Thank you very much for that kind introduction. And thank you, all of you, for your hospitality.
And thank you to your state for its continued engagement with the Commerce Department’s SelectUSA Investment Summit.
By attracting foreign companies, South Carolina helps supply chains and creates U.S. jobs far beyond your local communities. Your state is a leader in advanced manufacturing. You’ve done an incredible job modernizing your industrial enterprise by attracting some of the world’s most respected companies: BMW, Boeing, Michelin, Volvo and Samsung, to name just a few.
And your state has done what every other state needs to do: embrace the challenge posed by global competition by committing to the investments and incentives required to attract and retain industry.
You have made your manufacturing heritage and strategic location on the East Coast into a powerhouse in foreign trade, with the current $2.4 billion investment that is upgrading South Carolina ports.
This is a state that truly lives by its motto: “Dum Spiro Spero” — Latin for, “While I breath, I hope.” This motto is especially appropriate with the resolve your state has shown after being battered by such ferocious tropical storms.
But how could you not have hope when you live in South Carolina? It is spectacularly beautiful. You have an abundance of resources. You cannot beat the seafood, the culture, or the wonderful way you treat tourists whether they’re in Greenville or Charleston. We had a great meal last night at Hall’s Chop House – fried green tomatoes, okra, and steak. It was a heck of a meal. There are impeccable beaches, and exquisite resorts along the Grand Strand. And plantations down around Beauford. And, of course, you have “Messie,” the Lake Murray monster. Although I must confess, I don’t know anyone who has actually messed with “Messie.” But I’ve seen some photos.
Thank you to Jim Newsome and your team at the South Carolina Port Authority for organizing this event, and for being such proponents of local manufacturers generating exports and the wealth that sustains so many communities in your state.
I am pleased to recognize Jim for his work on the Commerce Department’s Advisory Committee on Supply Chain, as well as Bill Hanson, Vice President of Great Lakes Dredging, another member of the same advisory committee. It is important for American citizens to be civically active at every level of our society, and we thank you for your service. Bill’s company also is doing great work here at the port.
As Secretary of Commerce, I am engaged every day, implementing policies with just one goal: creating jobs and prosperity in the United States of America. We are extremely busy on many fronts. For example, we are working on additions to the Buy American, Hire American Executive Order to make sure federal contractors are using American-made building materials for their large infrastructure projects. With that in mind, congratulations to awarding your dredging contract to Great Lakes Dredging — an American company — to deepen the Charleston Port to 52 feet.
Having American companies do this type of infrastructure work builds trust in the American system of governance. It generates jobs, and the revenue American companies need to fund innovation and stay competitive. It also generates additional tax revenue.
Tomorrow, I am scheduled to be back at the White House, to promote the training of American workers, something South Carolina is very, very good at. In fact, you are an example for many of our states. Every day, executives from companies large and small say that their biggest difficulty is finding qualified workers. We’re trying to address this issue.
I co-chair with Ivanka Trump the newly created National Council for the American Worker. We are developing a National Strategy for training America’s workers for high-demanding industries.
Tomorrow, the White House will honor the companies that already have signed a “Pledge to American Workers.” This pledge will demonstrate that these companies will provide training, continuing education, and apprenticeships to six million workers over the next five years. Those are the companies that we are celebrating tomorrow. And that number of people who will be trained equals the total number of unemployed people in our country. So, it’s a remarkably well-scaled program. If you have not already done so, I invite the companies here today to consider signing the Pledge and adding to the six million people who already will be trained.
This is an example of the types of activities in which we have been engaged every day of the 21 months since the inauguration of President Trump. And we have achieved successes that were unimaginable prior to his presidency.
We have reformed the tax code to make American companies and industries globally competitive. We are successfully reducing the burden of needless regulations and permitting delays on American businesses. And we are addressing unfair foreign trade practices that have continued for decades at the expense of American industries and American workers. It’s working!
The Commerce Department last Friday reported preliminary GDP growth in the third quarter at 3.5 percent. This growth would have been higher, had it not been for Hurricane Florence. That historic storm caused an estimated $60 billion in damages to property, vehicle losses and lost output. The losses shaved a few tenths of a percentage point from GDP growth in the third quarter.
So, GDP growth was down slightly from the 4.2 percent rate in the second quarter of this year, but it is still much higher than a few years ago when 2 percent growth was considered to be — quote — “the new normal.” Back then, I called that forecast “the new dismal.” Since then, the U.S. unemployment rate now has dropped to 3.7 percent.
There are only 6 million people unemployed in the United States. But, happily, there are 7.1 million job openings, an all-time high, 1.1 million more openings than unemployed people. And nearly half a million of these job opportunities are in manufacturing. Manufacturers are more optimistic than ever before in the history of the National Association of Manufacturers’ survey. And we have created 378,000 manufacturing jobs since President Trump took office. Those of you in South Carolina know how important a manufacturing job is to the local economy.
Let me discuss our trade policy in the context of our goals, and our tactics to achieve them. Many of you worry about a trade war and the President’s aggressive tactics, but this is an administration you really must judge by its results, not just by its soundbites. Results are what count. And we are achieving results. There is never a perfect time for a trade spat, but right now, our economic momentum provides us close to a perfect time to address these long-standing issues.
I begin with two questions: Does anyone doubt that China’s trade surpluses with us have boosted their economic growth? Second question: If their surpluses with us have been good for China, how can our trade deficits with them not be bad for us? Deficits do matter!
In 21 of 23 major product categories, Chinese tariffs are higher than ours. The same is true of the European Union. This is not a natural competitive advantage. This is protectionism.
Needless to say, our trade deficits with China last year reached $376 billion — a 2 percent subtraction from our GDP, and, when you think about it, that is more than $1 billion per day we are losing to them. Another way to look at it is that it is over $40 million per hour! 24 hours a day! 365 days a year! And with the EU, our trade deficit topped $151 billion. That’s $400 million per day. Too much! Way too much!
Here’s how it happened. Right after World War II, the United States was the unquestioned economic power in the world and had more trade surpluses. So, it became official U.S. policy both to provide direct aid to Europe and to Asia such as the Marshall Plan, and to make systematic trade concessions to which we unfortunately remain bound today, decades later. Concessions made to China, Germany, or Japan might have been correct 60 or 70 years ago when those economies were small, but are no longer appropriate today.
Both China and Europe espouse eloquent free-trade rhetoric, but in actual practice, they’re far more protectionist than the U.S. So, our main objective is to make their real-world behavior match their free-trade rhetoric.
The United States let China into the WTO on the theory that they would abide by the rules. But foolishly, there was no effective enforcement mechanism in case they did not live up to their obligations. This blunder is why we are having problems with China today. China continues to flout the norms of global trade, and it has gotten worse, not better, challenging the predictions made when China was admitted to the WTO.
The industries of the future must be located in the United States, to provide jobs to the next generation of skilled and highly paid workers.
Our objective is not high tariffs. In fact, it is not tariffs at all. Our objective is trade that is free, fair, and reciprocal with neither subsidies nor non-tariff barriers, and with proper respect for intellectual property rights.
President Trump, unlike many politicians, remembers the promises he made during the campaign, something he shares with the governor here. He keeps track of them, and he lives up to them. He is simply not going to violate his commitment to U.S.-based producers and workers in trade negotiations.
These producers can very well be foreign-owned companies that operate on our soil. We welcome them. And we fully support our SelectUSA program that actively encourages Foreign Direct Investment in the United States. We embrace wholeheartedly the operations of BMW, Michelin, Volvo, Samsung, Teijin, and all of the other foreign-owned companies and producers that have opened factories in South Carolina. We want to encourage them to expand and conduct R&D here.
We also continue to defend American production against unfair trade practices. During the last fiscal year, the Commerce Department completed 436 antidumping duty and countervailing duty actions, the highest number of such determinations ever.
President Trump and I are convinced that the United States could not field a modern military if the country lost its ability to produce steel or aluminum. Last March, he placed protective tariffs on these products. Since then, the United States is experiencing a revival of these industries. Thirty new steel production facilities have been announced; and so have 10 major new aluminum production plants that are either online or will soon be online.
President Trump has directed the Commerce Department to conduct a Section 232 investigation into automobile and automotive parts. This investigation has brought the European Commissioner to the bargaining table. The President has promised not to impose auto tariffs on Europe as long as negotiations are making progress. We are also initiating trade negotiations with Japan and Britain. We have renegotiated the Korea Free Trade Agreement.
And we just finished the U.S.-Mexico Canada Agreement. This agreement will result in tens of billions of dollars of new sales for American manufacturers and American farmers. For companies in automotive, agriculture, pharmaceutical, electronics, financial services, digital commerce, and international trade, the benefits are real, and they will be powerful. We are eliminating the imperfections that existed in the old NAFTA deal that let foreign materials from outside NAFTA for components, parts, and products flow freely into the U.S. market at the expense of U.S. producers. But now, the 75 percent domestic rules-of-origin in the new USMCA — up from 62.5 percent under the former agreement — will generate a new wave of investment in U.S. factories.
Domestic companies that have shifted to Asia and elsewhere will be coming back to North America. We also require that between 40 to 45 percent of domestic content be made by employees whose wages are $16 an hour or higher. This will help American producers get their fair share of the volume we bring back. USMCA has also opened new markets for American producers of poultry, eggs, cheeses, milk and other agricultural products.
Mexico is revising its sanitary and phytosanitary rules, which had no scientific basis, and were used just as a means for protectionism. The new rules-of-origin should bring more auto jobs to South Carolina. There are additional provisions regarding intellectual property protection, digital trade, currency manipulation, and disciplines on state-owned enterprises. We negotiated new provisions to combat duty evasion that should greatly restrict the ability of countries to illegally trans-ship goods to the United States through Mexico and Canada.
All in all, the USMCA is a big win for the United States, but also a good win for Mexico and Canada because the targets were countries outside of our region, trying to steal business within the region.
Finally, we must do everything in our power to boost exports. The Commerce Department has a strong and active District Export Council located here in South Carolina. The three Export Assistance Centers in South Carolina, including the one here in Charleston, are also run by the Commerce Department. They work with companies to open markets overseas and break down barriers to their exports.
Dorette Coetsee is in charge of the Export Assistance Centers in South Carolina. I recommend that manufacturers located here — especially those in the supply chains of the major OEMs — contact Dorette and her staff in order boost exports and engage actively in global supply chains.
I thank all of you for everything that you do for our country. And now I’m going to leave the stage and try to get a picture of “Messie.” Thank you.