March 2021

Winners and losers in a trade war


By Michael Randle


So, let’s take a look at U.S. trade policy that is currently in place. The new Biden administration finds itself in a situation not seen in decades. The U.S. has had minor trade wars in the past with Japan, Canada, Latin America and others. (Remember the trade war with Japan in the mid-1980s?) But trade wars of the past are nothing like those that the Biden administration is facing today. . .wars with China and other nations that were implemented during the last administration.


You have to go all the way back to 1930 to witness a trade war to equal what we have seen over the last four years. Now President Biden’s administration must decide what to do with the protectionist policies that remain in place. It will not be an easy task to restore supply chains.


The Smoot-Hawley Act of 1930 was passed by Congress during the early years of the Great Depression. The act took its name from Senator Reed Smoot of Utah and Representative Willis Hawley of Oregon. Sources say that over 1,000 economists in the U.S. urged President Herbert Hoover to veto the act that essentially placed tariffs on all kinds of imports — more industrial in nature as opposed to tariffs on agriculture. They were a “double down” by the U.S. in an attempt to put America’s economy on a more sure footing.


In what was already a depressed economy, the tariffs contributed to U.S. exports falling by 61 percent in 1933. Countered by other nations, they failed miserably, and Herbert Hoover lost the next election to Franklin D. Roosevelt. In 1934, Roosevelt’s Reciprocal Trade Agreements Act replaced the Smoot-Hawley tariffs. This legislation allowed the U.S. to re-negotiate tariff reductions. That’s kind of where the Biden administration finds itself now after a worldwide assault on free trade by the Trump administration.


Much like Herbert Hoover, instead of opening markets for trade, the Trump administration restricted market access, therefore reducing economic opportunities, not only in the U.S., but for most of the world. Most economists believe that opening markets creates higher living standards for all. President Trump believed free trade helps create higher living standards for all but Americans, even though most economists would disagree. So, how did that go, and what is President Biden’s administration going to do about it?


Well, if Biden is more free trade than not — and he is  — then he has an impressive list of tariffs to roll back. Trump’s tariffs — put in place by executive action, not by Congress — created severe retaliation from other nations. U.S. consumers and businesses — not the nations of origin — paid higher prices for many things, including foreign-made steel, solar panels, wine, cheese and aluminum to name a few. In addition, there were tariffs on thousands of Chinese-made items.


These protectionist policies create winners and losers. The losers are the companies that make and assemble things in the U.S. — American-made products — that are sourced from foreign made products, such as imported aluminum. The winners are those companies that make aluminum in the United States. Once the tariffs were put into place, both domestic and foreign-made aluminum went up in price by about 10 percent because of the lack of competition.


Let’s look at the job data regarding these tariffs: The Tax Foundation reported last fall that the Trump tariffs cost Americans $80 billion in the additional cost of goods. The same source claimed the tariffs lowered employment by 179,800 jobs. A study by the U.S.-China Business Council (USCBC) that came out in January 2021, claimed that former President Donald Trump’s trade policies, particularly with China, cost the U.S. 245,000 jobs during his term. In addition, the Congressional Research Service reported that $100 billion of U.S. exports had faced tariff restrictions.


Lost jobs, reduced sales and higher costs. . .that’s what tariffs do. Less is sold and what is sold costs more. This will continue until the Biden administration rolls back most, if not all, of these tariffs.


Arkansas-based Walmart to spend $350 billion on goods made, grown or assembled in the U.S.

Over the next 10 years, Walmart will spend about $350 billion on goods made or grown in the U.S. The purchases will help create 750,000 jobs, according to the company. The giant retailer made a similar commitment in 2013, when it said it would invest $250 billion in American-made goods.


GM looking to build second battery plant in Tennessee

Detroit-based General Motors is scouting sites in Tennessee, where it operates one of its largest assembly plants, to locate a second battery factory in the United States. A second battery plant would increase capacity for electric vehicles for the automaker. GM’s joint-venture partner is LG Chem. The two companies are building a $2.3 billion battery factory in Northeast Ohio.


Samsung files paperwork for $17 billion chip factory in Austin

South Korea-based Samsung filed paperwork with Texas officials in early March requesting an incentive package worth $1 billion to build a $17 billion chip factory in Austin. The company has operated another large chip plant in Austin for decades. The company says the factory could house as many as 1,800 workers.


ElementUS advances $800 million rare earth elements project in Louisiana

ElementUS, a joint venture of DADA and Enervoxa, will invest $800 million to extract rare earth elements at the Noranda Alumina site in Gramercy, La. The deal is up to a final decision next year.  “We’re proud to see the creation of this new facility that will create hundreds of high-demand, high-wage job opportunities for the people of St. James Parish, St. John the Baptist Parish and surrounding areas,” said President and CEO Michael Hecht of Greater New Orleans Inc. “This announcement further proves that global companies can not only thrive in Southeast Louisiana, but that the region’s strong workforce and logistical advantages can lead to future expansions, as evidenced by this joint venture.” DADA Holdings owns Gramercy-based Noranda Alumina and is partnering with green technology firm Enervoxa to separate rare earth elements and other valuable minerals from alumina byproducts. The Gramercy site has a 35 million dry-ton reserve of mineral-rich residual bauxite. The carbon-neutral project would result in 200 new direct jobs.


T-Mobile expanding in Charleston County, S.C.

Cell phone retailer T-Mobile announced in the winter quarter it is expanding its custom operations center in Charleston County. The project will create 540 jobs.


The U.S. economy is roaring back

Manufacturing growth data from the Institute for Supply Management in March showed that output to begin the year is far better than expected. The Atlanta Federal Reserve, which tracks data such as GDP growth, is indicating a 10 percent gain for the first quarter of the year. With a total of 60.8 percent in February, manufacturing growth saw a three-year high in February. The second round of PPP funding is now being paid, and in the first week of March, the U.S. Senate passed President Biden’s $1.9 trillion stimulus plan.


Packaging manufacturer is expanding in Northeast Arkansas

Anchor Packaging, which makes packaging materials from recycled materials, is expanding its Paragould manufacturing plant. The $21 million investment will create 45 jobs.


Life sciences has good year in North Carolina

Life sciences firms in North Carolina had an excellent year in 2020 as many are expanding their capacities to make pharmaceuticals and biological therapies in the state. Expansions in North Carolina in 2020 saw $2.3 billion in investment with about 2,800 new jobs created.


Life sciences firm expands in Virginia

Ceres Nanosciences, a life sciences company that makes innovative products to improve diagnostic testing, will expand its operation in Prince William County’s Innovation Park to increase the manufacturing capacity of its Nanotrap® Magnetic Virus Particles for COVID-19 tests.  “This expansion will enable Ceres Nanosciences to vastly increase production of its patented technology to support current and future COVID-19 testing needs both in the Commonwealth and around the country,” said Gov. Ralph Northam. The deal will create 50 jobs.


Tempur Sealy to expand in rural Virginia

Gov. Ralph Northam announced that Tempur Sealy International will invest $16.7 million to expand its manufacturing operation in Scott County. The company will increase production to meet growing demand for its proprietary foam mattress and pillow products. “As one of the largest employers in the area, this expansion will allow the company to increase production capacity to ensure the future viability of its Scott County plant, said Gov. Northam. The deal will create 25 new jobs.


BorgWarner announces expansion in North Carolina

Manufacturer BorgWarner announced a $62 million expansion of its facilities in Arden, N.C. The auto supplier’s project will include at least 100 new jobs.


Plastic manufacturer expands in Kentucky

Stratus Plastics, an automotive plastics manufacturing company located in Morgantown, Ky., is increasing capacity at its plant there. The expansion will create 135 jobs.


Business confidence is high in Montgomery, Ala.

The Alabama Business Confidence Index has Montgomery topping all other cities in the state in the first quarter of 2021. The index is done by the University of Alabama’s Center for Business and Economic Research. Montgomery led all cities in Alabama with score of 58.8 in the first quarter of 2021.

Packaging manufacturer to invest $440 million at Alabama mill

Packaging Corp. Of America will invest $440 million at its paper mill in Jackson, Ala. The three-year project will permanently convert a paper machine at its mill in Clarke County to produce linerboard used to make corrugated packaging.


More venture capital funding flowed into Dallas-Fort Worth

In calendar year 2020, more venture capital flowed into D-FW than any other metro area in the U.S. Investments in D-FW companies grew by 66 percent from the previous year. The other four making up the top five in venture capital growth were Portland, Atlanta, Salt Lake City and San Diego.


Secretary of Commerce Yellen: Offshoring tax penalty will keep U.S. companies at home

Part of President Biden's “Made in All of America” plan is raising the corporate tax rate to 28 percent, but also imposing a 10 percent offshoring penalty tax on U.S. goods and services produced overseas. Janet Yellen said that the president's offshoring tax penalty would incentivize U.S. companies to "create and maintain jobs at home."


Port Laredo No. 1 in exports again

Laredo, Texas, again led all U.S. markets in exports, according to Census Bureau data analyzed by WorldCity. It is the second year Port Laredo finished on top. Some of the Port's exports include motor vehicle parts ($8.9 billion); engines ($3.4 billion) and gasoline $3.1 billion).


Alabama DOC launches “RurAL" campaign

The Alabama Department of Commerce rolled out a digital marketing campaign in the winter quarter to promote rural commerce in the state. Called "RurAL," the website campaign showcases the business advantages of the state’s rural communities and shares the success stories that energize their economies.


Texas, again, No. 1 export state

For the 19th consecutive year, Texas is the No. 1 exporting state for calendar year 2020. Texas exports totaled $279 billion, larger than the sum total of goods exported by the next three largest export states -- California ($156 billion); New York ($62 billion) and Louisiana ($59 billion).


Once again, BMW leads nation in exports by value

At $8.9 billion, BMW led all automaker exports by value of its units made in South Carolina, according to the U.S. Department of Commerce. It is the seventh consecutive year BMW led all American-made vehicle exports by value. The top two export countries for the BMW vehicles made in Spartanburg County, S.C., in 2020 were China (23.3 percent of export volume) and Germany (12.9 percent).


Foreign direct investment cratered in 2020

Global foreign investment fell a remarkable 42 percent in calendar year 2020. It went from $1.5 trillion in 2019 to an estimated $859 billion last year, according to the UNCTAD Investment Trends Monitor published on January 24. These trade flows between nations are expected to remain weak due to the the COVID-19 virus. The trade numbers are 30 percent below the drop in trade during the Great Recession of 2007-2009.


Two-thirds of Kentucky jobs restored

According to the Kentucky Chamber of Commerce and the Center for Business and Economic Research at University of Kentucky, the state has recovered nearly two-thirds of the jobs lost during the early stages of the COVID-19 pandemic. Kentucky’s gross domestic product increased at an annual rate of 41.2 percent in the third quarter of 2020. That outperformed the nation, which saw 33 percent growth, according to the U.S. Bureau of Economic Analysis. The state figure comes on the heels of a second quarter drop-off of 34.5 percent.


Atlanta to become one of Microsoft's largest hubs

Microsoft announced in the winter quarter that Atlanta will eventually become one of the largest hubs for the company worldwide. The company is planning new office space in Atlantic Yards with room for up to 2,500 employees. Microsoft is also building multiple data centers in the Atlanta area, for a new "East U.S. 3" cloud region.


Forbes: UAB is America's best large employer

The University of Alabama at Birmingham (UAB) was named "America's Best Large Employer" by Forbes magazine. UAB was picked ahead of other schools such as Yale University, as well as 500 public and private companies. UAB is Alabama's largest public employer and home of one of the region’s largest academic medical centers. UAB employs more than 23,000 people.


Texas No. 1 in the U.S. for commercial development

The pandemic did nothing to slow commercial real estate development in the state of Texas. Last year, real estate development contributed more than $65 billion to the Texas economy. That is $10 billion more than in 2019. Texas led all states in real estate development in 2020.


Franke Foodservice Systems to expand Lincoln County, Tenn., operations

Franke Foodservice Systems officials announced that the company will expand its Lincoln County operations and create at least 56 jobs. Franke is in the midst of a $1.3 million investment to expand and improve its operations in Fayetteville, where the company specializes in the design and manufacture of foodservice equipment for restaurant chains.


New lab space for pharmaceutical development company in Richmond, Va.

Richmond-based pharmaceutical development company Phlow Corp. has formed a partnership with United States Pharmacopeia that will involve opening new laboratory operations in the Virginia Bio+Tech Research Park in downtown Richmond. The lab is expected to employ about a dozen scientists.


Gap plans distribution center in Longview, Texas

Clothing company Gap will build a new $140 million distribution center that will create more than 500 full-time jobs in Longview by the end of 2023 and grow to more than 1,000 full-time jobs over the next five years.


Raleigh startup Pendo plans hiring spree of 400 new jobs

Raleigh software firm Pendo, one of the most valuable and promising startups in North Carolina, beat its own expectations during a pandemic-stricken year. The company said in its annual report that it plans to hire 400 more employees this year to fuel growth, as it invests heavily in its presence overseas and looks to nab more large customers to its platform.


Steel Technologies to expand in Smyrna, Tenn.

Steel Technologies recently obtained a revised property tax-break agreement that will result in 22 more jobs at its facility in Smyrna. The company processes flat-rolled steel for the automotive industry among others.


Georgia Ports promises jobs with new enhanced terminal operation

The Georgia Ports Authority recently cut the ribbon on a newly enhanced Ocean Terminal facility in Savannah. The $45 million project, which was approved in January 2020, is meant to improve container operations. Officials say it will create jobs while limiting the negative impact on local neighborhoods.


Cottrell to invest $125 million in Gainesville, Ga.

Cottrell, a manufacturer of over-the-road car haulers and equipment, will establish a second manufacturing facility in Gainesville. This will serve as the company’s North Campus, adjacent to their existing South Campus in Hall County. Cottrell will invest $125 million in the new 500,000-square-foot facility, which will also create new jobs.


Sumter County, Ga., to gain 1,000 jobs with new call center

A ribbon-cutting was recently hosted as TLC Associates opened its new call center facility in the Ted Baldwin Business and Technology Park Complex in Americus, Ga. The company will hire 1,000 staff members.


Finfrock expands in Palm Beach County, Fla.

Apopka, Fla.-based design-builder Finfrock is expanding into Palm Beach County with a 140,000-square-foot manufacturing facility on 94 acres in Belle Glade, Fla. The 200 jobs promised by the company are a huge win in Belle Glade, a city of 20,000 along the southeast bank of Lake Okeechobee.


Polyplex USA plans $90.6 million expansion in Decatur, Ala.

Polyplex USA has announced plans for a $90.6 million production expansion at its Decatur facility, with the additional hiring of 100 workers.. The expansion will increase the capacity to produce BOPET, a material used in packaging, electrical and industrial applications. It will also give Polyplex’s Decatur facility the largest capacity BOPET film line in the world.


Alabama’s Poarch Band of Creek Indians plans $541 million Virginia casino resort

Alabama’s Poarch Band of Creek Indians is planning a $541 million resort project in Virginia. Wind Creek Hospitality announced it has formally submitted a proposal to the City of Richmond to serve as its preferred casino gaming operator. On the drawing board is a two-phase project that will include 100,000 square feet of casino space, two hotel towers, seven restaurants, a spa, indoor pool, fitness center and a family-friendly entertainment center.


Omatic Software expanding in Charleston County, S.C.

Omatic Software, a company that provides data solutions for nonprofits, has announced plans to expand operations in Charleston County. The $450,000 investment will create approximately 100 new jobs.


Hankook Tire announces major expansion in Clarksville, Tenn.

Hankook Tire is embarking on the phase 2 expansion of the South Korean-owned Clarksville tire plant, bringing its total investment there to about $1 billion. Hankook Tire opened in Clarksville in 2017, and currently employs about 1,000 people.


Owens Corning plans expansion in Fort Smith, Ark.

Ohio-based Owens Corning is building a new 550,000-square-foot manufacturing plant in Fort Smith that will replace the existing roofing materials plant the company built in 1984. The estimated $115 million project is expected to add five jobs to the current workforce of 79.


Sewing factory coming to Buchanan County, Va.

Sewing factory Maine Five will move into Buchanan County’s industrial park building in Council, Va. The $350,000 investment brings 12 new jobs to start, and up to 100 within five years.


Pall Corporation creating 400 jobs in Duncan, S.C.

The Pall Corporation, a company that specializes in filtration, separation and purification systems, will be investing $30.2 million into a new facility in Spartanburg County that will support the development and production of vaccines and therapeutics, including a COVID-19 vaccine. The project will create 425 new jobs.


Oven manufacturer adding jobs in North Carolina expansion

The North Carolina Rural Infrastructure Authority has approved a grant for the expansion of Unox Inc.’s North American headquarters in Lincoln County. The Italy-based oven manufacturer will invest $3.1 million and add 27 new jobs to the facility in the Charlotte region.


3D printer manufacturer investing $13 million in South Carolina HQ

3D Systems, which developed the Stereolithography 3D printing process in the mid-1980s, will invest $13 million to add a 100,000-square-foot building to its existing headquarters campus in Rock Hill, S.C. Fifty new jobs will also be created.


Window maker expands in Florida

SIW Solutions, a Delray Beach-based maker of windows and doors designed to withstand hurricanes, will open a new manufacturing facility in West Palm Beach. The company plans to add 100 new jobs there.


Power management company moving from California to Virginia

Power management company Eaton will invest $3.6 million to move production from California to its facility in Eastern Henrico. The move will create 80 new jobs with the expansion of production and the addition of new lines for electrical component manufacturing.


Toyota West Virginia expanding Buffalo facility

Toyota Motor Manufacturing West Virginia (TMMWV) will invest $210 million to upgrade existing engine production and add 100 new jobs to increase capacity of its four-cylinder engine line. Once complete, TMMWV’s total investment will be more than $1.8 billion and total employment will exceed 2,000 at the Buffalo facility.


Brown-Forman confirms $95 million distillery expansion in Louisville, Ky.

Brown-Forman has now confirmed it will progress with the $95 million expansion of its Louisville site (located in Shively), which will double the capacity of the facility. One of the largest American-owned spirits and wine companies (and the maker of Old Forester and Jack Daniel’s, among others) first revealed it was considering an expansion of its Louisville distillery in November 2020.


Scentsy establishing operations in York County, S.C.

Scentsy, a distributor of scented products such as aromatic diffusers, has announced plans to establish operations in York County. The $6 million investment will create over 200 new jobs in the first year.


West Pharmaceutical creating jobs in Lenoir County, N.C.

West Pharmaceutical Services will invest $50 million to expand its manufacturing facility in Lenoir County. The company will receive $500,000 in grant support as the Kinston location is contributing components that are being used to fight against COVID-19.


Forklift manufacturer to create 130 new jobs in Lenoir County, N.C.

The Crown Equipment Corporation, a forklift manufacturer, is expanding its operations in Lenoir County and investing up to $13 million in the project. A performance-based grant of $400,000 from the One North Carolina Fund will help facilitate the expansion.


Airbnb tech hub bringing “hundreds” of jobs to Atlanta

San Francisco-based travel and vacation rental platform, Airbnb, is bringing its new technology hub to Atlanta with a plan to eventually host “hundreds” of jobs. An exact location there has not been announced.


Massive Lowe’s distribution center coming to Hanover County, Va.

A 1.1 million-square-foot distribution center for Lowe’s Home Improvement is in the works on a roughly 200-acre lot in Ashland, Va. The $50 million facility is expected to bring more than 100 new jobs to area.


Coca-Cola moving from Lakeland to Winter Haven, Fla.

Coca-Cola Beverages Florida is expanding and jumping about 16 miles from Lakeland to Winter Haven, adding 170 Polk County jobs. The Lakeland facility currently employs 182 people.


VW axle supplier adding 240 jobs in Tennessee

A Spanish supplier of Volkswagen components is expanding its presence in the United States, adding a large new factory in Chattanooga. Sesé Industrial Services will build a new 300,000-square-foot facility, complementing the company’s existing Sesé Logistics operations in the city. With an investment of $42 million, the new plant will produce axle components for VW’s electric vehicle line. The company plans to employ 240 people at the factory.


Charlottesville-based maker of indoor farming systems moving HQ to Richmond, Va.

A Charlottesville-based startup company that makes indoor hydroponic farming systems is moving its headquarters to Richmond with plans to hire about 24 people over the next few years. Babylon Micro-Farms will occupy a facility in Richmond, which will serve as its headquarters and as a research and development facility.


Grant for Cullman, Ala., manufacturer could mean 125 new jobs

A grant to the REHAU facility in Cullman, Ala., will allow the company to expand and hire 125 new employees. REHAU produces plastic-injection products that are used in the manufacturing of Alabama-built vehicles, including Mercedes.


New project at Missouri airport will bring more Jobs

In a partnership with American Airlines, the Springfield-Branson National Airport is building a new airline maintenance base. The $11 million project will allow the facility to hang onto at least 80 good-paying jobs, and add more in the future.


New jobs coming to Henderson County, N.C.

A high-tech agri-business has transformed an empty field in Hendersonville to a futuristic model of sustainable agriculture, and is now preparing to hire over 55 new employees. BrightFarms broke ground on what will be a 280,000-square-foot hydroponic greenhouse in Henderson County back in June 2020.


Nippon Express completes Huntsville Logistics Center

Nippon Express, based in Tokyo, has completed construction of its Huntsville Logistics Center in Huntsville, Ala. The Center will handle distribution for Mazda parts manufactured by Mazda Toyota Manufacturing.


Charlottesville-based pharmaceutical company expanding in Virginia

Afton Scientific, which supports the life sciences industry, will invest $500,000 to expand its operation in Albemarle County. The company will add 20 new jobs and 8,000 square feet to its facility just outside of Charlottesville.

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