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From Site Selection magazine, January 2017

It Just Might Work



Analysis in this issue of the Trump win is guardedly optimistic as the new administration takes over this month. Geopolitical expert Peter Zeihan’s brilliant introduction to our State of the States report posts some warning signs on the trade front, and those are well placed. More on that in a minute. 

We’ve reported in these pages many times on reshoring, which is no longer a new phenomenon. We do so again in this issue with insights from Harry Moser, founder of the Reshoring Initiative, who urges readers to re-do their offshore cost analyses and perhaps discover they could have been more cost effective in the US all along — and to do it before Trump calls to strong arm them into doing so, as was the case with Carrier a few weeks ago. Sure, there’s probably more to that scenario, but does anyone doubt The Donald’s intention to deeply curtail offshoring? Moser points to the route for getting there: “For President Trump and Congress to implement policies that make the US the most profitable location to produce for the US market, eliminating the need for interventions” — calls from the White House, or Mar-a-Lago, I expect he means. 

Moser recommends “massive skilled workforce training, lower corporate tax rate, a value-added tax (VAT) as in Europe, reduced regulations, reduced healthcare costs and fairer trade agreements.” I’m not sold on the VAT yet, but the rest would go a long way toward reversing the US decline in measures of national business climates under way for the past decade. The Index of Economic Freedom from the Heritage Foundation and the Wall Street Journal is a good example. The US was 11th of 186 countries in 2016. I remember when it was very near the top.

Back to trade for a minute, which, again, is one source of concern for those in global commerce, as most Site Selection readers’ organizations are. Cutting through the rhetoric of “ripping up existing trade agreements,” we can be certain lots of trade deals will be scrutinized as never before to make sure the US and its private sector — the part that creates jobs — are best served. A White House National Trade Council was announced as this issue went to press, to be led by Dr. Peter Navarro, professor of economics and public policy at the University of California at Irvine’s Paul Merage School of Business. 

Jay Timmons, president and CEO of the National Association of Manufacturers, had this to say about that: “Great things are on the horizon for manufacturers. Americans voted for change this election, and we’re energized by President-elect Trump’s continued strong commitment to manufacturing in the United States. Today the President-elect sent another clear signal to the millions of Americans employed in manufacturing that they will be ‘put first’ in his administration. We welcome the President-elect’s decision to put action behind the force of his words with the formation of the White House National Trade Council. We look forward to working with the President-elect and Dr. Navarro to enact the policies we need to strengthen and grow manufacturing in America.”

We report on manufacturing location decisions wherever they occur — in the US or not. I hope US companies that locate in offshore markets to be nearer their customers or for other legitimate reasons aren’t unfairly penalized for doing so. But we also report on business climates — local, state and national, which are primary drivers of those decisions. Our reporting on the US market as a destination for capital investment will keep pace with, if not anticipate, how what we know today plays out. Let us know how this new landscape changes your organization’s location strategy — we’re in this together, no matter what unfolds. Meantime, Happy New Year!

Till next time,

Mark Arend
Editor in Chief

Mark Arend
Editor in Chief of Site Selection magazine

Mark Arend

Mark Arend has been editor in chief of Site Selection magazine since 2001. Prior to joining the editorial staff in 1997, he worked for 10 years in New York City at Wall Street Computer Review, ABA Banking Journal and Global Investment Technology. Mark graduated from the University of Hartford (Conn.) in 1985 and lives near Atlanta, Georgia.


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