Category: Uncategorized

Manno for Forbes: A Virtuous Cycle Of Career Education For Young People

Posted on by Max Sherrill

“Many Gen Z teens don’t feel career ready. What if we made students aware of all of the many options available to them early on, starting in middle school (or even sooner)?”

That’s the challenge for K-12 career education presented by the authors of a report entitled Success Redefined issued by American Student Assistance and Jobs for the Future. The report is based on a Morning Consult poll of over 1,100 high school graduates who opted not to go to college directly after high school.

Nearly one out of three non-college youth (32%) reports a lack confidence in knowing the steps to take to transition into a post-high school career and further education. Two out of three (64%) who did not take career pathway programs say they would have considered pathway programs if they knew more about them.

The barriers to not pursuing pathway programs include a lack of encouragement from those at school to explore them. The preferred sources of information for the post-high school plans of non-college youth were searching the web (87%) and watching online videos (81%).

Keep reading in Forbes.

New PPI Report Warns That Antitrust Can be Doing More to Protect Consumers From Higher Prices and the High Cost of Living

Posted on by Alex Terr

WASHINGTON — High prices for essential goods and services force consumers to make tough choices about what to buy, where to live, and even what bills to pay. Anger around high prices and the high cost of living played a major role in the 2024 presidential election. Disillusionment with the “Bidenomics” agenda fueled a sense of disenfranchisement. Namely, the struggle to afford the necessities that account for most of consumers’ budgets were de-prioritized in favor of proposals to pay off college student loans, green the economy at substantial cost, and other policies that do not ease financial burdens for working class Americans. 

Today, the Progressive Policy Institute (PPI) released a new report, “Can Antitrust Be Doing More to Protect Consumers?,” authored by Diana L. Moss, Vice President and Director of Competition Policy at PPI. Market power is an important contributor to higher prices in critical sectors that make up the bulk of consumer spending. The report unpacks evidence of high market concentration, flagging productivity, market power “bottlenecks,” and lackluster merger control in critical sectors such as housing, transportation, food, insurance, and health care.

“PPI’s findings highlight the need to rethink antitrust priorities to more directly and effectively protect consumers,” said Moss. “We know that antitrust enforcers make hard choices about what cases they pursue. But our analysis shows that enforcement could be doing a better job of championing the interests of consumers. We propose that enforcers prioritize sectors where high prices hit consumers hard in their pocketbooks and drive up their already high cost of living.”

PPI’s analysis highlights the vital role of antitrust — especially stronger and more coordinated merger enforcement — in key sectors that account for the bulk of consumer spending. The report suggests several priorities that would sharpen antitrust priorities and bring it into closer touch with consumers, including:

  • The U.S. antitrust agencies should stop “splitting up” merger reviews for transactions in different parts of the food and health care supply chains. Oversight of all consolidation in these sectors should be assigned to one agency to ensure that competitive dynamics along a supply chain are fully accou
  • The antitrust agencies should revisit policy to approve virtually all retail grocery mergers subject to divestitures. Failed divestitures have unfairly transferred the burden of anticompetitive mergers to consumers through higher food prices. Reversing this damage will require concerted policy action moving forward.
  • The antitrust agencies should consider the impact of harmful consolidation and business practices on the stability and resiliency of supply chains. Consolidation in “intermediary” markets that are prone to market power bottlenecks have not been adequately addressed.
  • Agencies should organize public workshops to deepen their understanding of changes in business models, supply chains, and bargaining power in major consumer-facing supply chains over time.

“Competition is the lifeblood of a healthy market system,” said Moss. “To ensure it thrives, and consumers reap the benefits of competition. We should reevaluate antitrust priorities to provide more direct and effective relief in sectors that have the most impact on their budgets.”

Read and download the report here.

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.

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Media Contact: Ian O’Keefe – iokeefe@ppionline.org

 

29 Haitian garment factories exported 300 million clothing articles to the U.S. last year.

Posted on by Max Sherrill

FACT: 29 Haitian garment factories exported 300 million clothing articles to the U.S. last year.

THE NUMBERS: Haitian GDP (2023) –

Total  $19.6 billion
Remittances from abroad    $3.9 billion
HOPE/HELP exports    $0.8 billion


WHAT THEY MEAN:

In the holiday season, as we’re supposed to think at least a bit about those with less, here’s a useful last job for Congress: extend the U.S.’ three small ‘trade preference’ programs — acronyms “GSP,” “AGOA,” and HOPE/HELP” — for lower-income countries.

As an introduction, here’s an October piece from the International Labor Organization’s “Better Work” office in Port-au-Prince, worriedly entitled “Battling the Odds”. The ILO officers summarize the state of Haitian garment production and employment as follows:

“Throughout 2023 and the first half of 2024, Haiti has faced escalating crises, taking a toll on the nation’s socio-economic health. Gang-related violence is profoundly impacting daily life, with effects spilling over into the labour market, livelihoods and the well-being of workers. The garment industry has been seriously affected. Better Work Haiti’s most recent report delves into the data, revealing a troubling decline in operational factories, with one permanent and two temporary closures. The industry has seen a significant reduction in the workforce, with employment falling from 42,500 to 33,857 in just a few months, a loss of over 8,600 jobs.”

As they were writing up their report in September, “Better Work” was overseeing 29 Haitian garment factories in a handful of industrial parks — Port-au-Prince, Cap Haitien, Ouanaminthe — serving as guarantors for health and safety, wage and benefit, and other labor standards in lieu of a functioning labor ministry.  Last year these factories produced about 300 million garments for American retailers and brands — mostly T-shirts, with some tracksuits, pullovers, and sweatshirts as well. Over the past decade, these factories have earned about $1 billion a year in export revenue, with 2023 shipments a bit lower at $800 million.

The figure, a bit more than 1% of American clothing imports, is about 5% of Haitian GDP. To draw an intellectually shaky but illustrative parallel to the American economy, by BEA’s GDP-By-Industry data, you could combine the GDP shares of U.S. automotive manufacturers and dealerships (1.9%), energy production and refining (1.7%), film and music (0.4%), and air transport (0.6%) to get a similar share. At a personal level, the ILO-regulated apparel jobs as of 2021 (mostly women, often with on-site clinics) made up about a tenth of Haiti’s regular, hourly-wage-paying jobs. Statistics have been scarce since then, but even with falling factory employment the share of formal labor may have been higher earlier this year.

As the ILO’s comment suggests, Haiti’s protracted political crisis has damaged but so far not broken these businesses and their workers. For most of this year, Better Work’s factories were shipping about 800,000 clothing articles to the U.S. daily via the 40-hour boat ride to the Port of Miami, together earning about $50 million a month.

The factories persist because of a special trade program — HOPE/HELP, suitably upbeat acronyms for “Haitian Hemispheric Opportunity through Partnership Encouragement”, and “Haitian Economic Lift Program” — created 20 years ago.  This waives the pricy 16.5% tariff a cotton T-shirt normally gets, and has unusually simple and easy rules for the sorts of fabric factories can use to make the shirt. Last authorized in 2015, HOPE/HELP is scheduled to end in September next year.  So each week the uncertainty about its future prospects grows, and the prospect of its end appears already to be pulling business away. As the ILO’s staffers were writing up their report, one of their factories had shut, and the other two were temporarily closed. This week, only 13 factories appear to be open and producing. So the already substantial worries facing the seamstresses and their employers are growing rapidly more intense.

Now back to Congress, in this session’s last days. Haiti relies more heavily than any other country in the world on American ‘trade preference’ support. Haiti’s is an exceptional case in which loss of trade preference could spark a national economic crisis as well as well as harm to the workers.  But an exceptional case, HOPE/HELP isn’t alone.  The 24-year-old benefit for Africa, the “African Growth and Opportunity Act” — frequently termed the “cornerstone” of U.S.-African economic relations — is also set to expire next year, and the broader “Generalized System of Preferences” has been in a sort of legal limbo since 2020, with renewal serially frustrated by intense arguments over what we see as relatively minor differences in the wording of eligibility criteria, and then by ‘hostage-taking’ on unrelated topics.  Putting off renewal until next year is full of risk: a new Congress with new members unfamiliar with the programs, along with typically slow agency nominations, both make timely renewal hard to imagine and outright lapse fully possible.

These three programs represent a small share of U.S. trade flows: $29 billion in imports in 2023, about 0.9% of the $3.1 trillion in total U.S. imports, and well below the $80 billion from Ireland or the $53 billion from Switzerland. Despite this modest total, HOPE/HELP, AGOA, and GSP remain of great importance to Port-au-Prince’s anxious seamstresses as they “battle the odds” against them — and (via AGOA) to their garment-industry sisters in Maseru, Antanarivo, and Nairobi, and (via GSP) to tuna cannery workers in Honiara, jewelry-makers in Yerevan, and tannery guys in Asuncion. For Congress, a few minutes’ work for the less fortunate, before the Members go home for their own Christmas holidays, would be time well spent.

FURTHER READING


HOPE/HELP, and some context:

ILO’s “Battling the Odds” report, October 2024.

Commerce Department’s Office of Textiles and Apparel explains HOPE/HELP rules.

AGOA and GSP:

PPI on the Generalized System of Preferences.

And the African Growth and Opportunity Act.

Haitian background:

The World Bank on Haitian women in informal work.

Miami-based Haitian Times on remittances from expatriates — construction workers, restaurant dishwashers, professionals — as a second economic lifeline.

And what do “jobs,” “unemployment,” and similar terms mean in this context? World Bank databases say that Haiti’s labor force is about 5.2 million people — 45% in agriculture, 55% urban — with an unemployment rate of 15.7%. These figures suggest totals of 760,000 unemployed workers and 4.3 million with “jobs.” “Unemployment,” though, is a labor-market term invented in the 1880s and designed for wealthy countries in which most workers are in wage-paying jobs subject to national laws and taxes. The term, or at least its commonly understood American definition, doesn’t suit least-developed country realities in general, let alone in crisis. An actual on-the-ground WB report from 2021 guesses that even before the breakdown of government in 2022, 86% of “employed” Haitian workers, or about 4 million people, were in the “informal sector” — that is, doing irregular work in seasonal harvesting, maid and gardening work, day-labor on construction sites, and so on. These would be spottily paid, and not subject to minimum wage or occupational health and safety laws. This implies that about 500,000 Haitian jobs, such as those in the garment industry — 60,000 at the time, fewer now — offer safety inspection, minimum wage laws, and so on. The World Bank’s background on Haiti’s pre-COVID, pre-“gang era” private-sector economy.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

Can Antitrust Be Doing More to Protect Consumers?

Posted on by Max Sherrill

EXECUTIVE SUMMARY

Consumers and the dollars they spend are the backbone of the U.S. economy. For the last several years, consumers have grown frustrated by high prices for basic necessities like housing, food, and health care. Anger around rising prices and a high cost of living played a major role in the 2024 U.S. presidential election. Disillusionment with the “Bidenomics” agenda fueled a sense of disenfranchisement. Namely, consumers’ struggle to afford necessities was put on the back burner in favor of proposals that would benefit elite demographics, not working-class voters.

High prices in consumer-facing sectors that account for the vast bulk of spending are driven by a number of factors: inflation, economic scarcity, opportunistic price gouging, and market power wielded by powerful firms. This report by the Progressive Policy Institute (PPI) takes up the problem of market power, or the ability of powerful firms — rather than competition — to control prices.

To head off the skeptics, disentangling the role of market power from other drivers of high prices is unnecessary. There is substantial evidence that sectors that have an outsized impact on consumers’ pocketbooks lack robust competition. This results, in part, from decades of consolidation, sluggish growth in productivity, and some bottlenecked supply chains that contribute to high consumer prices.

This report asks if antitrust could be doing a better job of protecting consumers. Analysis of a number of key trends over the last 15 years indicates that the answer is “yes.” Indeed, by many measures, antitrust has lost touch with consumers. This finding is especially relevant with the changing of the antitrust guard from the Biden to Trump administrations. With little common bipartisan ground on a “populist” antitrust agenda, a scaling back or scrapping of the Neo-Brandeisian movement’s influence at the U.S. antitrust agencies is likely. This does not necessarily mean, however, that antitrust enforcement will decline in vigor.

The Biden antitrust enforcers focused on extending the reach of antitrust from traditional law enforcement to solve broader economic, political, and social problems; introducing new standards; and taming market power in the digital sector. This retooling of antitrust appeared in many ways to be tone deaf to the pleas of Americans besieged by high prices and living costs resulting from harmful consolidation and business practices. Moreover, it likely came at the expense of enforcement that more directly protects consumers’ pocketbooks.

PPI’s analysis breaks down major factors that highlight the importance of antitrust priorities focused on directly protecting consumers from the effect of market power on raising prices and their cost of living. It looks at flagging productivity in the top five sectors in which consumers spend 75% of their budgets. The analysis exposes high concentration and market power “bottlenecks” that supercharge high prices to consumers and destabilize critical supply chains, such as in health care and food. The analysis also finds lackluster merger enforcement — the most important tool for controlling consolidation that can drive up prices — in the top five consumer-facing sectors over the last 15 years.

The report concludes with policy recommendations. These range from reshuffling merger review responsibilities at the DOJ and FTC, to junking policies for approving harmful mergers subject to ineffective remedies. Other recommendations focus on how the agencies should consider the impact of market power on the stability and resiliency of critical supply chains, and call for the agencies to get up the learning curve on strengthening enforcement in consumer-facing sectors.

Read the full report.

Ainsley and Mattinson for The Observer: On Wokeness, Patriotism and Change, Kamala Harris’s Defeat has Lessons for Starmer

Posted on by Alex Terr

Given how events unfolded, it was never going to be easy for Kamala Harris. Many Democrats are ­convinced her ­campaign saved the party from an even worse result. To be fair, it achieved some real highs: she won the debate. But she never won the argument, at least not with the ­voters who mattered most.

The US election triggered a scary deja vu moment for those of us who had watched the 2019 UK ­general ­election from behind our sofas, hands over our eyes. The Democrats lost votes with almost everyone, almost everywhere, but, like Labour in the “red wall”, most ­dramatically with traditional heartland ­voters: working-class, low-paid, non-­graduates. And, like Labour back in 2019, that lost connection with core voters had not happened overnight.

Working with the DC-based Progressive Policy Institute, we ­conducted post-election polling and focus groups with past Democrat voters who voted for Trump on 5 November. The work laid bare an anxious nation desperate for change. Be in no doubt, this was a change election: any candidate failing to offer the change the electorate craved had become a risky choice. Asking how voters felt about the results on 6 November, “relieved” was the word we heard most often.

Overwhelmingly, change focused on two issues: inflation and ­immigration. Trump enjoyed a clear lead on both. Sure, Harris had some popular policies (anti price-­gouging, tax cuts, help for first-time ­buyers and small businesses), but these seemed sidelined in an overcrowded campaign, with voters concluding that she was not on their side and was too focused on “woke” issues.

Among working-class ­voters, 53% agreed the Dems had gone “too far in pushing a woke ­ideology”. They’ve “gone in a weird ­direction”, said one, “lost touch with our ­priorities”, said another. Worse still was the sense that any voter who disagreed with them was “a bad person”.

Read more in The Observer.

Why the U.S. Senate Should Reject RFK Jr.

Posted on by Max Sherrill

The nomination of Robert F. Kennedy Jr. to lead the Department of Health and Human Services comes at a pivotal moment for public health policy. Americans’ trust in public health institutions is at an all-time low, while the promise of rapidly advancing biotechnology is at an all-time high. 

It is unfortunate that Kennedy seems a poor steward of both. His vaccine skepticism seems designed to relitigate public health battles of the past, while his distrust of the medical profession and pharmaceutical companies could imperil new drug discovery and approval. While the right has long questioned federal health initiatives, Kennedy’s nomination — alongside a slate of other science skeptics in key health roles — augurs a more consequential change than a reshuffling of political appointees: the Republican Party has rejected modern science. The Senate should reject this nomination due to the clear harm Kennedy would do to the nation’s health.

Rapid advancements in biotechnology promise exciting innovation in pharmaceuticals, alongside enormous potential risks. This is especially true with the development of artificial intelligence tools for drug discovery.  This will be a pivotal time for the Food and Drug Administration, as the number of new drugs and novel therapeutics they have to approve dramatically increases. For example, the FDA made history in 2023 by approving the first CRISPR-based gene-edited drugs to treat sickle cell anemia. The agency will have to innovate and modernize to keep up with scientific developments.

It’s also an important moment for public health. In the wake of the COVID pandemic, trust in government health agencies has eroded. Partisanship has infected discussions of public health as climate change and dual-use technologies exacerbate the risk of future pandemics. Other than some modest internal reform at the Centers for Disease Control, the Biden administration did not give priority to fixing the structural issues that led to a shaky initial federal government response to COVID.  Rebuilding public trust while balancing future pandemic risk would be a challenge for any incoming administration. 

Unfortunately, Robert F. Kennedy Jr. is ill-suited to fulfill his department’s critical dual mandate to advance biomedical innovation while protecting Americans from disease. Kennedy’s unfounded skepticism of vaccines leaves America in danger of missing out on breakthrough drugs and treatments while leaving us vulnerable to diseases of the past. His strong opposition to the weight loss drug Ozempic also betrays a reflexive anti-progress attitude poorly suited to the coming acceleration of drug development.  Kennedy also seems uninterested in future pandemic prevention, reportedly saying,  “We’re going to give infectious disease a break for about eight years.”  

Kennedy’s anti-vaccine activism warrants particular attention, given its grave real-world consequences. During a 2019 measles outbreak in Samoa that left 83 people dead, Kennedy’s organization, Children’s Health Defense, helped spread misinformation that contributed to vaccination rates dropping from 60% to 31%. Though Kennedy later claimed he “had nothing to do with people not vaccinating in Samoa,” he had visited the country months before the outbreak, supporting local anti-vaccine activists and suggesting the vaccine itself might be responsible for the deaths.  Children’s Health Defense also funded the viral conspiracy film “Plandemic,” which falsely claims that influenza vaccines can cause COVID, and that the virus was somehow “manipulated.” That’s in line with his musings that COVID may have been deliberately engineered to target “Caucasians and Black people” while sparing “Ashkenazi Jews and Chinese.”

Kennedy may have a public health crisis waiting for him if he is confirmed.  The United States currently faces its largest-ever outbreak of H5N1 bird flu:57 people and 689 herds of cows have tested positive for the virus. The most troubling news from the ongoing outbreak is the two patients, a man in Missouri and a child in California,  who tested positive without any known ties to infected animals. A bird flu pandemic could cause catastrophic harm, and the speed and transparency of the current response do not induce confidence.  Kennedy is poorly suited to lead this response given his promotion of raw milk consumption, which is currently being recalled for contamination with extremely high levels of bird flu virus.  

Some of Trump’s other health nominations have similar involvements with pseudoscience.  Like Kennedy, Dr. David Weldon, Trump’s nominee for CDC director, believes the measles vaccine causes autism.  Dr. Mehmet Oz, the president-elect’s nominee for the Centers for Medicare & Medicaid Services, has a well-documented history of promoting questionable medical treatments and products on his television show. A 2014 study in the British Medical Journal found that nearly half of his medical recommendations either lacked evidence or contradicted medical research.

Anti-vaccine paranoia on the right predates Trump. State legislatures, particularly in Republican-governed states, have already expanded vaccine exemptions and limited public health powers over the past decade, while Project 2025 proposed paying damages to all medical professionals who were dismissed due to the CMS vaccine mandate, effectively undermining established public health protocols and potentially setting a dangerous precedent for future health crises. It also calls for expanding federal religious exemptions for both taking and administering vaccines.

 Trump has proved reluctant to tout the main health policy success of his first term: Operation Warp Speed. A Progressive Policy Institute report found that the COVID vaccines saved 2.9 million lives, avoided 12.5 million hospitalizations, and saved $500 billion in hospitalization costs. This was an enormous success of government collaboration with the private sector, and it is very telling that the former president is shying away from claiming this victory. 

The nomination of Robert F. Kennedy Jr. isn’t just a concerning personnel decision — it represents a dangerous turning point in American politics. While vaccine skepticism and distrust of medical institutions have long simmered on the fringes, their embrace by a major political party marks a stark departure from evidence-based public health policy. This rejection of scientific consensus comes at a particularly perilous moment: as we face evolving threats from bird flu, climate change, and emerging pathogens, while simultaneously standing on the cusp of revolutionary biotechnology breakthroughs. The Senate must reject this nomination to protect our public health institutions at this critical moment for America’s scientific future.

Juul in The Hill: Progressives align with DOGE on defense cuts: ‘Let’s play ball’

Posted on by Max Sherrill

Peter Juul, director of national security at the Progressive Policy Institute, a center-left think tank, said the defense budget should increase given the dangerous state of the world, even though he agreed the Pentagon could be more efficient.

“It’s hard to see where you can do that right at this point, unless you’re [proposing] a massive personnel cuts,” he said. “You might be able to shave the top line a bit, but it’s not going to be this massive savings.”

On Capitol Hill, Juul said there is “more appetite” to “keep things where they are or to push them even further,” calling the hope for defense cuts “wishful thinking by progressives.”

Read more in The Hill.

Canada is the top export market for 36 U.S. states, and Mexico for six.

Posted on by Alex Terr

FACT: Canada is the top export market for 36 U.S. states, and Mexico for six.

THE NUMBERS: Top export markets for U.S. states, 2023 –

Canada 36 – listed below*
Mexico   6 – Arizona, California, Kansas, New Mexico, Oregon, Texas
China   3 – Alaska, Louisiana, Washington
United Kingdom   2 – Utah and D.C.
Netherlands   1 – Puerto Rico
Japan   1 – Hawaii
Belgium   1 – Massachusetts

* Arkansas, Colorado, Connecticut, Delaware, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, West Virginia, Wyoming. 

WHAT THEY MEAN:

Some strange pre-Thanksgiving belligerence against Mexico/Canada/China: Mr. Trump threatens via social media to break up the 2019 “U.S.-Mexico-Canada” agreement by imposing 25% tariffs on Canadian and Mexican goods over migration and drug issues, with China thrown in as well.  (For reference, here’s the text of USMCA’s core commitment from Article 2.4: “[N]o Party shall increase any customs duty, or adopt any new customs duty, on an originating good.”)  It’s not clear how seriously to take this – see below for some likely national impacts and personal adjustments – but here’s some background:

Data: Canada and Mexico buy about a third of all American exported goods. Canada is the top export market for 36 U.S. states and Mexico for another six, including the four border states Texas, Arizona, New Mexico, and California. By one measure, New Mexico is most reliant of all states on Mexican customers, who buy $3.5 billion — 70% — of their $5 billion in total overseas sales.  By another, it’s Texas, whose massive $130 billion in exports to Mexico is 5% of state GDP, even before adding the $36 billion in Texan sales to Canada.  North Dakota meanwhile relies most heavily on Canada – 82% of $8.8 billion in worldwide exports of wheat, oil, farm machinery, etc. — with Maine, Michigan, and West Virginia all around 50%. To give the overall picture, U.S. export data in 2023 looked like this:

U.S. Export Sector To World To Canada/Mexico Canada/Mexico share 
All goods $2.018 trillion $678 billion 33.6%
Manufacturing $1.601 trillion $594 billion 37.5%
Agriculture    $174 billion   $56 billion 32.2%
Energy & metal ores    $351 billion   $81 billion 23.1%

A big tariff on incoming goods from Canada and Mexico would have three basic effects.  The most direct would be higher U.S. prices, especially in the energy, car, appliance, and food industries that make up the largest share of North American trade.  Mexico, for example, is the U.S.’ largest source of winter vegetables and fruit, supplying grocery stores this past February with 188,640 tons of tomatoes, 128,330 tons of peppers, 106,460 tons of avocadoes, 44,440 tons of lemons and limes, and other fresh produced valued at $2.25 billion — along with TV sets, cars, and home appliances, plus more cars, the largest single stream of energy imports, beef, cooking oil, and beer from Canada.  The second and third effects are less direct but predictable: American exporting factories, labs, farms, ranches, and mines with Canadian and Mexican customers would (a) risk retaliation in kind, and (b) lose customers as Mexican and Canadian firms reliant on U.S. goods go bankrupt or lose out to competitors elsewhere in the world.  Some illustrative examples:

Energy and Price Increases: Energy is the largest single import from Mexico and Canada.  In 2023, American refineries and power plants bought $145 billion worth of crude and refined oil, gas, and electric power from the two countries. This was about 60% of all U.S. energy imports. ($122 billion from Canada, $23 billion from Mexico.)  A 25% tariff on Mexican and Canadian energy adds a face value of $36 billion. Some might be replaced over the course of 2025 by Persian Gulf oil at market prices; on the other hand, the tariff itself might raise world market prices.

Export Losses (1) – Agriculture and Retaliation: When one country imposes tariffs on another’s goods, particularly in violation of an existing agreement, the offended country frequently retaliates by doing the same thing. The 2018/19 bout of tariffs on steel and most Chinese-made goods brought retaliatory tariffs against U.S. goods in China, the European Union, India, Turkey, and several other countries. Some U.S. firms responded by moving overseas to dodge the hit; Harley-Davidson, for example, moved some of its bike production from Milwaukee to India to avoid the EU tariffs. Others didn’t have that option.  Farmers, unable to move production and then as now selling lots of products to China, took a heavier blow, leading the first Trump administration to institute a $20 billion annual reparations program for their lost income. Canada and Mexico now buy a third of all U.S. farm exports, and adding China in brings the total to half of last year’s $174.2 billion ag export total, putting about 10% of all U.S. farm income at risk.

Export Losses (2) – New Mexico Manufacturing and Customer Loss: Retaliation, though, wouldn’t be the only harm to come from the breakup of USMCA.  Lots of American exports to Canada and Mexico — hundreds of billions of dollars worth of them, mainly in sophisticated manufacturing — go not to Canadian and Mexican homes and consumers but to industrial buyers.  For example, New Mexico’s $3.5 billion in exports to Mexico includes $1.7 billion in computer parts, $230 million in magnetic and optical media, $290 million in electrical components, and $190 million in semiconductor chips — that is, high-tech inputs bought by Mexican auto plants and factories assembling refrigerators, computers, and other appliances, and consumer electronics. Imposing a high 25% tariff on the resulting cars and TVs as they flow back to the U.S. will naturally cut sales and, therefore, reduce not only the makers’ production and job counts but those of their suppliers in Las Cruces, Albuquerque, and the just-opened Rio Rancho semiconductor fab.

New Mexico’s risks, though probably particularly high, are typical rather than unusual. How much of North Dakota’s $580 million in farming machinery exports to Canada would survive? Ohio’s $21.8 billion in exports to Canada, with its $5 billion worth of metals and auto parts destined for Ontario and Quebec auto plants? What fraction of Texas’ $10.8 billion in semiconductor chips, $5.1 billion in electrical equipment, and $7.0 billion in auto parts to Mexico?

To sum up: Among big powers, the U.S. is unusually fortunate in having friendly and peaceful relationships with its two large neighbors.  These involve deep and complex economic ties, which often raise policy problems and challenges but, in general, serve all three countries well.  Replacement of the earlier North American Free Trade Agreement with the “USMCA” in 2020 has had mixed results — some useful innovations, also some things that seem to be working less well and may have been over-negotiated. If the agreement is still there next year, its scheduled review in 2026 might help fix some of the problems. Abandoning it to provoke an economic shock and pick fights with neighbors and allies, though, is much more likely to inflame than ease border problems – and generally seems unsound and a bad idea. Again, it isn’t clear how serious this really was.  But just in case, and moving from unwise national policy to its possible personal impacts: make the down-payment this month if you’re buying a car or refrigerator, and with heating and gas as well as food prices maybe about to jump, take some time in mid-January to fill your tank and stock up on groceries.

FURTHER READING

“USMCA” text (see Chapter 2 on “National Treatment and Market Access for Goods,” Article 2.4, for tariff policy).

… State-by-state perspective from the Canadian Embassy.

… The Mexican Embassy’s USMCA page.

… and from the U.S. Department of Commerce, interactive U.S. state export figures for all countries, the world, and 323 “NAICS-4” products from oil seeds and grain at 1111 to “miscellaneous manufacturing” at 3999.

PPI looks at U.S./Canada/Mexico auto trade four years after USMCA and wonders whether the renegotiation of NAFTA tried to do a little too much in this area.

The Energy Information Administration’s snapshot of U.S.-Mexico energy trade.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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Ainsley for The Power Test Podcast: Can you feel it? Labour’s big task

Posted on by Max Sherrill

Recorded live at the Centre for Progressive Policy’s Inclusive Growth Conference on 28th November, this special episode The Power Test looks at where we are six months into the new Labour government and what it needs to do to deliver its promise of a decade of national renewal.

Following the Budget, the reelection of Donald Trump in the US, farmer protests, and a rumoured government ‘relaunch’, Sam and Ayesha, together with Chief Executive of the New Economics Foundation Dr Danny Sriskandarajah, CPP’s Director of Place and Practice Annabel Smith, and Power Test regular and Director of the Project on Center-Left Renewal at the Progressive Policy Institute Claire Ainsley, look at what Labour needs to do to deliver, restore trust in politics and survive.

Jacoby for Washington Monthly: The Least Terrible Way for Ukraine to Negotiate with Russia

Posted on by Alex Terr

Many Ukrainians, used to making the best of bad situations, reacted to Donald Trump’s reelection with caustic humor. Among the most heard jokes play off his promise to end the war with Russia in 24 hours. “Has everyone set their timers?” one man asked on Facebook. But underneath the repartee, Ukrainians are tired—ground down by a war, now all but stalemated, that will soon enter its fourth year. So they wait, half-frightened, half-hopeful, for what could be a disastrous defeat or a welcome reprieve.

Few here doubt that Trump’s team will push for negotiations, requiring compromises from both sides but sacrifices mostly from Ukrainians. Morally, this is monstrous. Ukrainians are guilty of nothing but building their country, growing its economy, and yearning for an independent, democratic future. The Kremlin’s crimes, in contrast, are unending. They include the unlawful annexation of Crimea in 2014, a ten-year proxy war in eastern Ukraine, the unprovoked 2022 invasion, the kidnapping of some 20,000 Ukrainian children, and nearly three years of deadly missile strikes on schools, hospitals, and civilian targets in cities across a country of 40 million, to name just a few.

The world’s leading champion of might-makes-right, Vladimir Putin, flouts international norms and sides unashamedly with America’s enemies, from Iran to North Korea. Yet, under Trump, Kyiv and Moscow will now be treated as moral equivalents, two equal parties across a negotiating table, each expected to give a little to get a deal.

But indignation and outrage will do little to help Ukraine in the months ahead as the two sides jockey and the Trump team fine-tunes its approach. Even as the grim game plays out, some outcomes would be better than others—a relatively good peace versus an unspeakable, debilitating deal.

Read more in Washington Monthly

Manno for Forbes: Four Job-Launch Pain Points In Young People’s Career Journey

Posted on by Alex Terr

Preparing for a career and entering the workforce are more challenging tasks than ever for young people. They must navigate four job-launch pain points that involve career exposure, career aspirations, career skills, and career experience. These pain points are the result of a fundamental disconnect young people experience between the career preparation K-12 schools offer them and the career preparation they want from K-12 schools.

K-12 school systems can fix this problem by putting in place a systematic approach to career education and career development for students. As National Career Development Month comes to a close, let’s examine these job-launch pain points and suggest a solution.

Read more in Forbes. 

Kahlenberg for The Hill: To win the working class, Democrats should champion patriotic education

Posted on by Alex Terr

Democrats face two enormous challenges in light of their disastrous 2024 election showing. The first is to defend democracy as President-elect Donald Trump, the most authoritarian figure ever elected president, takes power with a much broader mandate than in his first term.  The second is to restore the faith of working-class voters in a party that has utterly lost touch with them.

Normally, these two priorities are viewed as contradictory. After all, working people by necessity focus on kitchen table economic concerns.

But Democrats can take one important step that would simultaneously move them to the center culturally and affirm democratic norms:  create a robust program of “liberal patriotic education” that would merge a love of country with a recognition that the U.S. still needs to do much more to widen opportunity to those left behind.

Read more in The Hill.  

American family spending on food is down by 28% as a share of family budgets since 2000.

Posted on by Max Sherrill

FACT: American family spending on food is down by 28% as a share of family budgets since 2000.

THE NUMBERS: Food share of annual American family spending* –

Year Food share of annual American family spending
2023   9.8%
2000 13.6%
1973 19.1%
1950 26.7%
1918 38.3%
* Bureau of Labor Statistics, Consumer Expenditure Survey.

WHAT THEY MEAN:

Governor Bradford remembers the first Thanksgiving in 1621:

“They [the fifty Pilgrims who had survived the first winter] begane now to gather in ye small harvest they had, and to fitte up their houses and dwellings against winter, being all well recovered in health & strenght, and had all things in good plenty; fFor as some were thus imployed in affairs abroad, others were excersised in fishing, aboute codd, & bass, & other fish, of which yey tooke good store, of which every family had their portion. All ye somer ther was no want. And now begane to come in store of foule, as winter approached, of which this place did abound when they came first (but afterward decreased by degrees). And besids water foule, ther was great store of wild Turkies, of which they tooke many, besids venison, &c. Besids, they had about a peck a meale a weeke to a person, or now since harvest, Indean corn to yt proportion. Which made many afterwards write so largly of their plenty hear to their freinds in England, which were not fained, but true reports.”

Bradford’s Pilgrims and their “some ninety” Wampanoag guests relied on the autumn fish, berries, birds, vegetables, corn, and game of early New England. Tomorrow’s Thanksgiving celebrants can pick from the same options: 21st-century New England has 30,700 farms on 3.75 million acres of land.  They sell $3.2 billion worth of produce annually, with Massachusetts bogs topping the U.S. in cranberries, Maine leading for blueberries and lobster, and Vermont for maple sugar. Native Americans likewise operate 56,000 farms and ranches (mostly in the West), producing $2.4 billion in crops and $6 billion in livestock each year. More broadly, American Thanksgivings draw in food from 1.9 million American farms and ranches, and more from the world beyond. The turkey and cranberry sauce are still mostly American birds and berries – Minnesota and North Carolina are the largest turkey-breeders – but they often find complements in Australian and Argentine beef, Thai and Ecuadoran shrimp, Irish and New Zealand butter, Mexican cilantro and avocado, South African wines and oranges, Canadian wheat and beer, Chilean berries and Peruvian vegetables, Sri Lankan tea and Colombian coffee, and West African chocolate. A bit of background to this:

Food-buying and spending: The World Trade Organization’s World Trade Statistics 2023 finds the U.S. the second-largest buyer of agricultural goods at $241 billion last year, behind China’s $285 billion and a bit above the EU’s $213 billion. (The U.K. and Japan are next at $86 billion and $84 billion.) This dazzling array of stuff looks pricy, but in a more realistic sense, it’s gotten steadily cheaper. As food-buying has “globalized,” as tariffs have fallen, and as shipping and cold-chain storage techniques have improved, Americans have spent steadily less of their money on food. The Bureau of Labor Statistics’ most recent Consumer Expenditure Survey, for example, reports that 9.8% of American family budgets now go to food — a drop of 28% since 2000, of half since the 1970s, and three-quarters over the last century.

Production and exports: And what about the producers? The 1.9 million U.S. farms and ranches top the WTO’s list of exporters with $198 billion in overseas sales last year – 1.2 billion from New England – and typically get a fifth of their income from foreign customers.  USDA’s database reports that U.S. farms and ranches annually ship out 190 million tons of food — soybeans, and wheat for Asian noodle shops, fresh vegetables for Latin America, corn for Mexican bakeries, beef and pork for the world, and 500 million pounds of turkey.  Here’s USDA’s businesslike 21st-century counterpoint to Governor Bradford:

“With U.S. agricultural output growing faster than domestic demand for many products, U.S. farmers and agricultural firms have been relying on export markets to sustain prices and revenues. As a result, U.S. agricultural exports have grown steadily over the past 25 years—reaching $174 billion in 2023, up from $57.3 billion in 1998.  The product composition of agricultural exports shifted over that 25-year span, reflecting changes in global supply and demand. Most notably, exports of consumer-oriented products—including high-value products (HVP) such as dairy products, meats, fruits, and vegetables—showed strong growth driven by increasing population and income worldwide, as well as a growing diversification of diet.”

So, with families spending less of their income on food, farmers shipping more high-value stuff abroad, and lots on the table tomorrow, we have much to be grateful for this week. We wish readers and friends a happy Thanksgiving Day.

FURTHER READING

Then & now:

Plymouth’s Pilgrim Hall Museum has the two surviving records of the first Thanksgiving, with Governor Bradford on food and Edward Winslow on Massasoit and his warriors.

The heirs of Massasoit at the Mashpee/Taunton Wampanoag Nation.

Native agriculture today:

Per USDA, 78,316 Native American producers operate 56,000 farms and ranches on 52.6 million acres of land, with $2.8 billion worth of crops and $3.4 billion in livestock annually.  The largest output is in Oklahoma and Arizona. Native American farmers are slightly younger than the average U.S. farm owner — 11% are 35 or younger and 34% over 65, as opposed to 9% below 35 and 38% above 65 for U.S. farmers in general — and are more likely to use farming as the main source of family income. A somewhat larger share of Native farm owners are women. USDA on 21st-century Native farm and ranch life.

The Inter-tribal Agricultural Council, based in Billings, Montana, promotes tribal farm and fishery exports.

And for DC residents and visitors, Mitsitam Café at the Museum of the American Indian has menus and material, as well as meals, on contemporary Native American farming and products.

Family spending on food:

The Bureau of Labor Statistics Consumer Expenditure Survey reports spending patterns by family type, income level, race and ethnicity, and more for 2023.

… and looks back over the Survey’s 130 years with figures on incomes and spending for 1901, 1918, 1934-1936, 1950, 1960, 1972-73, 1984-1985, and 1996-1997:

The Department of Agriculture looks at American farming and ag trade –

The Census of Agriculture 2022, released last February.

… a stat-snapshot of 21st-century New England farming, from berries and maple syrup to mink.

… a look at American agricultural trade and its place in farming and the rural economy.

… and the “Global Agricultural Trade System” database.

And world perspective:

The WTO’s World Trade Statistics 2024; see Tables 13 and 14 for food and ag trade export and import leaders. A quick table of top exporters:

World agricultural exports $2,276 billion
European Union:    $268 billion
U.S.    $198 billion
Brazil    $157 billion
China      $95 billion
Canada      $88 billion
Indonesia      $59 billion
Thailand      $56 billion
Australia      $50 billion
All other $1,305 billion

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

Juul on Medium: The Senate Should Reject These Two Dangerous Nominations

Posted on by Max Sherrill

President-elect Donald Trump has nominated a pair of unqualified and unacceptable individuals to fill two critical national security posts in his upcoming administration: Fox News personality Pete Hegseth as secretary of defense and former Rep. Tulsi Gabbard as director of national intelligence. Neither nominee possesses any experience managing organizations the size, scope, and scale of the Defense Department or America’s intelligence community. Both hold extreme views that ought to disqualify them from holding any senior national security position, much less ones with the duties and responsibilities they have been nominated for.

The Senate must exercise its Constitutional responsibility of advice and consent to reject these two presidential nominees. If confirmed, both Hegseth and Gabbard would do grave harm to American national security — primarily via the damage they would inflict on the institutions they have been nominated to lead.

Keep reading in Medium.

Missing the Mark: How the DOJ’s Google Antitrust Remedies Fail Consumers and the Economy

Posted on by Max Sherrill

The remedies proposed by the Department of Justice (DOJ) for the Google antitrust case, released on November 19, are a stunning example of prosecutorial overreach. DOJ antitrust chief Jonathan Kanter and his team went far beyond Judge Mehta’s findings, proposing to break up one of America’s most successful, innovative, and consumer-friendly companies.  

Indeed, the DOJ’s proposed remedies serve as an ironic post-election punctuation mark, emphasizing how the Biden Administration poured vast amounts of resources and attention into a case against Google that working Americans simply didn’t care about. Voters rightfully complained about the high price of food and homes, and voted that way. Tech firms were not on their list of major policy concerns, especially since tech was a low-inflation sector of the economy. 

Moreover, PPI’s analysis shows that rather than Google suppressing growth, the tech sector has been a powerful source of jobs during the pandemic and after. Since 2019, domestic tech employment has risen by some 700,000 workers, spread around the country, including significant job gains in states such as Colorado, Arizona, Pennsylvania, and Florida.  

Antitrust policy is not a popularity contest, of course. But if there’s one thing that the election teaches us, it’s that government actions have to serve the needs of ordinary consumers. And by that measuring stick, many of the proposed remedies from the DOJ fail miserably. 

For example, the DOJ would force Google to provide vast amounts of user and search data at a minimal cost to “rivals and potential rivals” — that is, anybody who asked — creating inevitable data security and privacy nightmares. No sane consumer would support a “remedy” that increases the exposure of their data. 

The DOJ would also require Google to divest Chrome and hobble Android in ways that would make these popular products less useful to consumers. These changes would be a disaster for ordinary users. 

DOJ’s ambitious and expansive remedy proposals serve as an illustration of how the Biden Administration missed the boat politically and economically. 

Jacoby for Forbes: With Trump In The Wings, Can Europe Agree To Cooperate On Defense?

Posted on by Max Sherrill

Andrius Kubilius drew back the curtain about an hour into his November 6 confirmation hearing as the European Union’s first-ever commissioner for defense and space. A former prime minister of Lithuania and long-time member of the European Parliament, Kubilius told a story about a recent war game simulating a Russian attack on his home country.

The alarming finding of the exercise: Lithuania would be overrun—defeated by the Russians and occupied—well before NATO forces arrived, probably about 10 days later. Lithuania estimates that preparing for such an assault would require it to double its defense spending from nearly 3% of GDP, already higher than all but four European countries, to 6%. (The U.S. spends 3.4%, according to NATO.) “How shall we do it?” a somber Kubilius asked his fellow parliamentarians. “How much the European Union can help us? That is the question to which we need to find an answer together.”

Some 1,000 days after Russia’s unprovoked invasion of Ukraine, with President-elect Donald Trump threatening to end the fighting on terms that many believe will be favorable to Moscow, Europeans are increasingly worried that war is coming to their doorstep. The past year has seen a sharp escalation of sabotage that European intelligence services attribute to Moscow: arson attacks on a Warsaw shopping mall, a German weapons factory and a Ukrainian-owned logistics firm in London, plus a foiled plot to sabotage a military installation in Germany and a conspiracy to assassinate the CEO of a German arms manufacturer, among other illegal acts. And German intelligence has predicted that Russia could be ready for an armed attack on NATO by the end of the decade.

Keep reading in Forbes.