NEW YORK— As Hillary Clinton and Donald Trump campaign across the nation and share their respective visions about the country’s economic future, the two major party candidates differ greatly on a host of key issues that include trade, manufacturing, jobs and wages and taxes.
For suppliers within the housewares industry, a major shift in federal policy on a host of issues such as imports, trade agreements, corporate tax rates and the minimum wage would impact the day-to-day operations of vendors large and small.
Additionally, retailers would also feel the impact of significant changes in the aforementioned issues. New trade agreements, or changes to existing agreements, would have an impact on the types of housewares carried in-store. An increase in the minimum wage would lead to increased labor costs for retailers, but also has the potential to put more money in the pockets of shoppers.
With these issues top-of-mind for those within the housewares retail marketplace, HOMEWORLD BUSINESS® has outlined key elements of the proposals from the Democratic and Republican candidates with a focus on manufacturing, trade, jobs and wages and taxes.
HomeWorld Executive Editor Greg Sleter covers Clinton’s proposals and Senior Editor Mike Duff looks at the proposals from Trump.In addition, HomeWorld spoke with a number of experts to get their input on the impact of each candidate’s proposals and the likelihood of each becoming law. Offering their insights are Mauro Guillen, management professor at the Wharton School at the University of Pennsylvania and director of the Lauder Institute; Philip Nichols, professor of legal studies and business ethics at the Wharton School; and Gary Clyde Hufbauer, a Reginald Jones Senior Fellow at the Peterson Institute for International Economics (PIIE).
Insight from Moody’s Analytics on the “Macroeconomic Consequences” of each candidate’s economic policies is also included.
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Manufacturing Candidate’s Proposal:  Hillary Clinton’s proposal to boost the American manufacturing sector includes a multi-pronged plan that covers a host of topics including harnessing regional strengths, preventing foreign countries from abusing trade rules and bringing domestic manufacturers together in an effort to share ideas and learn from one another.The Democratic candidate wants to use $10 billion in federal funds for her “Make it in America Partnership,” which will be paid for by a “clawback” proposal that would rescind tax breaks for companies that outsource jobs overseas. She feels this will help make all elements of manufacturing more innovative and competitive, while also encouraging domestic manufacturing and reshoring.In addition, Clinton also wants to use federal resources to bring together workers, unions, businesses, universities and various levels of government in an effort to encourage industries to locate in a specific region. This, she feels, will help ideas for new goods and production methods move from university labs to factory floors across the country.The third prong focuses on a pledge from businesses to keep jobs and investment in the United States. Companies participating in Clinton’s “Make it in America” strategy would be required not to shift jobs or profits to other countries by outsourcing production or “inverting” to move their residence abroad and avoid paying taxes.
She is also calling for smaller manufacturers to build an ecosystem and supply chains to allow companies to learn the skills they need to operate a profitable business. This could include “test and learn” centers where small manufacturers could learn new techniques, or “teaching hospitals” where workers, university and community college experts and students have the opportunity to learn new skills from one another. Insight: |
Manufacturing Candidate’s Proposal:  The Donald Trump plan for manufacturing is closely entwined with the candidate’s considerations about international trade. Essentially, it’s based on the contention that the American worker has been hurt because industry in the U.S. hasn’t played on a level playing field.Other nations, such as China, have used currency manipulation and unfair practices, including the disregard of intellectual rights, to unfairly undercut the U.S., leading to the closing of 50,000 factories since China gained entry into the World Trade Organization. The Trump campaign has complained that the Chinese government coerces U.S. companies to transfer proprietary technologies to Chinese firms as a condition of entry into the China market. By renegotiating trade deals with China and ending practices that put U.S. companies at disadvantages, Trump said manufacturing and jobs will stop moving offshore and thrive here.Trump’s plan also envisions replacing the Trans Pacific Partnership and the North American Free Trade Agreement with deals that will create better and what he contends are fairer conditions for American manufacturing. He also will reconfigure regulations that unduly burden companies that do or would manufacture in the U.S.
Insight: However, the process of instituting tariffs and renegotiating trade deals would have their own consequences. They would create a degree of uncertainty that may make business reluctant to invest in alternative sources until the processes Trump would put in place progress far enough to provide a clear view of the opportunities and risks. Given the uncertainty, Moody’s feels manufacturers would likely be cautious in making investments. Importers would have to consider new sources other than those subject to immediate action, most likely Mexico and China. At the same time, offshore manufacturers who might be considering investments here would be in a quandary wondering both about the political environment in the U.S. and at home. Hufbauer of the Peterson Institute for International Economics points out that foreign governments have proven good at retaliating against U.S. trade actions in specific ways, targeting products that have disproportionate consequences for certain states or regions. In balance, the relatively protectionist measures proposed by the Trump campaign could foster some industries in the U.S. but could prove burdensome to others. |
