Tariffs Aren’t Producing a Surge of Foreign Investment

On the campaign trail, the Felon promised the MAGA base that he would lower consumer prices on "day one" and rebuild America's manufacturing base (ignoring, of course the work the Biden administration had done on the latter issue).  Indeed, one of the supposed reasons for the Felon's on again, off again tariffs and attacks of foreign trading partners is that the Felon has wrongfully claimed the tariffs will supposedly cause foreign investment in the USA to surge and, in the process, help  restore the nation's diminished manufacturing base.  As a piece in Politico lays out, so far the promised surge in investment is not happening and/or much of the new investment was under way before the Felon took office.  Why?   Largely because of (i) the economic uncertainty created by back and forth changes to tariff levels, (ii) the prospect of continued high interest rates, and (ii) and, I suspect, the unsettling fall out from the Felon's rants on Truth Social (a totally misnamed platform) that underscores the reality that "policy" under the regime depends on the shifting whims of the Felon.   Here are article highlights:

Donald Trump has claimed his surge of new tariffs will produce trillions of dollars of foreign investments in the U.S. economy. But some of the people working to lure those investments to U.S. cities and states say they’re not seeing the investment boom, at least not so far.

To the contrary, economic development officials and lawmakers from several states say that the uncertainty fueled by Trump’s on-again, off-again trade wars is keeping many foreign businesses from pouring money into the U.S. market right now. And it signals the uneven impact the tariffs are having on reshoring American manufacturing — Trump’s stated goal for raising rates to the highest levels in a century.

Buffeted by news of companies raising prices as a result of the president’s dramatic tariff increases, the Trump administration has made economic development pledges a centerpiece of its messaging strategy. As businesses across the country fret over the administration’s global trade war, the White House has responded by releasing a running list of billion-dollar commitments from major companies, a sign, the president and his aides argue, that his economic strategy is working by forcing more companies to build their products in the U.S.

The White House, however, is indiscriminate about what announcements it claims come from “the Trump effect.” Some have been in the works for years before they are announced. Others are in line with what the company would have invested, regardless of the tariffs. Some are inflated, adding previous investments to new pledges.

The reality for economic developers is more complicated. Officials work for years building relationships that can one day, hopefully, translate into hundreds, or even thousands, of well-paying jobs. . . . . “These are large investments that businesses are making and they’re going to do them thoughtfully and they’re going to take time,” said Barbara Coffee, the director of economic initiatives for the City of Tucson, Arizona. “When they’re doing site searches, just to determine the location, it takes years, two and three years.”

While a favorite benchmark for both Democratic and Republican lawmakers alike, economic development pledges are notoriously difficult to pin down. Companies sometimes fail to follow through with the plan, or spread out the investment over a longer period of time depending on economic circumstances. Congress even passed a law in 1995 that encourages businesses to put a disclaimer on news releases about investment decisions, saying that they are subject to change.

The Trump administration has been so eager to show signs of economic growth that it has celebrated companies that are merely “considering” increasing production in the United States. . . . . But those announcements may conceal the economic reality. Even as the administration has touted decisions from auto companies like Honda and Stellantis to move production to the U.S., auto manufacturing jobs are down 20.8 percent from 2024, according to the Bureau of Labor Statistics. Auto manufacturing jobs fell 4.7 percent between March and April, when Trump’s 25 percent tariffs on foreign auto imports went into effect.

Other industries are watching the domestic economic and political climate as well. Despite a $50 billion investment pledge, Roche, a pharmaceutical company, said it was evaluating that pledge after Trump issued an executive order aimed at driving down drug prices. . . . . should the EO go into effect, the business reality is that the pharma industry would need to review its expenses, including investments.”

The sense of economic uncertainty has unsettled lawmakers from both political parties. While Sen. Ron Johnson (R-Wisc.) has thus far been unwilling to sign onto legislation to remove Trump’s power to impose tariffs or implement trade deals unilaterally, Johnson said Wednesday at a POLITICO Live event that he’s concerned about how uncertainty surrounding tariffs is affecting businesses in his state.

“What I’m hearing from Wisconsin businesses, manufacturers, the National Association of Manufacturers, The Business Roundtable, is right now investment is on hold,” said Johnson. “Again. I come from the private sector. You want as much certainty and stability” as possible.

Still, investments are projected to slow in 2025, according to industry analysts. The consulting firm Deloitte projected that investments would slow slightly from 3.7 percent 2024, before picking up significantly once the upheaval produced by the administration’s trade and tax policy fades.

That’s a hopeful sign for local officials like Lilley, who’s eager to bring more jobs to North Carolina’s growing population.

Don't expect certainty to return anytime soon. 

 

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Trump Is Destroying America's "Soft Power"

Since taking office in January, the Felon has trashed America's reputation abroad through insane - and likely illegal - tariffs that have alienated longtime allies and trading partners, the slashing of foreign humanitarian aid that has left desperately needed food rotting in warehouse (see the image), attacks on NATO and Europe in general, cozying up to dictators and tyrants as on his recent Middle East trip, and  gutting agencies that have promoted American values for decades.  All of this has severely damaged, if not destroyed, America's so-called soft power abroad and even resulted in America being seen as a negative influence by citizens of former long time allies.  The biggest winner in all of this has been China which is stepping into the void left by American withdrawal and abandonment of millions of desperate men, women and children across the globe, but particularly in Africa.  Also benefiting is Russia which can now point to the unreliability of America as an ally and protector. The MAGA base cheers on the misogyny and congressional Republicans do nothing to assert their authority and insist that funding by Congress be used as designed.  Felon has made it crystal clear that democracy and human rights, anti-corruption, and basic decency no longer matter in America's foreign policy. A column in the New York Times looks at this depressing and dangerous situation:

In the late 1980s, Joseph Nye, the Harvard political scientist who died this month, developed the concept of “soft power.” His central premise, that the United States enhances its global influence by promoting values like human rights and democracy, has guided U.S. foreign policy for decades across both Republican and Democratic administrations.

Donald Trump has made clear that he fundamentally rejects this vision. As president, he has ordered a sweeping overhaul of the State Department that will cripple its capacity to promote American values abroad. At the center of this effort are drastic cuts to the Bureau of Democracy, Human Rights and Labor — the State Department’s core institution for advancing soft power, which I led under President Barack Obama. Unless Congress intervenes, the debasement of the bureau’s role will impair America’s ability to challenge authoritarianism, support democratic movements and provide independent analysis to inform U.S. foreign policy. The long-term result will be a United States that is weaker, less principled and increasingly sidelined as authoritarian powers like Russia and China offer their own transactional models of global engagement.

The Bureau of Democracy, Human Rights and Labor was created with bipartisan congressional support in 1977, a time when lawmakers sought greater influence over foreign policy in the aftermath of the Vietnam War and America’s support for authoritarian regimes in countries like Chile and South Korea. President Jimmy Carter’s religious convictions and deep commitment to human rights gave the fledgling bureau early momentum. Still, its purpose was always practical: to ensure U.S. foreign aid and trade decisions were informed by credible assessments of human rights conditions around the world.

Many State Department traditionalists viewed its focus on human rights as an unhelpful distraction from the realpolitik topics they were much more comfortable addressing. It also drew criticisms of hypocrisy, mostly from the left, for condemning the records of other countries in the face of unresolved human rights problems here in the United States. Others accurately pointed out that even as the State Department’s human rights reports documented serious abuses, the United States continued to provide substantial aid to governments like Ferdinand E. Marcos’s Philippines, Mobutu Sese Seko’s Zaire, Hosni Mubarak’s Egypt and numerous military regimes across Latin America.

But over nearly five decades, the bureau has evolved to confront them. Governments, companies, judges and nongovernmental organizations have all come to rely on its annual country reports. It plays the lead role in preventing the United States from funding foreign security forces that violate human rights. And its policy engagement has guided the U.S. approach to international conflicts, repressive regimes and civil wars.

That progress is now at risk. The Trump administration’s proposed “reforms” will hamstring my former agency’s capacity to uphold its mission in three major ways.

First, under the guise of what Secretary of State Marco Rubio calls streamlining, the administration plans to eliminate two offices, one that oversees grants, the other focused on promoting internet freedom in closed societies and on championing human rights in corporate conduct and international bodies like the United Nations. . . . . While modest streamlining might make sense, these sweeping cuts will severely compromise Democracy, Human Rights and Labor’s ability to act as a counterweight to regional State Department bureaus and U.S. embassies, which by design give precedence to diplomatic relationships over human rights. . . . It will also undermine the government’s ability to act when opportunities for human rights progress arise.

Second, the Trump administration’s plan will significantly narrow the scope of the annual human rights reports. This year’s reports will no longer include sections on freedom of assembly, free and fair elections, gender-based violence, arbitrary or unlawful interference with privacy, or violent crimes targeting vulnerable populations. The administration has not offered any justification for deleting these sections, which will deprive the entire world of important information about human rights abuses.

Finally, the Trump administration’s proposed restructuring will eliminate the Human Rights and Democracy Fund, the primary funding source for the bureau’s democracy promotion programs, which provide a lifeline to embattled human rights defenders worldwide.

. . . . . Mr. Rubio is slated to testify before the Senate Foreign Relations Committee. Lawmakers from both parties need to stand up to him and demand that the State Department continue to support the Bureau of Democracy, Human Rights and Labor, which is an essential engine of soft power in U.S. foreign policy. It is in our long-term national interest that they stop it from burning out.

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NOAA Is Struggling As Hurricane Season Nears

The Felon's regime with the aid of Elon Musk's unthinking "chainsaw" attacks on federal agencies have wreaked havoc on the safety of everyday Americans as medical research funding has been slashed, clean air and clean water regulations are erased, food safety inspections  have been curtailed in some instances, and important information is purged from federal websites.  In addition, NOAA has been savaged by cuts to funding and the departure of hundreds of employees - just as we approach the 2025 hurricane season.  Living on the Atlantic coast - and previously on the Gulf of Mexico coast - and having lived through a number of hurricanes, I am only too aware of the need for timely and accurate forecasts, things many fear will not be provided by a savaged NOAA and hurricane center.  Indeed, the ax taken to NOAA could literally cost lives, not that the Felon or Musk care, and could well threaten inland regions as Hurricane Helene underscored last year.  Ironically, the red states of Florida, Alabama, Mississippi, Louisiana and Texas could pay the highest prices resulting from a diminished NOAA and less accurate forecasts and lack of coordination with local forecasters. A piece at Politico looks at NOAA's weakened situation.  Here are excerpts:

Vacancies at the National Oceanic and Atmospheric Administration are raising fears among current and former agency officials and Democrats that cuts to the federal workforce have left the country with too few experts to help prepare for weather disasters ahead of the looming Atlantic hurricane season.

POLITICO first reported on Wednesday that NOAA posted 155 job openings at the National Weather Service, the public safety agency whose regional offices make up the nation’s first line of defense for imminent storms and disasters. . . . . NOAA managers are pleading with employees in emails to pursue reassignments to fill those jobs, which in many cases would amount to demotions.

“There appears to be a panic level on the part of the department to try and undo the damage they’ve done to the weather service.”

The vacancies are mostly for meteorologists who embed in local offices scattered throughout the country and coordinate with local officials like mayors and emergency managers to provide timely information for storm preparation, helping reduce loss of life and property.

NWS is also backfilling crucial roles like hydrologists and information technology specialists who help fine tune radar systems, said Tom DiLiberto, a former NOAA official who spoke at the Wednesday event. Those functions are essential for events like the hurricane season that officially begins June 1, DiLiberto said.

“We’re not prepared. We’re heading into hurricane season as unprepared as anytime as I can imagine,” he said.

Five former NWS chiefs said in an open letter earlier this month that the Trump administration’s cuts could lead to “a needless loss of life.” They said offices are so thinly staffed that some roles will have to be filled on a part-time basis. The former NWS directors said 250 employees were fired or took buyouts in February, and another 300 have since departed.

The Federal Emergency Management Agency has also endured layoffs and curtailed or cut disaster response programs.

“This is not fear mongering. These are challenges by design, by the actions of the Trump administration,” Rep. Gabe Amo (D-R.I.) said. “We know that there’s a likelihood of a very intense [hurricane] season. So why would we put ourselves in a position to not be the most prepared possible?”

DiLiberto said Trump’s actions will also further obscure climate-driven dangers. NOAA recently shuttered its database of disasters that cause at least $1 billion of damage, taking a key public resource offline. DiLiberto said datasets tracking polar sea ice in the Arctic and greenhouse gases at NOAA are also under threat.

“The Trump administration takes an axe to NOAA, whose mission is to protect the American people and their livelihoods,” he said. “NOAA is in trouble.”