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As US factories falter, White House insists economy is like ‘a rock’

This article is more than 12 months old

His trade wars have led to factory closures, layoffs and lower consumer confidence

WASHINGTON After a brief surge during his first years in office, and despite his lofty promises, the American manufacturing rebound has begun to crumble under President Donald Trump.

Auto plants and steel mills are shutting down. Companies are announcing layoffs and furloughs. Factory output is in the red.

The year-end outlook is grim, whipping up fears that as the global economy slows, Mr Trump's trade wars with China and Europe - with tariffs on hundreds of billions of dollars of goods - could push the world's largest economy over the edge and into recession.

Throughout last month - as job creation slowed, key indicators fell, consumer confidence waned and factories spun down - Mr Trump attacked Democrats and the Federal Reserve, anything but his trade policy, while accusing the media of "begging" for a recession.

"The PMI manufacturers' index has gone substantially up," Mr Trump said during a Sept 25 news conference.

"Our country is the strongest it has ever been economically."

Not so. The most closely watched gauge of US factories' health - the Institute for Supply Management's (ISM) manufacturing index - had just fallen into the red in August for the first time in three years.

And a week after Mr Trump spoke, it fell to the lowest level since the Great Recession.

Mr Tim Fiore, chair of the ISM manufacturing survey, told AFP the drop-off this year was the steepest in this century.

"It is like a nosedive," he said, warning that recession risks were mounting.

As of August, Wisconsin, Pennsylvania, North Carolina and Michigan had fewer people working in manufacturing than they did at the end of last year, according to Labour Department data.

But in an irate television appearance, Mr Trump's senior trade adviser Peter Navarro accused the news media of "singing some song" about a weakening economy.

"This Trump economy is strong as a rock. Manufacturing is strong as a rock," he said in a tirade on CNBC.

He said highlighting Pennsylvania's job losses was merely "cherry-picking the data".

Louisiana's Democratic Governor John Bel Edwards on Sept 30 blamed Mr Trump's trade wars for the bankruptcy of Bayou Steel, which put nearly 400 people out of work.

In Michigan's Oceana County, where Republican support surged in the 2016 election, a steel foundry operated by train manufacturer Wabtec announced last month it would close by year end and lay off 61 workers due to "declining business conditions".- AFP

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