Looks like the proverbial sh.. is about to hit the fan - wondern for whom the Harley workers will vote for at the next election:

Fair use excerpt:

Harley-Davidson, up against spiraling costs from tariffs, will begin shifting the production of motorcycles headed for Europe from the U.S. to factories overseas. "Harley-Davidson maintains a strong commitment to U.S.-based manufacturing which is valued by riders globally," the company said in prepared remarks. "Increasing international production to alleviate the EU tariff burden is not the company's preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe. Europe is a critical market for Harley-Davidson."

Harley-Davidson sold almost 40,000 motorcycles in the Europe Union last year, generating revenue second only to the United States, according to the company.

https://www.cnbc.com/2018/06/25/harley- ... -cost.html

Harley is hit twice by this tariff crap - first for importing aluminium into the US to build those bikes and then for exporting the bikes to Europe. No surprise that they simply move production for the European market out of the US.

Smart, Maybe they will make more money.

As Mr Trump said to european carmakers.... build them here

Well, unlike Harley Davidson, they already build cars in the US....

Actually, BMW's Spartanburg, SC, plant is the biggest BMW plant world-wide, production is 1.900 cars each day (which equates almost 700.000 per annum). I have driven two BMWs in Germany that were produced in the US.

#MAGA

Manufacturing jobs are up 322,000 under Trump. While the impact of tariffs still needs to play out, those of you doing a victory dance over this single data point are letting your partisan hackery show.

So increase the tariffs on European products, if they hinder the success of an American company. No more BMW on American streets.

vfw614 wrote:

Well, unlike Harley Davidson, they already build cars in the US....

Actually, BMW's Spartanburg, SC, plant is the biggest BMW plant world-wide, production is 1.900 cars each day (which equates almost 700.000 per annum). I have driven two BMWs in Germany that were produced in the US.

Also the biggest US car exporter iirc.

VTKillarney1 wrote:

Manufacturing jobs are up 322,000 under Trump. While the impact of tariffs still needs to play out, those of you doing a victory dance over this single data point are letting your partisan hackery show.

Which is the number one would expect as a continuation of the trend since January 2010.

The *shocker* in that number is that those increased numbers come with decreased productivity, which seems to indicate that US manufacturing is expanding US output via manpower, not via investments in new, more efficient equipment and automation, and have stopped doing so a while back as that stuff has lead times. Productivity was down 1.2% in 1st Q18. That means only 170k new jobs to increase output, or 1.3% on the 13 mil manufacturing jobs.* That is below GDP growth and therefore a further shrink of the US manufacturing sector, output there is growing, but too slow to argue there is a changing trend.
https://fred.stlouisfed.org/series/OUTMS

Best regards
Thomas

*forget that, productivity is just 1q18, but I guess your job number is since Trump took office. However that doesn't change the rest of the argument

tommy1808 wrote:

vfw614 wrote:

Which is the number one would expect as a continuation of the trend since January 2010.

Exactly my point. The sky hasn’t fallen.

Richard28 wrote:

VTKillarney1 wrote:

Manufacturing jobs are up 322,000 under Trump. While the impact of tariffs still needs to play out, those of you doing a victory dance over this single data point are letting your partisan hackery show.

322,000 jobs is also a single data point, no?

No. Multiple points make up that number.

VTKillarney1 wrote:

Manufacturing jobs are up 322,000 under Trump. While the impact of tariffs still needs to play out, those of you doing a victory dance over this single data point are letting your partisan hackery show.

322,000 jobs is also a single data point, no?

Harley already produces outside of the US. The thing is that instead of investing in domestic production, they will now be looking at boosting production in foreign factories.

This is an anecdotic story so far, but probably indicative of how Trump's trade war will play out on the larger scale.

No one wins a trade war... This has been proven over and over. Free and open trade is beneficial for all parties involved.

VTKillarney1 wrote:

tommy1808 wrote:

vfw614 wrote:

Which is the number one would expect as a continuation of the trend since January 2010.

Exactly my point. The sky hasn’t fallen.

True, but I wanted to point out that while the sky is still where it belongs, but the trend of the continuing shrimking of US manufacturing has not changed and the apparent lack of investment is worrisome, as there are basically just two reasons to prefer hire (=people) over buy (=equipment).
Not believing the boom will last enough to make the investment worth its while, or not wanting to invest in the current location because those jobs are likely to go abroad before it would pay off. Both are bad. And that is before the effects of tariffs. Those things can compound quite quickly. Not time to panic of course, but certainly time for caution.
For a company like HD it is quite a datapoint considering they have entertain at least the possibility of some repercussions from parts of their US fan base with a cooling effect on sales.

Best regards
Thomas

Francoflier wrote:

No one wins a trade war... This has been proven over and over. Free and open trade is beneficial for all parties involved.

Yet another inconvenient truth that the current US administration and its supporters will never acknowledge.

Revelation wrote:

Francoflier wrote:

No one wins a trade war... This has been proven over and over. Free and open trade is beneficial for all parties involved.

Yet another inconvenient truth that the current US administration and its supporters will never acknowledge.

Many Republicans have. But they are afraid of Trump.

tommy1808 wrote:

True, but I wanted to point out that while the sky is still where it belongs, but the trend of the continuing shrimking of US manufacturing has not changed and the apparent lack of investment is worrisome, as there are basically just two reasons to prefer hire (=people) over buy (=equipment).
Best regards
Thomas

Perhaps if POTUS is able to get US companies to relocate funds held in offshore banks back to the US with limited tax penalties, domestic investment could pick up, unfortunately, the countries where those funds are presently domiciled are probably going to kick up a fuss.

Francoflier wrote:

No one wins a trade war... This has been proven over and over. Free and open trade is beneficial for all parties involved.

Still waiting for the day when Free and Open trade will rear its good head, when you consider what hoops you have to jump thru can it really be called free and open, or is it just controlled in the back rooms hidden by the cigar smoke not visible to the public?

I'm surprised by this announcement to be honest, and worried. It means Harley has no confidence in the administration coming to its senses.

I'm also wondering if it's even feasible to sell EU made Harley's, here their fans can't speak two words of English but they love the US for some reason, I don't think they would like their ride to be made elsewhere than the US.

par13del wrote:

tommy1808 wrote:

True, but I wanted to point out that while the sky is still where it belongs, but the trend of the continuing shrimking of US manufacturing has not changed and the apparent lack of investment is worrisome, as there are basically just two reasons to prefer hire (=people) over buy (=equipment).
Best regards
Thomas

Perhaps if POTUS is able to get US companies to relocate funds held in offshore banks back to the US with limited tax penalties, domestic investment could pick up, unfortunately, the countries where those funds are presently domiciled are probably going to kick up a fuss.

Make a fuss about what ? If that money is there it's because they're fiscal paradises.

The three high profile goods hit by EU tariffs are Harley Davidsons motorbikes, Bourbon and jeans. While I understand the rationale behind the first two - built or produced in Trump leaning US states - I struggle with jeans. Is a significant number of jeans still produced in the US? My hunch has always been that jeans are produced in places like Banglasdesh, Pakistan etc. and this "American blue jeans" label is merely a marketing exercise.

vfw614 wrote:

The three high profile goods hit by EU tariffs are Harley Davidsons motorbikes,

Is it just the EU at this point, or also China/Canada/others? I've lost track who has targeted HD.

Francoflier wrote:

Harley already produces outside of the US. The thing is that instead of investing in domestic production, they will now be looking at boosting production in foreign factories.

In India and Brazil of all places.

It wouldn’t surprise me if they are using tariffs as a cover for a pre-existing plan. Surely making motorcycles in India and Brazil is a whole lot cheaper, tariffs or no tariffs.

Funny to see who is not posting in this thread.


Most of these trade wars are a really stupid idea. Duh.

vfw614 wrote:

The three high profile goods hit by EU tariffs are Harley Davidsons motorbikes, Bourbon and jeans. While I understand the rationale behind the first two - built or produced in Trump leaning US states - I struggle with jeans. Is a significant number of jeans still produced in the US? My hunch has always been that jeans are produced in places like Banglasdesh, Pakistan etc. and this "American blue jeans" label is merely a marketing exercise.

That is sad and shows how little you know about the subject when your first defense is "think of the tRump voters!"

I read Sonny Barger's autobiography. For those who don't know he was one of the founders of the Hells Angels - he was the archetype of the badass American biker. He admitted he now rode Hondas, said Harleys didn't have the workmanship of Hondas and were junk. Thus I was surprised to see that Harleys are big sellers in Europe with the BMWs, and Ducatis, you can get locally.

par13del wrote:

Francoflier wrote:

No one wins a trade war... This has been proven over and over. Free and open trade is beneficial for all parties involved.

Still waiting for the day when Free and Open trade will rear its good head, when you consider what hoops you have to jump thru can it really be called free and open, or is it just controlled in the back rooms hidden by the cigar smoke not visible to the public?

Sorry, I'm not quite sure what you're alluding to.

It seems this news is largely old and already known.

Back in April the CEO stated due prolonged sales slump of bikes in the US (down 12 percent in 2017) it was closing a plant in Missouri and instead built one in Thailand to serve that regions boom.

It appears now this Thai plant will produce units sold in the EU to avoid the near EUR2000 tax applied.

Seems like good outcome for EU customers and the company.

Aesma wrote:

par13del wrote:

tommy1808 wrote:

True, but I wanted to point out that while the sky is still where it belongs, but the trend of the continuing shrimking of US manufacturing has not changed and the apparent lack of investment is worrisome, as there are basically just two reasons to prefer hire (=people) over buy (=equipment).
Best regards
Thomas

Perhaps if POTUS is able to get US companies to relocate funds held in offshore banks back to the US with limited tax penalties, domestic investment could pick up, unfortunately, the countries where those funds are presently domiciled are probably going to kick up a fuss.

Make a fuss about what ? If that money is there it's because they're fiscal paradises.

Much cheaper for US companies to issue bonds and keep the funds abroad that virtually any tax present can be.

VTKillarney1 wrote:

It wouldn’t surprise me if they are using tariffs as a cover for a pre-existing plan. Surely making motorcycles in India and Brazil is a whole lot cheaper, tariffs or no tariffs.

for sure, so far this is a trade spat that could be over in a few weeks, no one makes 20 years+ decisions based on that.

vfw614 wrote:

The three high profile goods hit by EU tariffs are Harley Davidsons motorbikes, Bourbon and jeans. While I understand the rationale behind the first two - built or produced in Trump leaning US states - I struggle with jeans. Is a significant number of jeans still produced in the US? My hunch has always been that jeans are produced in places like Banglasdesh, Pakistan etc. and this "American blue jeans" label is merely a marketing exercise.

There are still a dozen or so Jeans brands that manufacture in the US. By value that is fairly labor intensive business, so tariffs on those has a fairly high employment effect.

best regards
Thomas

csavel wrote:

I read Sonny Barger's autobiography. For those who don't know he was one of the founders of the Hells Angels - he was the archetype of the badass American biker. He admitted he now rode Hondas, said Harleys didn't have the workmanship of Hondas and were junk. Thus I was surprised to see that Harleys are big sellers in Europe with the BMWs, and Ducatis, you can get locally.

The sort of person who rides a Harley is not going to be buying a BMW or Ducati.

Kiwirob wrote:

csavel wrote:

I read Sonny Barger's autobiography. For those who don't know he was one of the founders of the Hells Angels - he was the archetype of the badass American biker. He admitted he now rode Hondas, said Harleys didn't have the workmanship of Hondas and were junk. Thus I was surprised to see that Harleys are big sellers in Europe with the BMWs, and Ducatis, you can get locally.

The sort of person who rides a Harley is not going to be buying a BMW or Ducati.

Or any of the Chinese/Korean knockoffs that used to be more or less visible for a few years.

I do know someone that changed to a Triumph after his 3rd HD, because they were too mainstream for his liking. The guy is working on a Dnipro bike now.

VTKillarney1 wrote:

Manufacturing jobs are up 322,000 under Trump. While the impact of tariffs still needs to play out, those of you doing a victory dance over this single data point are letting your partisan hackery show.

What type of jobs are created in that 300k group of "new job holders" ( qualified, unqualified, minimum wage or higher up the ladder ) ?

tommy1808 wrote:

Aesma wrote:

par13del wrote:

Perhaps if POTUS is able to get US companies to relocate funds held in offshore banks back to the US with limited tax penalties, domestic investment could pick up, unfortunately, the countries where those funds are presently domiciled are probably going to kick up a fuss.

Make a fuss about what ? If that money is there it's because they're fiscal paradises.

Much cheaper for US companies to issue bonds and keep the funds abroad that virtually any tax present can be.

VTKillarney1 wrote:

It wouldn’t surprise me if they are using tariffs as a cover for a pre-existing plan. Surely making motorcycles in India and Brazil is a whole lot cheaper, tariffs or no tariffs.

for sure, so far this is a trade spat that could be over in a few weeks, no one makes 20 years+ decisions based on that.

vfw614 wrote:

The three high profile goods hit by EU tariffs are Harley Davidsons motorbikes, Bourbon and jeans. While I understand the rationale behind the first two - built or produced in Trump leaning US states - I struggle with jeans. Is a significant number of jeans still produced in the US? My hunch has always been that jeans are produced in places like Banglasdesh, Pakistan etc. and this "American blue jeans" label is merely a marketing exercise.

There are still a dozen or so Jeans brands that manufacture in the US. By value that is fairly labor intensive business, so tariffs on those has a fairly high employment effect.

best regards
Thomas

Your last remark is a general truth and immediately also the main weakness of Mr. Trump's economic strategy.

As a real businessman he's obsessed with the VALUE of the trade deficit, but he forgets one thing: PRODUCTIVITY.

Due to a decade long underinvestment in the US economy, which in turn is due to both the obsession of shareholders with maximizing immediate return as well as the abundance of relatively cheap labor, the US economy now needs significantly more manhours to produce a same value of goods than the EU's economy does, so when Mr. Trump want to rebalance the trade deficit the US runs with the EU, guess who'll lose in the end? Indeed: the American worker.

Think of it this way:
the US kicks out all of company's A imports to the US, valued at X amount of money: 1.000 jobs lost in the EU.
The EU retaliates by kicking out goods for the same value imported from the US: 1.100 people in the US loose their job.
If the EU choses wisely -as it seems to be doing- it can even maximize damage further and hurt 1.200 or more jobs!
No wonder you see US companies blink first. Wonder how long it will take for Mr. Trump to start hitting out to corporate America for not sticking with him long enough...

The problem the USA has today is NOT that is has unfavorable trade deals with basically everybody in the whole wide world; its economy main problem today is a too low productivity which makes it uncompetitive!
The US should stimulate shareholders to invest much more in the long term efficiency of their companies, rather than reward them for their shortsightedness and their obsession with improving the next financial report further (and the subsequent bonus for the management, dividend for the shareholder), while it should start to incrementally introduce some form of minimum wage to further stimulate investment in further efficiency gains, combined with an overhaul of the education system to make sure the people who come out of schools and don't make it to university can still take on jobs which require a minimum of knowledge, understanding and skills, because the days you actually needed people doing nothing but packing stuff in are long over everywhere but in the US: however, they'll need to know how to operate machines doing the packing for them!

Never wondered why within the EU -which is much more than just a free trade zone like NAFTA- countries like Germany for instance can successfully compete even on manufacturing with cheap labour places like Bulgaria?

seb146 wrote:

vfw614 wrote:

The three high profile goods hit by EU tariffs are Harley Davidsons motorbikes, Bourbon and jeans. While I understand the rationale behind the first two - built or produced in Trump leaning US states - I struggle with jeans.

That is sad and shows how little you know about the subject when your first defense is "think of the tRump voters!"

The EU has made no secret of the fact that a lot of the tariffs are also of a symbolic nature. The could have chosen literally any good, but they went for

Bourbon -> Kentucky -> Mitch McConnell
Harley -> Wisconsin -> Paul Ryan
Orange Juice -> Florida -> criticial swing state

in order to put pressure on important lawmakers.

McConnell is already ringing alarm bells: https://www.apnews.com/9014f8128c324f77976852b875ef040d

vfw614 wrote:

seb146 wrote:

vfw614 wrote:

The three high profile goods hit by EU tariffs are Harley Davidsons motorbikes, Bourbon and jeans. While I understand the rationale behind the first two - built or produced in Trump leaning US states - I struggle with jeans.

That is sad and shows how little you know about the subject when your first defense is "think of the tRump voters!"

The EU has made no secret of the fact that a lot of the tariffs are also of a symbolic nature. The could have chosen literally any good, but they went for

Bourbon -> Kentucky -> Mitch McConnell
Harley -> Wisconsin -> Paul Ryan
Orange Juice -> Florida -> criticial swing state

Which i think is stupid. They should identify and go after the businesses the biggest donors and SuperPAC financier make their money with. That would swing Trumps mood rather quickly or swing their money against Trump.

best regards
Thomas

tommy1808 wrote:

vfw614 wrote:

seb146 wrote:

That is sad and shows how little you know about the subject when your first defense is "think of the tRump voters!"

The EU has made no secret of the fact that a lot of the tariffs are also of a symbolic nature. The could have chosen literally any good, but they went for

Bourbon -> Kentucky -> Mitch McConnell
Harley -> Wisconsin -> Paul Ryan
Orange Juice -> Florida -> criticial swing state

Which i think is stupid. They should identify and go after the businesses the biggest donors and SuperPAC financier make their money with. That would swing Trumps mood rather quickly or swing their money against Trump.

best regards
Thomas

https://www.bbc.com/news/business-44366737 <--- the Kochs didn't take much convincing past the word "tariffs"

The Donors are bailing the fastest. It's the cult of Trump that is the problem.

Aesma wrote:

I'm surprised by this announcement to be honest, and worried. It means Harley has no confidence in the administration coming to its senses.

I'm also wondering if it's even feasible to sell EU made Harley's, here their fans can't speak two words of English but they love the US for some reason, I don't think they would like their ride to be made elsewhere than the US.

par13del wrote:

tommy1808 wrote:

True, but I wanted to point out that while the sky is still where it belongs, but the trend of the continuing shrimking of US manufacturing has not changed and the apparent lack of investment is worrisome, as there are basically just two reasons to prefer hire (=people) over buy (=equipment).
Best regards
Thomas

Perhaps if POTUS is able to get US companies to relocate funds held in offshore banks back to the US with limited tax penalties, domestic investment could pick up, unfortunately, the countries where those funds are presently domiciled are probably going to kick up a fuss.

Make a fuss about what ? If that money is there it's because they're fiscal paradises.

We have a literal malignant narcissist running the country. He's not going to admit he's wrong. He keeps doubling down on the most foolish of things. Europe, the US didn't elect a rational man. He's 100% cluster B personality disorder. We should be thankful he's such an idiot, he'd be far more dangerous if he was intelligent.

And the tweets/lies/threats have commenced.

#MAGA

jetero wrote:

And the tweets/lies/threats have commenced.

#MAGA

Which shows the targetted reaction by the EU is yielding almost immediately the effect it wanted: it hurts... not financially, not economically, because all of this is -at present still- just some pinching, but emotionally and thus also politically for Trump: it turns his campaign slogan of MAGA into one big joke right in front of everybody's eyes to see and understand easily: no need for statistics, official figures, or trade deal details: simply WHAM, in his face and the best part of it: de blow is dealt to him by an iconic US manufacturer!

The retributive justice of this is striking. Companies don’t come more “American” than Harley, in all its in-your-face glory.
Trump has held it out as an example of how his tax-cutting and deal-making would Make America Great Again, because they are THE company just waiting to be re-en-Greatened.
But Trump’s moves just keep backfiring on Harley. Before Monday’s announcement, it had already moved some work to Thailand as a result of Trump’s pulling out of the Trans-Pacific Partnership, it had warned profits would take a $100M hit from steel levies this year, and now this. If Trump insists on trade-warring, he should be more careful choosing targets and weapons. Europe will be smartly picking targets to inflict maximum political pain on Trump..

https://www.bloomberg.com/news/articles ... e-casualty

sabenapilot wrote:

The problem the USA has today is NOT that is has unfavorable trade deals with basically everybody in the whole wide world; its economy main problem today is a too low productivity which makes it uncompetitive!

What are you talking about, the US is one of the most high-productivity countries on Earth, and well above the EU average.

http://time.com/4621185/worker-productivity-countries/

zhiao wrote:

sabenapilot wrote:

The problem the USA has today is NOT that is has unfavorable trade deals with basically everybody in the whole wide world; its economy main problem today is a too low productivity which makes it uncompetitive!

What are you talking about, the US is one of the most high-productivity countries on Earth, and well above the EU average.

http://time.com/4621185/worker-productivity-countries/

And WELL above India and Brazil, which makes the claim regarding Harley Davidson all the more perplexing.

VTKillarney1 wrote:

zhiao wrote:

sabenapilot wrote:

The problem the USA has today is NOT that is has unfavorable trade deals with basically everybody in the whole wide world; its economy main problem today is a too low productivity which makes it uncompetitive!

What are you talking about, the US is one of the most high-productivity countries on Earth, and well above the EU average.

http://time.com/4621185/worker-productivity-countries/

And WELL above India and Brazil, which makes the claim regarding Harley Davidson all the more perplexing.

Obvioulsy, it's not all about productivity. If costs are so low, it doesn't matter. Plus, the productivity stat is for the entire economy and not a specific sector.

sabenapilot wrote:

https://www.bloomberg.com/news/articles/2018-06-25/trump-s-trade-war-harley-davidson-s-a-friendly-fire-casualty

just got to like their use of headlines...

"Welcome to Gilead"

best regards
Thomas

zhiao wrote:

sabenapilot wrote:

The problem the USA has today is NOT that is has unfavorable trade deals with basically everybody in the whole wide world; its economy main problem today is a too low productivity which makes it uncompetitive!

What are you talking about, the US is one of the most high-productivity countries on Earth, and well above the EU average.

http://time.com/4621185/worker-productivity-countries/

As you've meanwhile figured out, those are figures for the whole of the economy, including services which are massively distorting the picture and have blinded most people (including Mr Trump). To put it very simple: all the software packs Microsoft are selling increase the GDP of the US for hardly any work at all (it's just an electronic copy downloaded), yet that economic output hides the low output per manhour the US factories in statistics.

Try digging up figures for manufacturing only and you'll see why the US has a much harder time competing against lower cost countries like Mexico, than for instance Germany has in competing against fellow EU low cost country Bulgaria...

The bottom line must make sense for a global manufacturing basis to survive:
( wage per hour x production output per hour ) - transportation costs
Competing with lower wage countries IS possible but you need to be efficient: it doesn't help if you're producing in plants from the 1990s, stocking up goods in warehouses from the 1970s and transporting them along roads and railways from the 1960s...

sabenapilot wrote:

Try digging up figures for manufacturing only and you'll see why the US has a much harder time competing against lower cost countries like Mexico, than for instance Germany has in competing against fellow EU low cost country Bulgaria...

Seems fair to ask if you can provide links or sources for your proposition (and now restatement) that productivity is the problem (one of the problems). I am curious (and I don't doubt that it may be true).

Tugg

Tugger wrote:

sabenapilot wrote:

Try digging up figures for manufacturing only and you'll see why the US has a much harder time competing against lower cost countries like Mexico, than for instance Germany has in competing against fellow EU low cost country Bulgaria...

Seems fair to ask if you can provide links or sources for your proposition (and now restatement) that productivity is the problem (one of the problems). I am curious (and I don't doubt that it may be true).

Tugg

Agreed. The shifting of the burden of proof on this forum is quite frustrating.

Tugger wrote:

sabenapilot wrote:

Try digging up figures for manufacturing only and you'll see why the US has a much harder time competing against lower cost countries like Mexico, than for instance Germany has in competing against fellow EU low cost country Bulgaria...

Seems fair to ask if you can provide links or sources for your proposition (and now restatement) that productivity is the problem (one of the problems). I am curious (and I don't doubt that it may be true).

Tugg

The OECD keeps quite a lot of data. http://www.oecd.org/sdd/productivity-st ... ntries.htm

Or here: https://data.oecd.org/lprdty/gdp-per-hour-worked.htm

Keep in mind that is per working hour, not per USD wages.

Best regards
Thomas

You guys have to give me a minute to provide a good link, please!

If you want an in depth analysis on the productivity problem the US economy is facing and which I've tried to scetch very briefly above, read this longread:
https://www.bloomberg.com/view/articles ... ivity-myth
Even if you don't read it, just look at the graphs: mostly stagant, except for computer and electronics.
People in the US work hard, really hard, and often make much longer hours and days than we in western Europe do, yet they still pretty much have to work like in the 1990s and that's essentially the problem: high time to invest in infrastucture, innovation and education, rather than in tax cuts which will only aggravate the trade imballance really.

Alternatively, use the second link provided by Tommy and compare the US productivity (growth) with that of both the whole of the EU as well as the euro(currency)zone to see how the US is lagging...
Verry telling graph, but I can't post sceenshots right now, sadly.

sabenapilot wrote:

zhiao wrote:

sabenapilot wrote:

The problem the USA has today is NOT that is has unfavorable trade deals with basically everybody in the whole wide world; its economy main problem today is a too low productivity which makes it uncompetitive!

What are you talking about, the US is one of the most high-productivity countries on Earth, and well above the EU average.

http://time.com/4621185/worker-productivity-countries/

As you've meanwhile figured out, those are figures for the whole of the economy, including services which are massively distorting the picture and have blinded most people (including Mr Trump). To put it very simple: all the software packs Microsoft are selling increase the GDP of the US for hardly any work at all (it's just an electronic copy downloaded), yet that economic output hides the low output per manhour the US factories in statistics.

Try digging up figures for manufacturing only and you'll see why the US has a much harder time competing against lower cost countries like Mexico, than for instance Germany has in competing against fellow EU low cost country Bulgaria...

The bottom line must make sense for a global manufacturing basis to survive:
( wage per hour x production output per hour ) - transportation costs
Competing with lower wage countries IS possible but you need to be efficient: it doesn't help if you're producing in plants from the 1990s, stocking up goods in warehouses from the 1970s and transporting them along roads and railways from the 1960s...

Lets look at actual facts for manufacturing:

https://fas.org/sgp/crs/misc/R42135.pdf

1. USA number 2 in world in manufacturing value added
2. Investment in Manufacturing Fixed Capital as Share of GDP is HIGHER in USA vs France, NL, Uk, and therefore most EU nations. Germany is higher, I agree.This goes directly to your point about investment in capital.If US invests more in manufacturing capital than most EU nations and therefore the EU, then this directly contradicts what you said.

sabenapilot wrote:

.
Alternatively, use the second link provided by Tommy and compare the US productivity (growth) with that of both the whole of the EU as well as the euro(currency)zone to see how the US is lagging...
Verry telling graph, but I can't post sceenshots right now, sadly.

It shows EU has higher productivity growth between 2010-2016. However, the US was higher between 1990-2010. So your story line of "higher productivity growth" is predicated on you cherry picking very specific years and not looking the very broad picture. Also, who is to say US productivity will not rebound? You do not know that...

In addition, the slowdown in US productivity may in itself be a fiction as proposed by prominent researchers, and may be simply due to mismeasurement of the new high tech economy.

https://voxeu.org/article/productivity- ... -you-think

VTKillarney1 wrote:

And WELL above India and Brazil, which makes the claim regarding Harley Davidson all the more perplexing.

I don't think Harley Davidson has any plans to use oxen in the new plant they intend to build in India.

zhiao wrote:

sabenapilot wrote:

zhiao wrote:

What are you talking about, the US is one of the most high-productivity countries on Earth, and well above the EU average.

http://time.com/4621185/worker-productivity-countries/

As you've meanwhile figured out, those are figures for the whole of the economy, including services which are massively distorting the picture and have blinded most people (including Mr Trump). To put it very simple: all the software packs Microsoft are selling increase the GDP of the US for hardly any work at all (it's just an electronic copy downloaded), yet that economic output hides the low output per manhour the US factories in statistics.

Try digging up figures for manufacturing only and you'll see why the US has a much harder time competing against lower cost countries like Mexico, than for instance Germany has in competing against fellow EU low cost country Bulgaria...

The bottom line must make sense for a global manufacturing basis to survive:
( wage per hour x production output per hour ) - transportation costs
Competing with lower wage countries IS possible but you need to be efficient: it doesn't help if you're producing in plants from the 1990s, stocking up goods in warehouses from the 1970s and transporting them along roads and railways from the 1960s...

Lets look at actual facts for manufacturing:

https://fas.org/sgp/crs/misc/R42135.pdf

1. USA number 2 in world in manufacturing value added
2. Investment in Manufacturing Fixed Capital as Share of GDP is HIGHER in USA vs France, NL, Uk, and therefore most EU nations. Germany is higher, I agree.This goes directly to your point about investment in capital.If US invests more in manufacturing capital than most EU nations and therefore the EU, then this directly contradicts what you said.

I suggest you read the document through carefully, or alternatively just the summary at the beginning....
Very telling and fully in line with what I've been saying: US share in global manufacturing declining not just by the advent of countries like the PRC: US output growth slower than other countries, lower investments in innovation comparted to other countries, eroding relative productivity edge, dropping output per labour hour even (together with the UK, that other country which angrily threw its toys away with Brexit), ...
Yes, the US manufacturing is still strong, but it's facing a real treat of being overwhelmed in future as this report shows once again: closing off the US economy to protect it is not the long term solution: investment, innovation and education is.