President-elect Donald Trump's promise of higher tariffs and targeted tax breaks could potentially boost 澳洲幸运5官方开奖结果体彩网:underperforming U.S. factories, but economists say those po🅘licies could also come with perils.

For several months, manufacturing survey data has shown that the industry is contracting. The monthly 澳洲幸运5官方开奖结果体彩网:Institute🌟 for Supply Management (ISM) manufacturing 澳洲幸运5官方开奖结果体彩网:purchasing managers' index (PMI) survey has been below 50% in every month over the past year except for March, when the index squeaked over the line at 50.3.

A reading below the 50% threshold indicates more respondents reported business contracting than those who s𝄹aid it is expanding. Economists have attributed the decline mainly to high interest rates and tighter lend🦄ing standards. 

One of Trump’s main economic proposals during his campaign has been 澳洲幸运5官方开奖结果体彩网:raising tariffs on goods imported from other countries, which he said would help attract more companies to 澳洲幸运5官方开奖结果体彩网:relocate factories back to the U.S. 𝄹 So, will Trump’s policies help rejuvenate the struggling manu๊facturing base?

The answer is unclear, and the outcome could d🐠epend on how tariffs are implemented. 

Ta𓃲rgeted Tariffs Can Help, But Broa🌸d Taxes on Imports Come at a Price

If tariffs are targeted ꦍto specific products or industries, they can help serve some goals, like protecting local goods producers. However, broad-based tariffs can actually undermine local manufacturing, ꦚaccording to a note by International Trade Economist Fariha Kamal.

“Evidence shows that the dramatic riseꩵ in U.S. import tariffs between 2018 and 2019 lowered exports and employment in the U.S. manufacturing sector,” Kamal wrote⛎. 

Broad tariffs also raise costs for imp♎orted materials that U.S. manufacturers use to make their products, she wrote.

“While tariffs on foreign goods provide protection to import-competing industries, they can have a net negative impact on output and employment because U.S. manufacturers rely on foreign inputs in their goods produc📖tion processes,” Kamal wrote. 

Manufacturers Mౠore Likely to Reroute Trade than Reshore

Bernard Yaros, lead U.S. economist at Oxford Economics, was also skeptical that the tariffs would lead to a significant amount of “澳洲幸运5官方开奖结果体彩网:reshoring” of American manufacturing capacity.

Aging equipment at factories that would need replacing, along with high labor cost෴s, make it unlikely that companies would bring factories back to the U.S., Yaros sai🍷d. Import taxes could, however, lead to businesses expanding their lines of supply to avoid some of these costs.

“Tariffs by themselves, especially if they are targeted as we expect, are more likely to lead to trade rerouting, rather than outr🐻ight reshoring,” Yaros sඣaid in an email.

However, while tariffs may not revive manufacturing, 🦹Trump could hel♒p the struggling sector through his tax policy.

“Policies such as 100% bonus depreciation and a 15% corporate tax rate for domestic manufacturers would provide a boost to US manufacturing, particularly production of business equipment,” Yarros said.