After all, the policies of the Trump administration, including tariffs and immigration, seem to be going in the opposite direction.

The "Politico" website published an opinion article on October 18 stating that the Trump administration's policy of bringing manufacturing back to the U.S. is caught in a self-contradictory dilemma. Tariffs have increased the cost of raw materials and imported equipment needed for expansion by American manufacturers, while new visa and immigration policies may reduce the supply of talent, exacerbating the shortage of skilled workers in manufacturing. The budget cuts promoted by the White House threaten the subsidies required for companies to bring their operations back, leading to an unstable subsidy environment. Even within the Trump administration, there are policies that contradict each other, causing funding projects to be suspended from review. As a result, many companies complain that they don't know which "America First" policy to plan around.

"Thinking only about taxation, ignoring supply-side obstacles."

The article directly pointed out that these policies collectively highlight the limitations of Trump's ad-hoc governance style and expose his tariff system as more about retaliation than taking the initiative, resulting in a costly balancing act that business leaders find increasingly difficult to handle.

For example, tariffs have increased the price of imported equipment, including training robots used in community college laboratories, making it more expensive to train local American workers, who are precisely the talent source the government hopes to fill new jobs with.

Peterson, Senior Vice President of Public Affairs at the National Electrical Manufacturers Association, which represents over 300 companies, said that manufacturers "fully support" the Trump administration's goal of rebuilding domestic industry, but people have found that government policies sometimes go against the goal.

"We really don't want this to become a further step backward solution," said Peterson.

October 9, 2023, in Schenectady, New York, USA, Plug Power's manufacturing plant. IC Photo

The White House has made bringing jobs back from overseas a top priority, covering various sectors from shipbuilding to semiconductor manufacturing. Trump has received billions of dollars in investment commitments from companies, some specifically aimed at bringing jobs back to the United States, including Stellantis' $1.3 billion investment plan and JPMorgan Chase's recent announcement of a $1.5 trillion initiative.

However, a White House official who did not wish to be named stated, "We are not getting the recognition we deserve. It was all carefully thought through, but the reality is that companies are unwilling to break away from profitable operations."

Nevertheless, when considering these major investments, companies also have to face new industrial tariffs, a Supreme Court case reviewing whether the president has the unilateral authority to impose emergency tariffs, and uncertainties about whether these tariffs will continue after the Trump administration.

Several U.S. business leaders said this situation creates a paralyzing effect, and without more certainty, companies cannot approve offshoring projects.

For those who support Trump's strategy, this turbulence is an inevitable transitional phase in the deep transformation following decades of free trade rules that led to the offshoring of industries and the hollowing out of the U.S. manufacturing base.

It remains unclear whether the government can convert Trump's intuition into a lasting policy system needed for industrial revival.

"You could say we're in a low point," said Harry Moser, president of the non-profit organization "Reshoring Initiative," which promotes and tracks offshoring efforts. "So far, we're overcoming the uncertainty and instability caused by tariffs. Tariffs will eventually push companies to take offshoring actions, but in the meantime, the pain is unavoidable."

Tariffs aimed at promoting production back to the U.S. have increased the cost of imported parts for American factories, especially in supply chains where components need to cross borders multiple times to complete production, such as in the automotive and semiconductor industries.

Although Trump supporters claim this will force companies to adopt domestic procurement by squeezing imports, companies counter that they currently cannot obtain these products in large quantities from American manufacturers.

"It's frustrating because we're the most American car company with the highest export volume, yet we're facing a $2 billion cost pressure that hinders my ability to invest more in the U.S.," said Jim Farley, CEO of Ford Motor Company, during the "FordPro Accelerate" meeting held earlier this year in Detroit.

Many business figures, including Goldman Sachs CEO David Solomon, Mattel CEO Ynon Kreiz, and Lucid Motors CEO Mary Barra, expressed similar concerns. For example, Lucid Motors decided to scale back and delay an aluminum forging project that was originally planned to bring jobs back to Michigan from China.

"The government's approach seems more like 'ready, fire, aim,' " said Scott Lincicome, vice president of overall economics at the libertarian Cato Institute. "Their first instinct is to impose tariffs, hold government equity, and take other measures, while somewhat ignoring many supply-side obstacles."

In fact, domestic producers in the U.S. have also raised prices to match the costs of foreign products subject to new tariffs.

For example, U.S. steel and aluminum manufacturers expect foreign competitors to face new tariffs, so they have raised prices in advance, triggering a chain reaction in the supply chain, and in some cases, even stimulating companies to produce in regions outside the U.S. where steel prices are lower.

"If you impose tariffs on intermediate products like semiconductors or auto parts, you're hurting American companies that are trying to export or trying to reshore," said Robert Atkinson, president of the Information Technology and Innovation Foundation, a think tank focused on industry and technology policy. "With a more nuanced strategy, such mistakes wouldn't happen."

Talent is also an issue

Although some companies have announced plans to build new factories and expand their operations in the U.S., many companies say they are unable to find enough skilled workers to fill job vacancies.

According to the U.S. Bureau of Labor Statistics, there are currently over 400,000 open manufacturing jobs nationwide, with the most severe shortages in high-tech fields such as semiconductors, robotics, and advanced manufacturing.

This talent shortage issue is conflicting with new immigration policies, and business groups worry that these new policies will further worsen the problem.

Trump announced in September a new $100,000 fee for H-1B visa applications, which significantly increases the cost for companies to hire foreign workers and may hinder companies from sponsoring foreign engineers or technicians needed for expansion.

October 4, 2023, Los Angeles, USA, members of multiple unions and immigrant rights organizations participated in a rally and gathering with the theme "We the People Rise - Stop Hate, Stop Raids." IC Photo

Industry groups warn that this change may weaken the talent training channels that Trump claims he wants to rebuild. They believe that companies often rely on foreign engineers to transfer technical knowledge to American teams during factory expansions. Currently, countries such as Germany and China have extended olive branches to skilled workers who might otherwise have gone to the U.S.

"We know the importance of talent competition," said Jeff Wos, president and CEO of the State Business Executives Alliance, a business leadership association. "We hope to ensure that these policies do not limit the hiring of excellent American talents domestically, while also ensuring that we do not close the door to others in the global talent pool."

The U.S. Chamber of Commerce filed a lawsuit on the 16th against the Trump administration's decision to increase H-1B visa fees, claiming that Trump overstepped his authority in modifying a Congress-approved program.

The organization, which has been around for over a century, is based in Washington and represents the interests of more than 3 million U.S. businesses and trade associations, 96% of which are small businesses with fewer than 100 employees.

Trump stated that the $100,000 visa fee aims to curb abuse of the program and ensure that only high-value talent is hired. White House aides defended the move, saying that the current batch of H-1B visa holders are not the kind of talent needed to build advanced factories, but rather low-skilled workers such as software engineers. They also noted that there are other visa programs available for truly exceptional workers.

There are also contradictions in terms of funding: Trump often boasts about the billions of dollars in investments announced by companies in the U.S. since he took office, but his team's fiscal hawks simultaneously cut projects that could further stimulate investment.

For companies trying to make long-term plans, they may lose incentive measures before breaking ground on new projects due to the uncertainty of subsidies.

This tension also extends to within the government, as the White House Office of Management and Budget (OMB) ordered a comprehensive suspension and review of federal grants and loans this year, injecting new uncertainty.

For example, the Department of Energy recently announced the termination of over 300 clean energy projects worth more than $7.5 billion, citing that these projects "did not sufficiently advance national energy needs, were not economically viable, and could not provide a positive return on taxpayers' investments." Companies also complained that subsidies for other critical minerals and rare earth elements have stalled.

White House officials responded that these are "necessary adjustments" to long-standing federal grant programs and emphasized that "a few suspended projects" do not represent the government's lack of support for the development of domestic rare earth and critical minerals.

Although U.S. unions, like Trump, hope to rebuild the U.S. manufacturing base, they are increasingly dissatisfied with the lack of clear plans.

The AFL-CIO, the American Federation of Labor and Congress of Industrial Organizations, supports protective tariffs, but says the Trump administration's piecemeal approach has caused a lot of confusion in the industry, and people don't know which "America First" policy to plan around.

"What we need is a coherent strategy," said Kathy Fingold, director of international affairs at the organization. "We need to know how to access the critical minerals needed for the manufacturing sector to remain competitive. We need a clear vision, with defined sources of funding, how tariffs will be reinvested, and a real baseline for workers in this country to live with dignity and compete in the global economy."

"But the current policy environment is very chaotic," she added. "Tariffs alone cannot accomplish this task."

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