Commerce Secretary Upbeat About Economic Recovery
YOUNGSTOWN, Ohio – U.S. Secretary of Commerce Wilbur Ross delivered an upbeat assessment of the future of the U.S. economy on Wednesday – and a couple stimulus checks — as the country continues to wrestle with the effects of the coronavirus pandemic.
“I believe that we will have a very sharp recovery provided the coronavirus doesn’t get totally out of hand,” he told reporters after touring America Makes, an advanced manufacturing hub established during the Obama presidency.
Until then, small companies are likely to require stimulus funding to remain in business. The secretary took the opportunity to announce a $5 million Economic Development Agency grant to the Mahoning Valley Economic Development Corp. that would be used for bridge financing to help small businesses and entrepreneurs survive the global health crisis.
The money would be drawn from the $2 trillion Coronavirus Aid, Relief and Economic Security, or CARES, Act, which Congress passed in March. The legislation provides economic relief to families, workers and businesses adversely affected by the coronavirus pandemic.
“Our administration is committed to helping businesses and workers get the resources they need to rebound from the challenges caused by this awful disease,” he said.
U.S. Rep. Tim Ryan, D-13, said the money would be used to capitalize a revolving loan fund that small businesses affected by the pandemic could access.
“The Mahoning Valley Economic Development Corp. has been a great partner to our small businesses in the Mahoning Valley for years, and I am proud of the work they have done,” he said in a statement. “As we continue to face the difficulties created by the COVID-19 crisis, this funding will be a lifeline for many businesses that are seeking the capital they need for continued success.”
Teresa Miller, MVEDC executive director, said the agency is excited about using the grant to assist those local businesses in need. “MVEDC is proud to be the recipient of an award that will help our region respond to this unprecedented challenge by implementing strategies to help small businesses keep their doors open and their employees at work,” she said in a statement.
Ross also announced another $1.4 million Dept. of Commerce grant to America Makes, which conducts research and development to encourage the use of additive manufacturing. The grant is targeted toward helping America Makes member companies to expand production of personal protection equipment during the pandemic. He said the stimulus would help boost production of PPE from 240,000 units to 400,000 units per week using additive manufacturing technology.
“This investment comes at a crucial time as Ohio’s economy rebounds from the biggest economic shock that I can remember,” the secretary said.
Ross said the economy is likely to rebound at a much faster rate than the previous recession in 2008-2009. That recession was plagued with fundamental problems in the economy and the financial sector, whereas this crisis was precipitated by “non-economic” factors.
“Consumers are saving at an annualized rate of $4.1 trillion,” he said. “When the states reopen, that will be put into the economy and trigger demand for manufactured products, demand for leisure-time activities and create need for more workers.”
Thus, consumers are in a much healthier position than they were in 2009 to help drive the recovery. “Consumer spending is what led the big recovery under President Trump and so it will again lead the recovery coming out of coronavirus.”
He noted 78% of the workers without a job believe that the downturn would be short-lived. “That’s a tremendous difference in consumer confidence” than in 2009, he said, citing indicators such as an expanding housing market and improving automobile sales.
As to how the Trump administration’s trade policies – especially tariffs – could impact the recovery, Ross pointed to the newly minted U.S.-Mexico-Canada Agreement, or USMCA, which replaced NAFTA as of July 1. Under the new pact, the United States, Mexico and Canada have agreed to boost labor standards, manufacturing requirements and intellectual property protections between the three countries.
“It’s the biggest and I think the best trade agreement we ever made,” Ross said. “It’s designed to re-focus manufacturing within the three countries.”
The new agreement includes provisions that mandate 75% of the content in domestic automobiles be manufactured in the U.S., Mexico and Canada. Also, USMCA mandates that 40% of what goes into a domestically manufactured vehicle must be made by workers earning a base rate of $16 an hour.
“It will ensure we get our fair share of the jobs brought back from Southeast Asia,” the secretary said.
John Weber, spokesman for the Democratic National Committee, released a statement in response to Ross’ visits to Ohio and earlier in Pennsylvania, slamming the Trump administration’s trade initiatives.
“Donald Trump’s lackeys can’t deny his three and a half years of disastrous trade failures that have cost jobs and devastated our economy,” he said. “Instead of standing up to China and protecting American jobs, Trump lost the trade war he started and left working families to deal with the consequences.”
Ross’ tour of America Makes was followed by a roundtable discussion with local business and community leaders. The roundtable was closed to the press.
“It’s nice to see that D.C. has Youngstown on its radar and they want to hear our concerns,” said Claudia Kovach, corporate secretary for City Machine Technologies in Youngstown, who attended the roundtable.
Copyright 2020 The Business Journal, Youngstown, Ohio.