Carteaux: Trump 'more business friendly,' but also raises trade policy questions

President-elect Donald Trump's policies should generally bring a lot of opportunities for plastics companies, but the industry also needs to try to block Trump's stated plans to “unwind” trade agreements, according to the head of the U.S. plastic sector's largest trade association.

In a Jan. 11 industry briefing, the head of the Washington-based Plastics Industry Association, Bill Carteaux, said the Trump administration has a large potential upside for manufacturers, particularly in tax and regulatory policy.

But Carteaux also noted concern over Trump's statements calling for big changes in trade policy, saying that the plastics industry currently has a $7.1 billion trade surplus and benefits from trade deals.

“We will continue to work on tax reform with items that benefit the industry, like enhancing the R&D tax credit we helped make permanent at the end of 2015, at the same time fighting a rear-guard action on trade issues, like doing our best to keep the White House from unwinding NAFTA or other things,” Carteaux said.

“The outlook is positive but it's not without risks,” he said.

Carteaux spoke in a briefing to release the association's latest economic study of the U.S. plastics industry, which presented a generally positive outlook for what is the third-largest manufacturing sector in the U.S., after the oil and gas extraction and automobiles. Carteaux's comments are not the first from the petrochemical industry to broadly support trade, in reaction to the president-elect.

In a statement after the election, the American Chemistry Council said trade would be very important to “unlock potential” from $175 billion in new shale gas-related investments in the U.S. planned by the chemical industry, which is one of the country's largest exporting industries.

As well, the German plastics machinery association VDMA put out an unusual statement in late November praising trade deals and decrying protectionism, which the association said was in reaction to President-elect Trump's comments.

In broader terms, though, Carteaux said the manufacturing industry is hearing “very positive things” in Washington.

“I think from an overarching standpoint, from all indications, is this will be a much more business friendly administration,” he said. “One of the single biggest areas we should see some immediate relief is from some of the regulations that have stifled our industry and curtailed some of the growth.”

In a statement distributed after the meeting, the association highlighted key regulatory areas it said it presented to Trump transition officials.

They include implementing revisions to the Toxic Substances Control Act passed into law last year, and reviewing a variety of new rules, including for overtime, workplace safety reporting requirements, lockout/tagout machine guarding and ongoing EPA Clean Power Plant and Clean Water rulemakings.

“We have some things currently pending in some of the agencies,” he said. “We have brought those forward as well and hope those will be rolled back.”

Carteaux's comments come as lobbyists in Washington expect more focus on manufacturing, whether it's from the president-elect's “name and shame” tweets against specific companies and their overseas investments, or from the nomination of Wilbur Ross, financier and current chairman of plastics distribution firm Nexeo Solutions, as the new Commerce Secretary.

During a Jan. 11 panel discussion on manufacturing policy sponsored by Frost & Sullivan's Manufacturing Leadership Council, executives including Jerry Jasinowski, former president of the National Association of Manufacturers, said spending on technology and workforce development could encourage industrial growth that is already underway.

John Bernaden, co-founder of the Smart Leadership Manufacturing Coalition and former executive at Rockwell Automation, advocated creating low-interest loan financing to help small and mid-sized companies invest in “smart manufacturing” technologies.

From a policy perspective, the panelists generally urged the Trump administration to continue funding a series of manufacturing research institutes launched by the Obama government.

And several panelists argued that the Trump government is not likely to broadly apply tariffs on imports, but instead will use them as leverage in negotiations.

Ross and another Trump appointee, economist Peter Navarro, wrote a policy paper for Trump's campaign in September advocating a tougher line on trade, including reining in what they call mercantilist policies of China.

That paper said that half of the U.S. trade deficit comes from Canada, China, Germany, Japan, Mexico and South Korea, and said that improved trade balances are possible through “tough, smart negotiations.”

Jasinowski predicted there will be more focus on border taxes.

“The tax debate will move somewhat more toward border taxes, and that's going to cause that discussion to interface with the tariff discussion,” he said.

The report from the plastics association argued in part that the plastics sector “has been less affected by trends in automation and globalization than its counterparts” in manufacturing but also said that “the realities of mechanization and globalization have forever changed the way that America's Blue Collar Workers relate to the economy.

“It would be difficult, not to mention counterproductive, to turn back the clock on the American economy,” the report said, advocating more investment in education and industries that are still in demand, like plastics.

“Supporting innovation and growth in plastics should be a key part of any effort, locally or nationally, to find good work for the people and communities left behind by economic and operational trends well beyond their, or anyone else's, control,” the report said.

Carteaux told the webinar that business groups in Washington expect a return to the 1980s in relations between government and business.

“I've talked to a number of people since the election and they feel like we're going to get back into the 1980s when it comes to how things are governed from a business perspective in Washington D.C. over the next couple of years,” Carteaux said.

Plastics News Editor Don Loepp contributed to this report.