Trump's trade rhetoric worries Pa. business leaders but doesn't end support
Some of Pennsylvania's highest-profile business leaders are concerned about President Donald Trump's trade rhetoric with China as the administration struggles to walk a straight line.
Trump on Monday stated China and the U.S. are back at the negotiating table after the president last week put on administrative bravado by threatening to use an obscure law to command U.S. businesses to cut ties with China.
The flip-flops are doing no good for the economics-focused president, said leaders of the Pennsylvania Manufacturers' Association and Pennsylvania Chamber of Business and Industry.
"It's a hot-headed thing to say because it presumes powers the presidency does not hold," said David N. Taylor, president of the PMA, regarding Trump's order to cut ties with China. "A lot of time I wish the president was saying what he meant and not being so sloppy and imprecise."
Taylor would not say whether he would support breaking ties with China. But he emphasized that China has committed "acts of war" such as economic espionage and needs to be checked.
In his view, he added, the U.S. should use its economic strength to "reward our friends and thwart our adversaries," such as China.
Some take a calmer approach. Gene Barr, president of the Pennsylvania Chamber, said cutting ties with China isn't in the country's best interest but that addressing issues such as intellectual property theft remains vital.
"The uncertainty certainly has an impact on businesses," Barr said. "It certainly has an impact on the market. We’ve expressed our concern over utilizing tariffs here for well over a year. Our view is that there are legitimate reasons for having discussions with China."
The mixed signals come amid deceleration in U.S. economic growth, recent drops in the Dow Jones Industrial Average and what some say is a looming recession.
Trump said last week he "doesn't see" a recession coming, blaming the "Fake News LameStream Media" and Democrats for stoking economic fears. Both Barr and Taylor agreed that the recession is being used as a Democratic talking point.
Many experts, however, say indicators are suggestive of a pending economic downturn. One study released last week by the National Association for Business Economics shows 74% of economists expect a recession by 2021.
A recent inversion of the yield curve, when long-term interest rates sank below short-term ones, furthered speculation on Wall Street and among academics that a recession is coming. The last inversion was tied to the 2008 recession.
Critics say this month's inversion, which only lasted two hours, is fundamentally different than the one that foretold the stock market collapse in 2008.
Kevin Schreiber, president of the York County Economic Alliance, offered more pessimism than the statewide business leaders, emphasizing that it wouldn't be surprising to see the economy roll back after a decade of growth.
"Our economy enjoys predictability and stability," Schreiber said. "The market tends to like that. Any level of unpredictability has an inverse relationship with the market. When you inject that through tariffs and trade wars, that just lends some level of unpredictability."
The assertion that the U.S. economy has had a good decade still carries weight, including in Pennsylvania and York County. But statistics from the U.S. Bureau of Labor Statistics show Trump may not have been the catalyst.
The state's unemployment rate is at 3.8%, the lowest it's been in decades. York County's is even lower, with most recent statistics from last month showing a 3.3% unemployment rate.
However, the most significant drops in unemployment in the state happened under the Obama administration, between 2013 and 14, when in one year unemployment dropped by 1.4%. It has fallen only 1.1% since Trump took office.
York County has seen slightly lower results, as unemployment dropped by 1.3% between 2013 and 2014 and by 1.1% since Trump took office.
— Logan Hullinger can be reached at email@example.com or via Twitter at @LoganHullYD.