Tag Archives: USA

Data Shows US Businesses Growing

According to a report, the beginning of the year 2020 has seen a burst of growth in US business activity. This contrasts with slowing growth in many other major economies around the world.

Photo courtesy Isabel Alarco

Japan also saw a rise in business activity, helping pick up for the weak performance at the end of 2019. Europe was showing signs of slow growth in January, with exports from Europe stabilizing after a long decline. The service sector was still languishing.

The US economy is doing better than either Japan or Europe, and the prediction is that for the near future at least it will stay this way. The cooling down of the trade war between the US and China should also add a little boost to the economies of both countries and countries connected to them through trade.

IHS Markit, a data-gathering company, reported that its composite purchasing managers index in the US had reached 53.1 in January, up from 52.7 in December, the highest it has been in 10 months.

IHS also stated that, according to surveys, businesses in Europe and out will most likely remain slow and weak. Surveys of CFOs discovered confidence in the US market, but not as much confidence in the European and other markets. Some are expecting a stall in the 2020 economy.

Canadian and US Businessmen Fretful of Trips to China


North American businessmen have long been aware that traveling to China had its risks: executives with cellphones and laptops feared the theft of intellectual property and cyber attacks when in the biggest of all Asian nations.


But now the level of fear has been notched up to the next level.


Ever since the arrest of Meng Wanzhou on December 1st, traveling to China for business people hailing from the West, and especially North America, has been a nail-biting experience. Wanzhou, the head of giant cellphone maker Huawei, was arrested in Canada and her extradition was requested by the USA. She is charged with fraud because her company has allegedly had business dealings with Iran, a violation of US sanctions against the middle eastern country. Then the atmosphere intensified when Chinese officials stopped two Canadians, saying the pair was suspected of national security violations.


It is supposed by observers that the self-destructive mutual suspicions will not spiral out of control since neither side has any interest in provoking the people they want to do business with, and therefore will not publicly change their travel policies.


Unfortunately, sometimes mistakes are made. Last week the US tech company Cisco sent an email to their employees telling them that all non-essential trips to China would be suspended. The company caught the mistake and issued an apology stating that their travel policy to China had not changed.


American diplomats and businessmen will say in private that the two Canadians being held in China now is in retaliation for Meng’s detention, according to Craig Allen, the president of the US-China Business Council.


“If we don’t recognize that as a possible signal to American interests and to American businesses, then we would be willfully blind,” he says.

US Hosts Maritime Trade Talks with UK On Board the HMS Queen Elizabeth

Official Portrait of  Robert E. Lighthizer.

UK International Trade Secretary Dr. Liam Fox hosted several events designed to reinforce the economic relationship between the UK and the USA. The events took place on October 22, 2018 on board the UK’s Royal Navy’s HMS Queen Elizabeth, docked in New York Harbor.

The New York events come in the wake of the announcement by the US Treasury Secretary, Robert Lighthizer, that the US will commence talks with the UK to forge a new US-UK Free Trade Agreement to go into effect when the UK leaves the European Union.

The Department for International Trade presented a round-table discussion including some of the UK’s key computer companies. They presented their new technological advances to several US Fortune 500 companies in the hopes of forging some business partnerships.

The Secretary, Dr. Fox, spoke during the proceedings. He emphasized the ability of the UK to protect against serious cyber threats as they grow in number and danger. He announced a new sub-committee of the Board of Trade which will investigate what methods UK companies can use to grow the amount of imports in the cyber space, and how UK-US cooperation can improve the fight against cyber-attacks.

The floating backdrop of the great ship helped set the stage for Dr. Fox’s joining with the Maritime UK to host the very first Maritime Nations Forum between the US and the UK. The forum focused on the ways these two great sea-faring nations can improve maritime trade and relations.

Seven Billion Dollar Deal Could Bring 50,000 Jobs to US

The top and side of an iPhone 5S, externally identical to the iPhone 5. Photo courtesy of Calerusnak

Two high tech giants, Foxconn and Apple, are considering a deal to build a panel factory in the United States at a cost of about $7 billion and could create between 30,000 and 50,000 jobs. Chairman Terry Gou of Foxconn said that an investment by Foxconn’s Sharp division will depend on the terms negotiated for the deal at the state and federal levels.

The announcement of the deal comes close on the heels of President Donald Trump’s inaugural address in which the new president promised to make “America First” as the backbone of his policies leading the nation. Trump stated in his speech: “We will follow two simple rules: buy American and hire American.”

One of Trump’s campaign promises was to try and persuade Apple to bring the manufacture of iPhones to US shores. Trump said that he was optimistic that Tim Cook, CEO of Apple, had his “eyes open” to the possibility. Foxconn is the biggest producer of iPhones.

Gou said that Trump-style protectionism was inevitable, but he is unsure how Americans will feel about spending hundreds of dollars more for a phone that does not work any better than a less expensive model that was made overseas.

Gou vowed to increase his investments in China. Apple is also dependent on China, not just for production, but also for sales. Last year China made up 22 percent of Apple’s total revenue, some $46.4 billion.

Manufacturing Sees Shift from Asia Back to USA

Ironic Economics

In what some analysts see as a bit of economic irony, there is a slow but steady in the manufacture certain products away from Asia and back to North America.

“What you’re starting to see is the economics shifting more into the United States’ favor regarding sourcing from the United States versus sourcing from a low-cost country,”

said Daniel Meckstroth, chief economist at the Manufacturers Alliance/MAPI, a Washington trade group.

The irony is that it is precisely because the US is going through a slow economic period and China and India are experiencing brisk growth as their emerging economies surge that help US manufacturers to minimize the cost gap between them and their Asian rivals.

Wage Gap Closing

According to one consulting group it is even possible that by the year 2015 labor costs in China and the US could achieve parity. If the present Chinese inflation rate of 5.5% continues while the US maintains the lower 3.6% rate of inflation, and if Chinese wages continue rise at the present 15- 20 percent, then wages in the US and China could very well be indistinguishable.

Efficiency Helping US

In Milwaukee, at the Master Lock factory, the shift back to “made in the USA” is already happening in full force. Just two years ago the lock-making machinery there was only running a few hours a day because it was cheaper to order padlocks from China rather than making them at home.

Today the lock-making machine is running at a whirlwind pace seven days a week and three shifts per day. How can this be when wages are six times higher in the US than in China? The answer is because of superior efficiency. In Milwaukee locks are produced thirty times faster than in the factories in China, which more than makes up for the wage gap.

“I can manufacture combination locks in Milwaukee for less of a cost than I can in China,”

said Bob Rice, a senior vice president at the largest U.S. padlock manufacturer.

In the past two years Bob Rice has added about 80 workers to his workforce, which totals 440 at the moment, and could very well continue to rise. A good sign for the future of US manufacturing.