| I’m Mark Niquette, a US economy reporter in Columbus, Ohio. Today we’re looking at the challenges of bringing back manufacturing jobs to the US. Send us feedback and tips to ecodaily@bloomberg.net. And if you aren’t yet signed up to receive this newsletter, you can do so here. - The Trump administration is weighing a dramatic tariff reduction during weekend talks with China to de-escalate tensions and temper the economic fallout.
- China’s export growth rose even as shipments to the US slumped sharply in the first month after President Donald Trump hit its goods with tariffs above 100%.
- Federal Reserve Governor Michael Barr said US trade policies could put the central bank in a difficult position by generating persistent inflationary pressures and higher unemployment.
Both Democratic and Republican presidents have tried to revitalize US manufacturing, using the carrot of tax incentives and subsidies and the stick of tariffs to bring production back home. Neither have really worked because the challenges to re-industrialize a country that has been de-industrializing for decades are so monumental. The federal incentives approved in 2022 under President Joe Biden helped spur record factory construction, and there was a spike in job announcements from reshoring and foreign direct investment tracked by the Reshoring Initiative, a nonprofit that advocates bringing manufacturing back to the US. But reshoring job announcements declined in 2023. And they have been basically flat since then as Trump enacted sweeping tariffs to spur what he calls a “manufacturing renaissance” in the US by encouraging companies to make goods here to avoid the duties. Trump points to investment announcements so far including Apple Inc.’s $500 billion plan as proof tariffs are already working. But many of those were tentative or already in the works. Some manufacturers who had plans to open factories in the country say the new duties are only adding to the significant obstacles they already faced. The machinery and raw materials they need to make goods in the US simply aren’t available in the country and have to be imported — and Trump's tariffs have made them unaffordable. To make big, long-term investments, companies also need some degree of confidence about the outlook and where levies may land in the long term. They’re not getting it from Trump’s ever-changing tariff announcements and his back-and-forth on trade deals negotiations. Nora Orozco, who wants to open a Texas factory with 200 additional jobs for her footwear company Evolutions Brands, summarized the sentiment of many other business owners. “I like the idea of onshoring, but this makes it impossible for us,” she said. The Best of Bloomberg Economics | - The European Central Bank must lower interest rates further, Gediminas Simkus said, with Olli Rehn also backing a June move.
- Gains in Japan’s wages cooled more than expected in March while early trade figures for April showed export growth slowing, adding to the case for the Bank of Japan to proceed cautiously with rate hikes.
- Mayor of London Sadiq Khan will “actively explore” building on the city’s green belt in what would amount to the biggest change to housing policy since the 1960s.
- India’s central bank doesn’t expect wild swings in the rupee but is ready to use foreign reserves to preserve currency stability as tensions with Pakistan escalate.
- The town known as the launchpad of the Brazilian diaspora in the US is facing a grim homecoming thanks to Trump’s mass deportation plans.
China’s exports are seen contracting by about 10% in April after growth began to slow down around mid-March, according to a new Bloomberg Economics daily tracker. The decline in the the Bloomberg Economics China Exports tracker is in line with high-frequency measures of outbound shipments to the US showing a sharp drop in late April and coinciding with the jump in US tariffs on goods from China, economist Ana Galvao and analyst Hanqing Ye wrote in a note. However, the tracker is well below the consensus forecast of a 2% increase. The new tool uses estimates of export volumes at China’s ports from the International Monetary Found’s PortWatch tool, as well as freight costs and the effective exchange rate to track China’s monthly exports in dollars. A comparison with official data since 2020 shows the readings have correctly identified turning points over the period — even though the tracker doesn’t always align with the reported figures. Read the full research on the Bloomberg Terminal, click here | 
