The Trump Presidency: Be Careful What You Wish For

Amid optimism that the incoming Trump administration will boost American manufacturing, officials of the Plastics Industry Association (PLASTICS), formerly known as SPI, are pressing for at least five regulatory reforms.

They are:

  • Timely development of regulations under the “new” Toxic Substances Control Act (TSCA). The hope is that federal regulations will prevent “conflicting state-by-state rules which would make compliance impossible”.
  • PLASTICS wants the Trump Administration to remove the Occupational Safety and Health Administration’s (OSHA) control of hazardous energy or lockout/tagout (LOTO) standard (29 CFR 1910.147).  The standard impedes application of newer, safer controls, in the trade group’s view.
  • Administration resolution of environmental rules that could increase electric power costs.
  • Withdrawal of the Department of Labor “Overtime Rule”, which could add “significant administrative burdens and greatly increase operating costs for all businesses in the US.”
  • Review of OSHA’s Improve Tracking of Workplace Injuries and Illness rule, which requires employers to submit injury and illness data to OSHA.

In a Webinar yesterday, PLASTICS CEO Bill Carteaux said that the list was reviewed with the Trump transition team in December, and that there is a feeling among business people that there could be a return to the 1980s, when Ronald Reagan was president. Reagan famously took on unions such as the Teamsters and air traffic controllers and attempted to create a more business-friendly environment. Like Reagan, Trump also supports stimulation of the economy through large tax cuts.

Of course, there are some huge differences between the Reagan and Trump economic agendas, and the trade issue could be a tremendous problem for the American plastics industry, which enjoys a trade balance.

Reagan was a free-trader, and stated: “Our trade policy rests firmly on the foundation of free and open markets.” The Reagan administration launched the Uruguay Round of multilateral trade negotiations in 1986 that lowered global tariffs and created the World Trade Organization.

Trump wants to renegotiate or dump NAFTA, and slap a 35 percent tariff on products made in Mexico and sold in the U.S. He also wants to impose similar tariffs on Chinese imports, which could spark a trade war. He also opposed the Trans Pacific Partnership.

The American plastics industry has an $11 billion trade surplus with Mexico, and also has a trade surplus with Canada.

As Trump takes office, plastics manufacturing in the United States is in very good shape, particularly in comparison to 2008-9 when financial deregulation contributed to the worst economic meltdown since the Great Depression, and the liquidation of many plastics processors.  

According to a report reviewed by Carteaux, the American plastics industry generated $418 billion in shipments in 2015. Another $153 billion was generated by upstream businesses. Employment in plastics manufacturing industry grew 0.3 percent annually from 1980 and 2015, while employment in all of U.S. manufacturing fell 1.2 percent per year during that period. That reflects growing penetration of plastics in transportation lightweighting, medical and other applications, as well as the beneficial impact of the shale oil boom.

No doubt PLASTICS has a case for what seems a modest regulatory wish list, and undoubtedly there was a federal regulatory overreaction since 2009, particularly in the financial realm. It’s hoped we can also expect good news on taxes, including on the R&D tax credit  at the very least.

But the trade position of President-elect Trump could create dangerous consequences for all American businesses.

 

 

 

About Doug Smock

Former Chief Editor at Plastics World and Senior Technical Editor Design News
Management, North America

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