TAG Industrial Watch: November 30, 2024

When President Trump began a trade war with China in 2018 to increase domestic manufacturing and reduce America’s dependence on foreign goods, America’s manufacturing output stood at $6 trillion annualized and our annual merchandise trade deficit was -$870 billion. Trump’s tariffs and additional duties levied by Biden are still on the books yet manufacturing output has slipped to $5.7 trillion (adjusted for inflation) and the trade deficit through the first three quarters alone this year has surpassed the full year of 2018 at -$872 billion, deepening -10% year-over-year (FRED, U.S. Census Bureau). Aside from the argument that a lack of tariffs is not the cause of our manufacturing slump and unprecedented trade deficits and therefore not the correct remedy, TAG has been covering another reason why these tariffs haven’t been effective. American companies are now bypassing Chinese tariffs by importing goods indirectly through our southern neighbor, fueling the nearshoring movement that has made Mexico our top importer.

Instead of changing policies, Trump has recently touted a plan to close the loophole by tacking on a 25% tariff on goods imported from Mexico and Canada, a move that would offset his own renegotiated free trade agreement among the three nations (CNBC). While closing the nearshoring loophole in theory would help reduce imports and thus our trade deficits, the economy would actually be weaker and not stronger. The U.S. imports goods that we don’t have the capacity to produce ourselves and most of these goods are not for direct consumption but capital goods used in domestic production. Without an increase in domestic savings and production, simply isolating ourselves from global trade through tariffs will lead to less production, consumption, and thus a need for industrial real estate here at home.

I N D U S T R I A L   N E W S

Automaker Shares Fall As Trump Threatens
25% Tariff On Mexico And Canada
CNBC – November 26, 2024
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U.S. Import And Export Prices
Gain Unexpectedly In October
Seeking Alpha – November 15, 2024
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Gold Overtakes Euro To Become Second-
Largest Central Bank Reserve Asset
Money Metals – October 1, 2024
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Industrial Vacancy Begins To Plateau
As New Construction Slows
GlobeSt.com – November 19, 2024
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Recent Stock Market Rally Bypasses Industrial Reits,
A Signal Of Increased Caution Toward The Sector
CoStar – November 21, 2024
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R E G I O N A L   N E W S

Bell Textron Awaits DFW Factory Tax Breaks
Connect CRE – October 23, 2024
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Krusinski Construction Company To Build 788,000-Square-
Foot Spec Warehouse In Plainfield Business Center
REjournals – November 25, 2024
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OKT Lighting USA Signs 43,760 SF
Industrial Lease In South Houston
REBusiness – November 25, 2024
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Birtcher, Belay Sell DFW Light Industrial Portfolio
Commercial Property Executive – November 15, 2024
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Borderlands Mexico: Entrepreneurs, Small
Business See Value Of Investing In Mexico
Freight Waves – November 24, 2024
Read More