other brilliant minds beat me to it, so I’ll simply state that I wholly agree with Marty and Dan.

  6. TenFour

    Yes, “intelligent discussion” is needed, which is not coming from the administration that seems bent on ignoring science, slashing any and all regulations without thought, and pushing wacko economic theories completely unsupported by experts or experience. It is very easy to say “buy American,” but in many cases the product is no longer made in America. When boat prices increase by 25-30% because of import tariffs you will not see an increase in boats and business. And, many of us remaining boaters can vividly remember when waterways were much more polluted prior to environmental regulations. There are places I swim today that I wouldn’t have wanted to touch the water in the past.

  7. Bryon Kass/ Custom Design

    Trump will reduce job killing regulations. I doubt most people know what our industry has gone through to do business. The attack on marine products are totally nuts from the EPA. EPA has put so many regulations on diesel engines that some OEM cant even sell their products without recertification for their exempt air emissions. Then there is the permeability standards that tell us the EPA will bankrupt boat builders who add one wrong hose. Oh how about the programs paying fishing boats to repower with the new electronic engines with all their troubles. On that they insist the old still good engines be destroyed. Or telling us to sell an engine we need cores that are destroyed. It goes on and on. The lefty tree huggers are destroying industry with regs that have little to do with saving the environment. I have a marine science degree. When they say the science is settled it has become a religion. No science is settled as that is the beauty of science. The ability to interpret data in different ways. Go POTUS Trump!

  8. RedBW

    Don’t get excited and applaud the lifting of environmental regulations. Who is going to buy a boat to use it cruising toxic lakes and rivers? Toxic waterways will be the end of the boating industry.

  9. AnonymousBob

    Bryon Kass: Your posts always amuse me. I just wish I could understand your broken sentence structure and run-on sentences. Boggles the mind…

    The easing of regulations has to make sense. Trump is wantonly rescinding regulations without any consideration of the ramifications. Of course, his track record of business failures and improper and unethical practices doesn’t bode well for his ability to really help the Marine industry. He’s only catering to his swamp buddies from Goldman Sachs and to his multi-million dollar donors.
    Yes, some EPA, OSHA, and other regulations are burdensome, but we all must remember regulations are driven by lobbyists in those industries. Ethanol is the perfect example. So, before you recklessly remove regulations, at least research what will happen when you do. The Great Recession was proof that industries are terrible at self-regulating. Greed isn’t always good.

  10. Chuckie

    After the sheer amount of European yachts at FLIBS and MIBS I wonder if we might research whether these products are indeed subsidized in some way.

    I realize that the almost one to one dollar to euro ratio is a strong incentive for these imports but there has to be something else in the form of export rebates, etc.

    If this where the case they should be tariffed in the same amount of the subsidies to give our manufacturers a level playing field.

  11. Blake Davis

    I’m curious the actual occupation, and location of this “Anonymous Bob” that trolls this site. As a Broker, I can attest the fact that all my customers who have bought yachts have been very pro Trump, and the whiners and doomsayers (actually sold all their stocks before the election) who make excuses why not to buy boats have been Federal employees who only think of “their nests” or live in California.

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