How the election will affect manufacturing
Tuesday, October 20, 2020
Manufacturing is a crucial issue for the 2020 election. According to a Morning Consult column, this was supposed to be the year of the manufacturing election. Both Biden and Trump have revealed plans to revive the economy and the manufacturing sector. The latter is directly proportional to the well-being of the former.
However, when Morning Consult made that prediction, in February, it had a robust and running industry in mind. But then came COVID-19 and lockdowns that brought entire industries to a halt. Yet, manufacturing remains a pivotal factor.
The Morning Consult column referenced a study finding that nine in 10 voters believe manufacturing is critical to economic revival. Months after the disruption wrought by COVID-19, those views are as strong as ever.
Each presidential candidate has proclaimed to bring about political and economic stability. To do so, they will have to overcome an unprecedented pandemic, usher in an era of domestic manufacturing jobs, and establish sound international trade policies.
Some of the key election issues for manufacturers are:
- Creating and training a skilled workforce to match the digitization of the industry
- Encouraging companies to invest in R&D with less red tape and tax credits
- Help manufacturers navigate the complex international trading environment
- Incentivize companies to digitize on their own like their international counterparts
- Bring about digital transformation and agile supply chain resiliency
- Immigration reform and employment-based visa categories to develop a diverse and talented workforce
- Permanent pro-growth provisions in the tax code and continual assessment of the competitiveness of the U.S. tax system
Most local manufacturers want the next president to focus on coronavirus recovery. Next, they want to bridge the skills gap, workforce development, provide better healthcare, and fix aging infrastructure.
Diversifying the talent pipeline is essential to sustain the evolving manufacturing landscape. A study by Deloitte and The Manufacturing Institute stated that the sector would need 4.6 million workers by 2028.
Both candidates plan to spend on infrastructure during the next four years. Improving aging infrastructure would benefit manufacturing to a certain extent.
Biden's manufacturing plan involves tax credit for businesses that bring back manufacturing jobs by revitalizing a closed or existing factory. He also mentioned a penalty tax on foreign earnings. Trump announced a tax credit for companies that bring back jobs from China. He pledged no federal contracts for companies that outsource to China.
Economists agree the next administration has a crucial role to play in the future of U.S. manufacturing. Biden's plans also include investing in vocational training. He is encouraging partnerships between employers and community colleges. The Trump administration is creating incentives for private-level apprenticeships.
One thing both candidates agree upon is the difficulty of maintaining a trade relationship with China. They are equally concerned about the rise of China as a formidable rival in trade. However, their approach to international trade is vastly different.
Trump likes to make discrete trade deals between smaller parties. Biden favors trade agreements where a coalition between the U.S. and a larger group of countries can be built. This would lead to more comprehensive trade rules. Economists feel that the coalition-based trade philosophy improves access for small manufacturers. They can bypass the complex web of trade relationships with each country this way.
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