With tariffs back in the spotlight, what’s their real impact on trade, business, and jobs? Are they a necessary tool for protecting American industry, or do they do more harm than good?
This week, host Matt Kirchner sits down with John Murphy, Senior Vice President, Head of International for the U.S. Chamber of Commerce, to break down the complex world of tariffs and trade policy. With decades of experience in global trade, John sheds light on the history, purpose, and unintended consequences of tariffs.
From manufacturing to agriculture, tariffs have ripple effects across industries, supply chains, and even the workforce. Who really pays the price when tariffs are imposed? How do they shape innovation and investment in the U.S.? And with shifting political winds in early 2025, is the U.S. moving toward a more protectionist future?
This conversation tackles these pressing questions while exploring what business leaders, policymakers, and even students should consider as they navigate the evolving trade landscape.
Listen to learn:
- How tariffs impact American manufacturing and the six million jobs tied to exports
- The surprising truth about who actually pays tariffs—and how they drive up costs
- When tariffs become a tool for political leverage rather than economic policy
- Why protectionism can stifle innovation instead of promoting domestic industries
- What today’s trade policies mean for the next generation of skilled workers
Resources in this Episode:
Learn more about the U.S. Chamber of Commerce: www.uschamber.com
Other resources mentioned in this episode:
- From The Wall Street Journal: "The New Plan for Western Companies Is ABC: ‘Anything But China’"
- Learn more about the National Association of Manufacturers (NAM)
- U.S.-Mexico-Canada Agreement (USMCA)
- University of Michigan Consumer Sentiment Index
We want to hear from you! Send us a text.
Instagram - Facebook - YouTube - TikTok - Twitter - LinkedIn
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Matt Kirchner (00:00):
Matt, welcome into The TechEd Podcast. It is
(00:10):
your host. Matt Kirk, nurse, somuch talk these days about
tariffs, about trade policy,about where the US stands in the
global economy. We wanted totalk about that, and even more
specific about the impact thatis going to have, or could have,
all of these policies on thingslike careers and technical
education and what our studentsshould be learning, and so on.
(00:32):
So if you are in the world ofTechEd and stem and you're
hearing about all these tradepolicy questions and topics,
this will be the episode foryou. If you're wondering how
that is going to affect ourspace, we could think of nobody
more appropriate to talk aboutthis topic than the guests that
we have joining us today. Heleads the US chambers advocacy
(00:52):
on international trade andinvestment policy. His name is
John Murphy. He is the seniorvice president, Head of
International for the US Chamberof Commerce. John, so awesome to
have you in
John Murphy (01:04):
the studio. Matt.
I'm really excited, lookingforward to
Matt Kirchner (01:06):
it. So let me tell you this. For starters, I
grew up as kind of in the theReagan economy, big believer in
free trade. The whole idea inthe econ classes as I was taking
going through my educationpathway was that, you know, the
more hands off, the better. Themore free market, the better. So
let's just start out with this.
In this, in this era where we'retalking so much about tariffs,
about protectionism here in theUnited States, are tariffs Good?
(01:28):
Are they bad? Or does it depend?
John Murphy (01:32):
I suppose it depends. It's good to take a
step back and just reflect onhow important trade is to our
economy. There's 40 millionAmerican jobs that depend on
trade, and they're all aroundus. And many of those people
don't even necessarily think ofthat. Their job depends on trade
to the degree that it does. Yousee it in the manufacturing
sector very heavily. About halfof everything that American
(01:53):
factories make is for export.
Wow. You know, there's about 13million Americans employed in
manufacturing. So that means,you know, half of those, that's
what is that? Six and a halfmillion Sure, they get up every
day and they make stuff that'sfor foreign consumption, and you
don't see exports. So maybethat's part of why that is
agriculture. One in every fouracres on American Farms is
planted for export. And you canjust go through sector by
(02:15):
sector, it's it's reallyfascinating to hear from
companies, as I do every dayabout what trade means to them.
And so when you bring along atariff, you may be inadvertently
running the risk of cuttingthose those lines of
communication, those salesrelationships, and losing
foreign customers. It doesn'tmean that all tariffs are bad.
There are trade remedies, whichare tariffs imposed when a good
(02:39):
that's coming into the UnitedStates is deemed to be
subsidized. It's not fair trade.
Maybe they're dumping, whichmeans selling below cost to
drive you out of business. Sothose kinds of tariffs, they're
they've been around forever, andyou know, they certainly have a
role, but you got to stop andthink about the tariffs before
you slap them on.
Matt Kirchner (02:58):
So, you know, it's fascinating. I worked in
manufacturing for 25 years, ledmanufacturing companies still
have quite a few interests inthe world of manufacturing. I
didn't appreciate that half ofwhat's manufactured here in the
United States is manufacturedfor export. We hear about trade
imbalance. We hear about thetrade deficit. I guess you're
maybe led to, if you're notpaying close enough attention,
as apparently I wasn't, you'renot led to the understanding of
(03:22):
how important it is that we'remanufacturing products here,
that we're raising crops here,growing things here. I mean, I
had no idea for you to thinkabout a section of land which
would be 640, acres, and aquarter section of that, on
average, is earmarked forforeign commerce and is being
sent to outside of the country.
I mean, those observations arereally, really helpful to
understand the importance oftrade, the importance of all
(03:43):
those people, the six and a halfmillion people, as you suggest,
that are working inmanufacturing, in roles that are
creating products for foreignmarkets. So thank you for kind
of laying that down from aphilosophical standpoint and the
economics of it. What are yourthoughts on, just from a free
trade standpoint? Like, youknow, I just remember going
through my economics courses inin college, right? And the whole
(04:03):
idea was, free market economy.
Good protection isn't bad. Thetariffs are going to do nothing
but raise prices domestically.
Maybe we'll get into a littlebit about the your impact on on
innovation and so on. But talk alittle bit about, for those free
traders in the audience, howshould they be thinking about
the role of tariffs?
John Murphy (04:22):
Yeah, no, that's a great way to start. Think back
to Adam Smith and exactly theinvisible hand. Yep, trade. You
know, so much of human progresscomes from trade in the form of
it can be domestic trade too.
It's all specialization andexchange. Those two words are
just so powerful to describe thecourse of human progress and
people rising up out of poverty.
(04:43):
The poorest people in the worldtoday are subsistence farmers in
places like Central America orsome parts of Africa, maybe
India. And think about what itis to be a subsistence farmer.
You're living off of everythingthat only what you produce. Your
Matt Kirchner (04:58):
purpose in being in agriculture is to. Produce
enough food for your family tosurvive, is that what we're
getting exactly
John Murphy (05:03):
so you are entirely autonomous, and that's how
humanity was long ago. And then,you know, people lived in
villages, and a guy specializedin being the blacksmith, and
then you had other crafts andthe cart maker. And over time,
people became more and morespecialized, and would exchange
what they produced more andmore. And you think about our
(05:24):
economy today, where there'smaybe a factory down the road
making semiconductors, right?
These incredibly intricate, hightech things. The person working
there has one job makingsemiconductors. They don't make
anything else in their lives.
They're not, you know, raisingchickens or, you know that to
put eggs on the table, maybethey are, but that would be like
an exceptional element you'recomplimenting, right? So
(05:48):
specialization and exchange andhere in the United States, our
50 states, one of the tremendousadvantages we have is that, from
the beginning, we're a big freetrade zone. There's no trade
barriers, really, between the 50states some other parts of the
world, like in Canada, there aresome barriers between the
provinces, and that includestheir progress. Yeah, they're
actually trying to address that.
But that free trade within theUnited States has been just a
(06:10):
huge boon. But it all goes back,as you say, philosophically
thinking about it, tospecialization and exchange,
absolutely
Matt Kirchner (06:18):
and that, I mean, I can tell you again, as
somebody who worked inmanufacturing, all those all
those years, there weren't toomany employees that were doing
anything other than working inthat manufacturing plant,
earning a wage. And then thiswhole idea of specialization,
whether they were spending thatmoney on food, they were
spending it on a vehicle, theywere spending it on
entertainment, whatever thatwas, it really requires somebody
else to be a specialist in inthat particular area of
(06:39):
commerce, and that's what reallymakes and drives our economy,
you know, you think about Johnand you mentioned a little bit
earlier, in the case of acountry that is heavily
subsidizing an industry withwith government money or
monetary policy, or what haveyou, and then sending products
into a foreign economy, thosehighly subsidized products
(07:00):
selling, you know, at or belowcost in some cases, and trying
to crush domestic competition inthe short term to maybe create
leverage in the long term.
Certainly in those cases, werecognize, you know, the impact
and the importance of havingsome tariff policy that can
prevent those types ofbehaviors. You know, we hear
more and more in the currentadministration about using
tariffs or the threat of tariffsto drive political behavior. So
(07:24):
talk about that a little bit.
It's one thing to say, Okay,we're trying to maybe engineer
our economy a little bit, or tocreate or to discourage an
unfair advantage that maybe aforeign manufacturer, for
example, has. But what about onthe political side of things, to
influence political behavior. Isthat good? Is that bad? What are
your thoughts there? Yeah,
John Murphy (07:45):
so I do think there's a difference. As you
mentioned, there trade withChina is a big topic these days,
and of course, there's a growingrecognition around the world
that the Chinese economy,they're hefty subsidies. We hear
the term over capacity a lotbecause of Chinese industrial
policies, they have developed anovergrown manufacturing sector
(08:05):
that now produces about 30% ofthe world's manufactured goods,
and they only consume somethinglike 13% so that imbalance means
that they're going to try toexport their way out of their
economic problems, which aresubstantial. They have declining
demographic growth. They've hada big property bubble. Their
economy has slowed a lot, butthey think they can export their
(08:26):
way out of this problem. Sothat's a problem for the rest of
the world, sure. So that's onething I think is really quite
different when you look at NorthAmerica here. So Canada and
Mexico are our two largesttrading partners, right? And for
for many years, with Canada.
Going back to 1965 there was aUS Canada auto pact. We have
eliminated trade barriers, andincreasingly, we build things
(08:47):
together, right? This is aphrase you hear all the time
about us. We North Americans,and for instance, in the auto
sector, one of the largest partsof the manufacturing economy,
it's common for goods to crossthe border, 678, times in the
process of making a car.
Matt Kirchner (09:04):
I was just in Detroit yesterday having that
conversation, right? So we wereworking on a project with a
bunch of the automakers there,and exactly that conversation
that it's like, look, here weare in Detroit. You literally,
we were in the conference roomof the Detroit Regional Chamber
of Commerce, and you can seeCanada from the windows that
we're looking out of. And that'sexactly what they said. People
have no idea how many times, youknow, parts and components and
(09:26):
assemblies will go back andforth between the two countries.
John Murphy (09:29):
It's a very real thing. And because of that
relationship, because we'remaking cars together, if you
happen to be buying a car that'shas its final point of assembly
in Canada, you know, over halfthe content might be made in the
US and similar for Mexico, sure.
So what happens if you comealong with a tariff imposed for
whatever reason, you'reintroducing all kinds of
(09:49):
problems for American workers?
And one of my colleagues wasjust telling me about his visit
to a very large auto partsmanufacturing facility. And.
Hour to north of Detroit, andthe management there was saying
that if these tariffs comealong, we'll probably shut down
within days. This is a US plan,yes. Okay, yeah. So tariffs are
(10:10):
taxes. They're paid byAmericans. They are literally
paid by the importer. So it hasto be an American enterprise,
right? Substantively, we've seenthe tariffs in recent years
going back to 2018 they would100% of the costs were passed on
to American consumers andbusinesses. That's a problem.
Sure, at a time when we'retrying to get out from under the
(10:31):
inflation of recent years, thecost of living crisis, which is
real very much still with us,that's a problem. But for
manufacturing, it's even morethan that, that there are some
sectors that where we're just sointegrated with our our key
trading partners, like Canadaand Mexico, that tariffs are
really going to scramble things.
Autos is one. Medical devices,you know, another sector where
(10:53):
you might be importing a productthat's coming in from Mexico,
but well over half the contentis American. Another one is
power generation equipment,which is really very important
right now, with demand forelectricity rising with data
centers right electricity isquite a lot more expensive than
it was 10 years ago, all overthe US, and there's a real
shortage of transformers and theother equipment that goes to
(11:18):
strengthening the grid, buildingout the grid so that we can
structure you Yeah, that's one.
That is another. Tariffs wouldvery much scramble that, because
we do need those importedinputs.
Matt Kirchner (11:31):
Agree with everything you said, and really
fascinating to think about. Whopays the tariff you know that it
is actually a tax on on domesticcompanies and eventually being
passed on to consumers, right inone form or another, maybe, if
not all of it, at least a goodportion of it. What about the
impact on innovation? You know,you hear the argument about,
look, if we're creating anartificial competitive advantage
(11:51):
for domestic manufacturers,suppliers, innovators, because
they can now, if a foreigncompetitors, products are more
expensive in the in the US now,we've got a cost advantage, or a
pricing advantage, someleveraging there. Does that
curtail innovation at all? Imean, does that have an impact
on on the incentive for acompany to innovate, to remain
(12:12):
competitive with foreigncompanies and products that may
be either driving cost out ofthe product or adding features
and benefits to their productsthat we don't necessarily have
that need to here because wehave this cost or this pricing
leverage or benefit in themarketplace. I
John Murphy (12:27):
think it has a direct impact on innovation. One
interesting historical examplemight be Brazil's so called
informatics policy. Back in the1980s Brazil looked at the world
and said, We really need todevelop our own industry to make
things like consumer electronicsand early computers and so on.
And so they set up a big tariffwall around the country. They
(12:49):
provided some subsidies, andthey built out the beginnings of
an industry. And sure enough,within a time, they were able to
make some of these thingsthemselves. But the thing is,
they were very expensive andthey were very backward. They
were not globally competitive.
You know, when you're hidingbehind a tariff wall and not
competing out in the globalmarket, odds are you're going to
be falling behind pretty quicklytrade and the higher margins
(13:09):
that you get by exporting andgrowing markets that provide
some of the seed corn for yourresearch and development. If
you're not able to expand thatway, then it's it's going to
have an impact on yourinnovation in the long run. So
Matt Kirchner (13:25):
all these potential negative impacts of of
tariffs, and you know, I didn'tyet, we saw, most recently, the
the threat of tariffs, both onon Canada and Mexico, changed
some behavior, or at least itchanged some some dialog. And
you know, in this case, aroundthe concerns related to illegal
immigration, we did get somereaction, and we will see six
months a year from now how muchstaying power that has. What are
(13:47):
your thoughts around that partof it, that when we're literally
like trying to he's for as longas we're talking to, in this
case, about, or have been about,Canada and Mexico changing their
behavior, from a policystandpoint, using the threat of
tariffs, is that worthwhile? Notworthwhile? Scary. Okay, what
are your thoughts there?
John Murphy (14:06):
Well, these are important problems. You know,
the fentanyl drug traffickingcrisis is very real. I think we
all know people in you know,close or friends or relations
who've been impacted by thiscrisis, and similarly, illegal
immigration, and that's aserious challenge. Nobody wants
(14:27):
to support an open border thatdis control and people just
coming across without any senseof order. It's good to have a
focus on these problems. I thinkwhat we see coming out of these
exchanges with Canada and Mexicois a very sincere desire to work
on these on these issues, andsure, both of them came forward
with plans that they're puttingin force. They're substantial.
(14:50):
And particularly with regard toMexico, a lot of the immigration
into the United States for for along time, is not Mexicans. It's
people coming from other partsof the world. But. Afghans,
Chinese, it's a regular UnitedNations, but the Mexicans have
really stepped up in a big way,and they're cooperating with the
United States to lend greatercontrol there. So did tariffs
(15:13):
help that happen? I'm not sosure. I believe that both Canada
and Mexico have wanted to workwith the United States on these
problems, and if you look at theplans that they've rolled out,
they're sincere and serious,significant investments. So I
think it's positive that we'readdressing the problem and
certainly imposing tariffs atthis point when so much depends
(15:34):
on it for our economy, forAmerican jobs. It's really
important to see it through thatlens understood.
Matt Kirchner (15:40):
And so, you know, let's be a little bit of a
prognosticator, if you would. Imean, we nobody knows for sure
how much of this is, you know,saber rattling and trying to,
trying to maybe modulatebehaviors. I mean, nobody knows
how much of it is, maybe tryingto get and maybe that's another
question to explore, is tryingto get foreign governments to
change their tariff policies asit relates to exports from the
(16:02):
United States. Nobody knows howmuch of it is a true desire to
create more of a protectionisteconomy here in the United
States. When I say, nobodyknows, and maybe, maybe some
people do, but very few of us,if we're going to turn the clock
forward a year, John, how muchof this do you think actually
becomes part of US policy from atariff standpoint, and how much
of it kind of works its waythrough the rhetoric and never
(16:23):
really sees the light of day.
John Murphy (16:25):
That's a really good question. There's been a
lot of tariffs that the Trumpadministration has been talking
about. For instance, they talkedabout bringing back and full
force the steel and aluminumtariffs. That does appear to be
very sincere, and I believe it'sMarch 14, they're supposed to
come into force. That's going tobe, you know, heavy new costs
for the manufacturing sector.
Sure, I think that's real. Okay,it's going to have an effect.
(16:48):
Because, you know, look, tariffspring, concentrated benefits
and diffuse costs. The costs area lot larger than the benefits.
But if you're a steelmanufacturer, that's good for
you. What we saw with the steeltariffs when they were first
imposed in 2018 was the industryadded about 2000 jobs, but the
downstream industries, they lostabout 75,000 jobs. So if you're
(17:09):
a steel consuming industry, it'squite a burden to have to put up
with these much higher costs. SoI think that that's coming. I do
think that the administrationhas been clear, saying that they
don't want to have any carveouts, no exclusions for
individual companies, noexceptions for individual
countries, some of the otherones, it's less clear. I am
(17:31):
hopeful that we will not see thetariffs imposed on Canada and
Mexico, and in the long run, youknow, as a candidate. Now,
President Trump talked a lotabout imposing hefty tariffs on
goods from China. Right now, theadministration seems to be more
in deal making mode with theChinese, sure, so we'll see what
(17:51):
happens there. But I do thinkthat there is more of a
bipartisan consensus inWashington about tariffs on
goods from China, if they're nothappening right now, I don't
think that the tide is genuinelyturned against them in the long
run. Interesting. Well,
Matt Kirchner (18:06):
it'll be interesting to watch it roll out
over the course of the next 12months and beyond, and maybe
we'll have you back in a year,and we can look back and see
where we're where we're sitting.
You know, another topic on theon the tariff front, we've
talked about tariffs on onproducts coming into the United
States, but you know, a lot ofthe talk these days is about,
how do we normalize or maybecreate a level playing field in
the other direction, right? Sothere's a lot of countries that
(18:27):
are imposing significant tariffson our products as they leave
our shores and enter theirborders. What are your thoughts
on that? And, you know, just ingeneral, I mean some
observations on what you've seenglobally, and then whether our
tariff policy should be used totry to offset those, you know,
those tariffs that othercountries are charging on the
products that we're exporting tothem.
John Murphy (18:51):
Yeah, that's a great question. First of all, I
would say that we have ourcollection of free trade
agreements with 20 countriesaround the world, and if you
look at those, what they give usis that perfect reciprocity of
zero tariffs on almost allproducts, you know, more than
99.5% of products. And so thatincludes Canada and Mexico under
the US Mexico Canada agreement,usmca, but it includes other
(19:15):
countries such as Chile,Australia, Singapore, Morocco,
and they're hugely beneficial. Anumber of these are pretty small
economies, but by opening upthose markets and sweeping away
their tariffs, sure what you getis real market growth. And so
those 20 countries together,they buy almost half of all our
exports worldwide. Wow. Sogetting more agreements like
(19:38):
that is the kind of reciprocitythat I think the business
community can really rallybehind. So beyond that, you look
at other countries, like, say,Europe, European Union, or
Japan, their tariffs areactually generally pretty low
both of those, but the EU andJapan, their average tariffs are
actually lower than those of theUnited States. States, there are
(20:01):
exceptions. I think PresidentTrump has talked about how the
EU has a 10% tariff on autos,the US has a 2.5% tariff on
autos. So, you know, let's,let's wrestle with that. Let's
see what we can do with that.
And of course, there are alwaysother non tariff barriers, which
they can take all kinds offorms. Sometimes countries put
them together in a way thatappears to be singling out
(20:22):
American industries, like anumber of countries have imposed
these digital services taxes,which seem to target American
technology companies. So thereare very real trade barriers all
around the world, and goingafter them is worth doing, and
something the business communitysupports, but we need to do it
in a proportional way. I believethat through negotiations, you
(20:43):
can actually accomplish a lot.
Matt Kirchner (20:45):
So is it fair for me, as I'm listening to you talk
about the free trade agreements,policies like NAFTA have come
under fire over the course ofthe last several years, maybe
even longer than that, in termsof maybe a perception that they
created an environment whereAmerican manufacturing jobs were
being exported to othercountries. You know what I'm
(21:07):
hearing you say is, when we havethis balanced policy in fair
trade between countries, that'sa positive, I'm assuming, but I
want to hear your thoughts onit. Have policies like NAFTA,
agreements like NAFTA been a netpositive for manufacturing
employment. For example, in theUnited States, American
John Murphy (21:25):
manufacturers have very much benefited from our
trade agreements around theworld. And you see this in the
trade flows. We actually havemanufactured goods trade balance
more or less when you look atour trade agreement partners. So
by removing the tariff barriersthat other countries have, and
the non tariff barriers that aresometimes sneaky and not always
(21:45):
that easy to pin down, but ourtrade negotiators do a good job.
You really can turn smalleconomies into big markets. So
for the manufacturing sector, Ithink that's a real priority.
And our friends at the NationalAssociation of Manufacturers
have been very supportive ofthese trade agreements as well.
What we're not going to get,even if we have, if we built the
highest tariff wall in theworld, it's it's worth thinking
(22:08):
about, what are those jobs thatwe lost, that you are going to
get back? About half of all themanufacturing jobs lost on net
since 1979 which was the yearwhen we had the highest number
of manufacturing jobs in theUnited States 19 million. About
half of all the net jobs we lostare actually in the apparel
sector. You know, the apparelsector is not really the kind of
(22:29):
place that you would want, youknow, your child to grow up and
go work in. Because if you lookat the wages they paid in, say,
in the Carolinas or Georgia backin the 1970s you know, they were
seven or $8 in our currentdollars. Wow, seven $8
Matt Kirchner (22:44):
adjusted for inflation zone, right? Yeah,
yeah. So it's those. Those
John Murphy (22:48):
were bad jobs. And there's countries with much
lower costs and lower wages thatare happy to take those jobs,
and today we import that stuffand trying to bring that back.
Those are manufacturing jobs.
Those are manufacturing jobs welost. We should not be trying to
get those back. We should bethinking about the jobs of the
future. We should be thinkingabout the innovative economy
(23:09):
technology. You know, there'sbeen a big focus on things like
semiconductor manufacturing inrecent years. We need to rebuild
our defense base as well.
There's a lot of technologybehind that that takes a lot of
skilled labor, and that's whyyour your podcast is so
important.
Matt Kirchner (23:26):
It's a race on debt right here at The TechEd
Podcast, absolutely our reasonfor existing. So on that topic
of jobs, and the kind of jobs weshould be promoting here in the
United States, you know, touchon for a moment and a little bit
deeper. So we think aboutsemiconductors. We think about
technology now, of course, youknow, we'd already mentioned
data centers as it relates toenergy policy, but certainly
(23:47):
that being driven by artificialintelligence, machine learning
and advancements, there arethere types of jobs that we
should be focusing on here inthe United States in terms of
growth as maybe that's a policyquestion. Maybe it's just more
of a looking into the future,and what are the jobs of the
future? You know,
John Murphy (24:03):
you started off with a question about the
philosophy of free enterpriseand free markets. You know, I
think it's you really can't planthat too much, right? You want
to create the best possibleenvironment for businesses to
operate in an environment whereexecutives can plan for the long
term so that they can build,invest, hire, innovate, do that
(24:23):
R and D that calls for taxesthat aren't too onerous, a
regulatory environment that'spredictable, you know, not too
burdensome, right? And so on. Ithink that that's really how you
succeed in doing that. I dothink a lot about those jobs,
though, like the apparel jobs,or going back to the auto
sector, there's a lot ofdifferent parts that go into a
(24:43):
car, including wire harnesses. Idon't know if everybody's heard
of a wire harness, I certainlyhave. Yeah, it's a pretty simple
product. And, you know, they'remade in countries. They're made
in, you know, Mexico, Honduras,they're made in environments
with pretty low skilled labor.
Is low wage work. Sure, weshouldn't. Be trying to make
those jobs come back to theUnited States. We should
recognize that we have aprivileged position in this
(25:05):
industrial ecosystem. Ourworkers get to do the high value
added, high wage work, and sotrade helps us to do that. It's
also, I'm not picking on thepoor Hondurans, because it's
where you start in the globaleconomy, and you work your way
up, just like, you know,Americans did at a certain
point. Sure, we should be cleareyed about that not all jobs in
the manufacturing sector are thesame, and we should always be
(25:29):
trying to have an environmentthat favors the creation of
those high wage, high skilljobs. You know,
Matt Kirchner (25:36):
it's interesting that you bring up that that
whole predictable businessenvironment, and I used to argue
in this, maybe not quite as longterm as you're focusing on, but
when I was in manufacturing, andwe used to consume a tremendous
amount of natural gas, and weused to hedge our natural gas,
you know, years in advance. Inother words, try to create a
stable price for the company andand people would always be
(25:57):
asking, why are you trying to,you know, game the natural gas
market. What do we know aboutthe futures market? So that's
not what we're trying to do. Wewant to know what we're paying
for that particular part of ourproduct, so that or producing
our product, so that we take theguesswork and the variability
out of the business model, andthe more predictable our
business model can be withthings that maybe we can't
control, the more we can focuson the things that we can
(26:19):
control. And it sounds to me, amI getting that right? That
you're kind of thinking about itthe same way that the more you
know, more predictable our tradepolicy can be, the more our
executives and our companies canfocus on, okay, I know what that
environment with some degree ofcertainty is going to look like
now I can focus on those partsthat I can control. Is that kind
of what you're after there?
John Murphy (26:39):
That's hugely important. And it comes back to
the tariff question. Right forexecutives to be able to plan
they want to have thatpredictability, and I think
there's plenty of evidence thattariff threats, even if they're
not executed, can impose a realcost on the economy. We saw this
back in 2018 2019 when we sawtariffs imposed on a variety of
products coming into the UnitedStates. What you see is business
(27:03):
confidence waiver. I think theUniversity of Michigan has this
index everybody refers to aboutbusiness confidence. And the
next thing you see is businessinvestment. And we saw in 2018
the tariffs cause businessinvestment to go down. You're
going to sit on the sidelines. Ithink there's a danger right
now, if you look at the economy,is now really the time when you
(27:24):
would build a new plant orexpand your current operations.
If you're dependent to somedegree on ability to sell your
goods in Canada and Mexico andso on, or if you're dependent to
some degree on some importedcomponents from Canada or
Mexico, are you going tosuddenly be paying a lot more
for them? Is that going to messup your plans? So you can see
(27:44):
the real nexus to that questionof uncertainty and confidence
going forward, and that'ssomething that we we really need
to value much more highly. I
Matt Kirchner (27:53):
think. Got it. So let me, let me ask you this, and
maybe a little bit of apolitical question, but are you
as fascinated? Or is maybefascinated is the right word.
Maybe it isn't. But you look at,I came of age, as I mentioned in
the intro, during the Reaganera, that's where I started to
get at least kind of followingpolitics and policy a little
bit. So back in the, you know,in the 1980s and back in those
(28:15):
days, I mean, it was theconservative or Republican, if
you will. Viewpoint was tariffsare bad, free markets and
competition are good, and it wasmore the Democratic side of the
aisle, maybe fueled a little bitby strong union influence as
well that well, we need moreprotectionism where, you know,
if it's whether it's a Japanesecar that's coming across the
(28:36):
border, we need to create someprotectionism for our domestic
manufacturers and create an areawhere they're not as influenced
by foreign competitionadversely. And now, I mean, it's
like the opposite, right? Imean, you know, you look at the
and I don't want to get overlypolitical, but you turn on
MSNBC, and now tariffs are badand protectionism is bad, and
you're watching Fox News, andit's like, well, you know, we
(28:58):
need to punish these othercountries that are maybe not
playing as well with the US aswe would like them. Are you as
fascinated as I am by thatjuxtaposition in the political
environment? It
John Murphy (29:08):
is interesting, isn't it? You know, I recently
learned a fancy word from anexpert in public opinion
polling. The word isthermostatic. It means that, I
suppose, another way to say itis that people are ornery and
they don't like being told whatto think. They may say in an
election that they want onething, but once they see a
certain policy imposed, theystart to sour on it. And I think
(29:30):
it happens time and again, sure,but, you know, looking at public
opinion on trade, I think it'sespecially volatile, because the
reality is, people don't thinkabout trade very much, right?
There is a lot of evidence. Youknow, I've seen opinion polls
for years, they always find thatof all the priorities that
people rank, usually somethinglike the cost of living or the
economy or jobs or there's arecession and there's a high
(29:52):
unemployment, those are thethings that are at the top. And
there's usually maybe 1% of thepublic that will really say
anything important about trade.
Trade, and I think that lendsthe volatility and people also
will follow. If you are aDemocrat, you're going to adopt
the policy positions on theselow importance issues of your
party leader, or, similarly, fora Republican, right? Sure. So I
(30:14):
think that's a lot of whathappens here. But as a guy who's
worked on trade for 25 years.
There may have been a time whenI might have said to myself,
gosh, I wish people paid moreattention to trade, but here we
are now, right? Yeah,
Matt Kirchner (30:27):
yep, exactly. You know, it's interesting. One of
the stories I love to tell isthis is back when George W Bush
was the president, and he hadproposed moving Daylight Savings
Time by three weeks. And I havetons of friends all over the
political spectrum. And all ofmy conservative friends are
like, Yeah, this is a reallygood idea. I think the
(30:48):
President's on to something. Andall my liberal friends were
like, you know, this is theworst thing in the world. And
you know, then it's not sun'snot going to come up until
whatever, and kids are going toget run over by their school
busses waiting for them in themorning and so on. And I'm like,
you know, there's a lot ofthings that should come down to
our political philosophy, butwhen we turn our clocks forward
and back, doesn't seem like itshould be one of them. So I
think that was just an exampleof what you said is that
(31:09):
sometimes people will follow theherd of whatever you know,
whatever political side theythey identify with, at that
particular point in time,regardless of whether you know,
people are sitting here havingin depth conversations about
tariffs and political philosophyand so on. Yeah,
John Murphy (31:23):
you know, I will you do make me think of one
thing, people are paying alittle bit more attention today
to trade. And I was just lookingat some of the recent polling.
There's a CBS poll which, amongother things, actually gave the
president pretty high marks, butit said that the thing that
people wanted the most, thatthey were not seeing was more
attention being paid to pricesthat what are we going to do to
bring prices down? Right? Andthe administration is not doing
(31:45):
enough on that. So this is byfar the biggest, the top
finding, and a pretty importantone, right? Because the
election, we just had inflationand the cost of living was
arguably the number one issuefor sure. So not a surprise that
people want the White House tofocus on this, and at the very
bottom of the list of thingsthat wanted people want to see
was tariffs. And people dounderstand that tariffs are
(32:09):
taxes and that they're going tosend costs up, and that's why,
that's also, I think, why you'reseeing inflation expectations in
various surveys are going up,right? You know, it's been
painful trying to get them to godown, and we really don't want
to lose that progress,absolutely.
Matt Kirchner (32:24):
And I think the President actually even
acknowledged that in the wake ofsome of the tariffs that are
being proposed that that couldhave an adverse effect on
pricing. So, and I think just,you know, the theory of
economics is tell, tells youthat that's what's going to
happen if we have significanttariffs, we will hard to both,
you know, raise a tax onsomething as it's coming into
the country, and drive pricesdown at the same time. So I
think not an economics expert,but I know it well enough to
(32:46):
know that there's a potentialissue there is, if I'm a
business leader, John, and I'mtrying to figure out you touched
on before. Hey, you know we havethis uncertainty that may have
an adverse impact on capitalinvestment. Is one example that
you raise. How do I need to bethinking about current policy
and kind of the attitudes towardtariffs and trade as I'm
(33:07):
planning for the next 12 to 36months in my business. Well,
John Murphy (33:11):
I think it's a bit of what we've seen in recent
years, including with the COVIDpandemic. People need to think
about their supply chains andhow you're going to spread your
risk, how you're going tomitigate your risk, and one of
the ways you do that is just bynot putting all your eggs in one
basket, right? Do not dependentirely on China to source all
of you know some neededcomponent. Try and have a I've
(33:33):
seen this in the press the Chinaplus one strategy, right? I've
heard it from businessexecutives
Matt Kirchner (33:38):
exactly, mitigate some of that risk, Yep, yeah.
And I
John Murphy (33:40):
actually, there was actually a Wall Street Journal
article quite recently thattalked about the ABC strategy,
which goes a step furtheranywhere by China, right? So,
and you know, a lot of companieshave done that kind of thing.
They're sourcing more fromSoutheast Asia or Mexico.
They've moved some operationsthere. Obviously, they want to
do as much as possible in theUS, but that tends to be the
(34:04):
high skill, high wage parts ofit, and it's in your production
processes you often want tocompliment that with some
components that come fromsomewhere else. And businesses
would really like to have thecertainty that that direction
that they've been getting foryears, that don't depend too
much on China, is still thedirection, right? You know, if
you started to expand youroperations in Mexico instead,
(34:26):
which is good for the UnitedStates, because stuff that's
made in Mexico has a lot more UScontent in it. Sure. Can we not
tariff that, right? You know,
Unknown (34:34):
exactly I get it. So, yeah,
Matt Kirchner (34:36):
interesting. So, so taking it to the other end of
the spectrum of manufacturing,one of the things I insisted
with my kids when they weregoing through whatever came
after high school was we'll helpyou with that. But I want you to
work in manufacturing. I wantyou to spend some time around
production. I want you to knowthe amazing people that work
creating the plants andfactories across the United
States of America and and knowhow hard they work, how dead.
(35:00):
Dedicated they are to themanufacturing sector, to their
work, that these are justgenuinely, genuinely amazing,
good, productive people. And I'mproud to say that they both had
that experience as they were,you know, working their way
through what came after highschool. Just tremendous respect
that we have here at the podcastfor those people that are adding
credible value to our economy,those 13 million people that you
(35:20):
mentioned, as we were gettingstarted here,
John Murphy (35:22):
it could be my son soon. He's graduating with a
degree in mechanicalengineering. Really, I think
this is where he's looking. So,you know, we're all in on it. So
sorry to ask where he went toschool. Case, Western, yeah, in
Cleveland,
Matt Kirchner (35:32):
Ohio. Awesome.
Yeah. I just, I mean, it is, andto choose engineering as a
career that kudos to your son,because that's really, really,
Unknown (35:39):
my hope is born to it.
Yeah, exactly. It's a calling,and it
Matt Kirchner (35:43):
is and manufacturing, especially for
people who spent a lot of timein and around it, there is
nothing like getting to the endof the day and looking over your
shoulder and saying, I madethat, or standing at the end of
a semi truck that's leaving thedock and saying that I had a
part in building all thoseparts. And that's just, it's a
rewarding feeling ofaccomplishment that most people
(36:04):
don't ever get to, you know, getto experience. We've got 13
million people in the US, youknow, working in manufacturing.
That means we've got whateverthe number is, two, 90 million
or whatever that are that arenot more than that. So very few
people get that, that feeling ofaccomplishment. So, so awesome
that your son is taking hiscareer in that direction, with
regard to those people that aredoing that work, and the people
(36:25):
that your son will have anopportunity to work around. If
I'm the person, I'm a machineoperator, right? I'm a machine
tender in a manufacturing plant.
I'm an industrial maintenancetechnician making sure that all
this equipment continues workingand so on. What's your message
to them? I mean, what do theyneed to be do they need to be
considering trade policy? Whatshould they know about all these
things that we're talking abouthere? It's
John Murphy (36:45):
always good to be informed. Understand what's
going on at the US Chamber ofCommerce. We're doing more in
civics education. You know, it'swe think it's terrific when
people engage with and sharetheir views with their members
of Congress and other electedofficials. That's how it's
supposed to work, and it doesn'thave to be way again with your
member of Congress, like votefor this bill or don't vote for
(37:06):
that bill, just helping electedofficials to understand this
very complicated economy that wehave, sure it's not always very
easy to understand, and it's youand I have this privilege of
hearing so many interestingstories about The incredibly
innovative things that come intoour economy and how it all works
together. It's educating policymakers is important. Certainly,
Matt Kirchner (37:27):
educating policy makers is important. Informing
themselves is important, as youthink about ways that they can
do that, I'm an employee workingin a manufacturing plant. I'm
hearing this podcast. I'm like,You know what? I don't want to
run off and a degree in foreignpolicy or a degree in economics,
but I at least want to make surethat I'm informed enough to make
good decisions, and if I am, youknow, interacting with
(37:49):
legislators or with other publicpolicy makers, I want to be able
to have a coherent conversation.
Where can they go for thatinformation? Well,
John Murphy (37:56):
I always encourage people to get involved in their
local Chamber of Commerce.
You're visiting Milwaukee,because I'm coming to an event
with Wisconsin manufacturers andcommerce, a great State Chamber,
but municipal, Metro chambers,local chambers, just do a great
job, and they're always havingprograms where you can learn
more about these issues. And youknow, a lot of them will have
trade events throughout the yearas well, and on a variety of
(38:18):
other topics, workforcedevelopment, such a challenge in
this country we're, you know,we're blessed with low
unemployment right now, yeah,but it certainly makes it hard
to keep that talent pipelinefilled for sure, so many of
these public policy issues thatchambers get involved in awesome
Matt Kirchner (38:37):
two more questions for you as we close
out our time with you, John, thefirst One is, we all had our own
journey through education. I'vegot probably more opinions about
education and what we could bedoing differently than maybe
anybody else on the planet. Idon't know, but if you think
about the world of educationthese days, is there something
that you believe about eitheryour trip through education or
(38:57):
the state of education here inthe United States that would be
a little bit different thanmaybe the way others would look
at their education, the world ofeducation. Well, you
John Murphy (39:06):
know, I think about people in Washington, because
I've been living and working inWashington for, you know, 30
years, and there are a lot ofpeople who make a good living,
who are sort of journeymenwithout a whole lot of deep
expertise in anything. And, youknow, you can hop around from
job to job, but to me, it's thepeople who develop the deep
subject matter expertise, andthat's part of your college
(39:26):
education and but it's somethingthat you cultivate after that as
well. Sure, you got to do that,yeah, at the same time, you're
not just about that one thing. Ireally appreciate the colleagues
that I have who are able toapply their classical education
and invoke the Greeks orShakespeare or something, that
there's benefit to that roundededucation as well.
Matt Kirchner (39:46):
Awesome, yeah, I love that. And as somebody is a
product, actually, of a liberalliberal arts education. Studied
business, but at a liberal artsuniversity, I talk often about,
yeah, the hardcore learning, theat that time, the nuts and bolts
of public accounting and.
Counting and so on. Really,really important. But I learned
as much in courses like theologyand philosophy as I did, maybe
even more in terms ofcommunication and abstract
(40:06):
thinking than I did in some ofthose hardcore courses that were
really central to what I endedup doing initially in my career.
So super, super good advice. Andspeaking of advice, you know,
let's turn the clock back alittle bit. We haven't mentioned
this yet, although, as we werewarming up, we talked about you
growing up in or near FortCollins, Colorado. Let's you
know, you're a sophomore in highschool back then, 15 year old
(40:27):
young man, whole life ahead ofyou. If you could go back in
time and give that person onepiece of advice, John, what
would it be? So
John Murphy (40:37):
I was thinking about this a little bit. I think
I would counsel myself to, youknow, don't be afraid to hang
out with the weird people, youknow, because, again, I live and
work in Washington, a lot ofpeople are not that weird, but
you learn so much from thepeople who think different,
absolutely right? I think I'vebeen blessed in my life to not
just to be able to hang out withpeople who were who were
(40:58):
different, but they activelysought me out, and it did me a
lot of good. So, you know, when,when they come knocking, you
know, go out and experiencesomething completely novel with
the richness of humanity and allthe people who are not
necessarily the same as youabsolutely,
Matt Kirchner (41:12):
one of my really, really good friends actually
talks about, he, and he's a he'san artist, and very, a very
successful one. I taught art atthe Chicago Institute. Talks
about, he started his artclasses with his new students,
about, look, your whole lifeyou've been a weirdo, is what he
said. And I want you to knowthat you're now with a bunch of
weirdos, and it's okay to be aweirdo. And I just think about
(41:32):
I've made, actually, a similarcomment many, many times, is
that my most interestingrelationships, and I've gotten
an opportunity to meet lots ofpeople and build numbers of
great friendships. The mostinteresting ones are the ones
that think about the world justa little bit different than I
do. So I think that's really,really good advice. I think the
fact that you you said, youknow, when those people seek you
(41:54):
out, and in this case, you know,the weirdos at The TechEd
Podcast came knocking and youaccepted the invitation. Really
appreciate the fact that you didthat, John, that's great advice.
Awesome conversation here abouttrade policy, about tariffs,
about the impact on education,about how our young people
should be thinking about theircareers. Really, really glad
that you took some time for ushere on The TechEd Podcast. It's
been great. Thanks for havingme, and we'll have you back
(42:16):
again maybe a year or two fromnow, and we'll look back on
what's happened in the world oftariffs in the world of trade
policy and so on. It is going tobe an interesting ride here in
the United States of Americaover the course of the next
several months, and maybe evenover the course of the next four
years. But with any luck, ourmanufacturing sector and our
economy as a whole will bebetter for it. Looking forward
to that, looking forward toseeing everybody next week on
(42:39):
our next episode of The TechEdPodcast. In the meantime, be
sure and check out the shownotes. We will link up all of
the great content that we talkedabout here on this episode of
the podcast with our friend JohnMurphy. So check out the show
notes. Those will be at TechEdpodcast.com/murphy that is
TechEd podcast.com/m u, r, p, h,y. And also be sure and visit us
(43:02):
on social media. You'll find uson tick tock, on Instagram, on
Facebook, on LinkedIn, whereveryou are, we will be there as
well. Reach out and say hello.
Thanks again to John Murphy, theSenior Vice President, Head of
International for the US Chamberof Commerce, for joining us
here. We will see you next week.
Until then, I am your host. MattParker, you.
Matt, welcome into The TechEd Podcast. It is
(00:10):
your host. Matt Kirk, nurse, somuch talk these days about
tariffs, about trade policy,about where the US stands in the
global economy. We wanted totalk about that, and even more
specific about the impact thatis going to have, or could have,
all of these policies on thingslike careers and technical
education and what our studentsshould be learning, and so on.
(00:32):
So if you are in the world ofTechEd and stem and you're
hearing about all these tradepolicy questions and topics,
this will be the episode foryou. If you're wondering how
that is going to affect ourspace, we could think of nobody
more appropriate to talk aboutthis topic than the guests that
we have joining us today. Heleads the US chambers advocacy
(00:52):
on international trade andinvestment policy. His name is
John Murphy. He is the seniorvice president, Head of
International for the US Chamberof Commerce. John, so awesome to
have you in
John Murphy (01:04):
the studio. Matt.
I'm really excited, lookingforward to
Matt Kirchner (01:06):
it. So let me tell you this. For starters, I
grew up as kind of in the theReagan economy, big believer in
free trade. The whole idea inthe econ classes as I was taking
going through my educationpathway was that, you know, the
more hands off, the better. Themore free market, the better. So
let's just start out with this.
In this, in this era where we'retalking so much about tariffs,
about protectionism here in theUnited States, are tariffs Good?
(01:28):
Are they bad? Or does it depend?
John Murphy (01:32):
I suppose it depends. It's good to take a
step back and just reflect onhow important trade is to our
economy. There's 40 millionAmerican jobs that depend on
trade, and they're all aroundus. And many of those people
don't even necessarily think ofthat. Their job depends on trade
to the degree that it does. Yousee it in the manufacturing
sector very heavily. About halfof everything that American
(01:53):
factories make is for export.
Wow. You know, there's about 13million Americans employed in
manufacturing. So that means,you know, half of those, that's
what is that? Six and a halfmillion Sure, they get up every
day and they make stuff that'sfor foreign consumption, and you
don't see exports. So maybethat's part of why that is
agriculture. One in every fouracres on American Farms is
planted for export. And you canjust go through sector by
(02:15):
sector, it's it's reallyfascinating to hear from
companies, as I do every dayabout what trade means to them.
And so when you bring along atariff, you may be inadvertently
running the risk of cuttingthose those lines of
communication, those salesrelationships, and losing
foreign customers. It doesn'tmean that all tariffs are bad.
There are trade remedies, whichare tariffs imposed when a good
(02:39):
that's coming into the UnitedStates is deemed to be
subsidized. It's not fair trade.
Maybe they're dumping, whichmeans selling below cost to
drive you out of business. Sothose kinds of tariffs, they're
they've been around forever, andyou know, they certainly have a
role, but you got to stop andthink about the tariffs before
you slap them on.
Matt Kirchner (02:58):
So, you know, it's fascinating. I worked in
manufacturing for 25 years, ledmanufacturing companies still
have quite a few interests inthe world of manufacturing. I
didn't appreciate that half ofwhat's manufactured here in the
United States is manufacturedfor export. We hear about trade
imbalance. We hear about thetrade deficit. I guess you're
maybe led to, if you're notpaying close enough attention,
as apparently I wasn't, you'renot led to the understanding of
(03:22):
how important it is that we'remanufacturing products here,
that we're raising crops here,growing things here. I mean, I
had no idea for you to thinkabout a section of land which
would be 640, acres, and aquarter section of that, on
average, is earmarked forforeign commerce and is being
sent to outside of the country.
I mean, those observations arereally, really helpful to
understand the importance oftrade, the importance of all
(03:43):
those people, the six and a halfmillion people, as you suggest,
that are working inmanufacturing, in roles that are
creating products for foreignmarkets. So thank you for kind
of laying that down from aphilosophical standpoint and the
economics of it. What are yourthoughts on, just from a free
trade standpoint? Like, youknow, I just remember going
through my economics courses inin college, right? And the whole
(04:03):
idea was, free market economy.
Good protection isn't bad. Thetariffs are going to do nothing
but raise prices domestically.
Maybe we'll get into a littlebit about the your impact on on
innovation and so on. But talk alittle bit about, for those free
traders in the audience, howshould they be thinking about
the role of tariffs?
John Murphy (04:22):
Yeah, no, that's a great way to start. Think back
to Adam Smith and exactly theinvisible hand. Yep, trade. You
know, so much of human progresscomes from trade in the form of
it can be domestic trade too.
It's all specialization andexchange. Those two words are
just so powerful to describe thecourse of human progress and
people rising up out of poverty.
(04:43):
The poorest people in the worldtoday are subsistence farmers in
places like Central America orsome parts of Africa, maybe
India. And think about what itis to be a subsistence farmer.
You're living off of everythingthat only what you produce. Your
Matt Kirchner (04:58):
purpose in being in agriculture is to. Produce
enough food for your family tosurvive, is that what we're
getting exactly
John Murphy (05:03):
so you are entirely autonomous, and that's how
humanity was long ago. And then,you know, people lived in
villages, and a guy specializedin being the blacksmith, and
then you had other crafts andthe cart maker. And over time,
people became more and morespecialized, and would exchange
what they produced more andmore. And you think about our
(05:24):
economy today, where there'smaybe a factory down the road
making semiconductors, right?
These incredibly intricate, hightech things. The person working
there has one job makingsemiconductors. They don't make
anything else in their lives.
They're not, you know, raisingchickens or, you know that to
put eggs on the table, maybethey are, but that would be like
an exceptional element you'recomplimenting, right? So
(05:48):
specialization and exchange andhere in the United States, our
50 states, one of the tremendousadvantages we have is that, from
the beginning, we're a big freetrade zone. There's no trade
barriers, really, between the 50states some other parts of the
world, like in Canada, there aresome barriers between the
provinces, and that includestheir progress. Yeah, they're
actually trying to address that.
But that free trade within theUnited States has been just a
(06:10):
huge boon. But it all goes back,as you say, philosophically
thinking about it, tospecialization and exchange,
absolutely
Matt Kirchner (06:18):
and that, I mean, I can tell you again, as
somebody who worked inmanufacturing, all those all
those years, there weren't toomany employees that were doing
anything other than working inthat manufacturing plant,
earning a wage. And then thiswhole idea of specialization,
whether they were spending thatmoney on food, they were
spending it on a vehicle, theywere spending it on
entertainment, whatever thatwas, it really requires somebody
else to be a specialist in inthat particular area of
(06:39):
commerce, and that's what reallymakes and drives our economy,
you know, you think about Johnand you mentioned a little bit
earlier, in the case of acountry that is heavily
subsidizing an industry withwith government money or
monetary policy, or what haveyou, and then sending products
into a foreign economy, thosehighly subsidized products
(07:00):
selling, you know, at or belowcost in some cases, and trying
to crush domestic competition inthe short term to maybe create
leverage in the long term.
Certainly in those cases, werecognize, you know, the impact
and the importance of havingsome tariff policy that can
prevent those types ofbehaviors. You know, we hear
more and more in the currentadministration about using
tariffs or the threat of tariffsto drive political behavior. So
(07:24):
talk about that a little bit.
It's one thing to say, Okay,we're trying to maybe engineer
our economy a little bit, or tocreate or to discourage an
unfair advantage that maybe aforeign manufacturer, for
example, has. But what about onthe political side of things, to
influence political behavior. Isthat good? Is that bad? What are
your thoughts there? Yeah,
John Murphy (07:45):
so I do think there's a difference. As you
mentioned, there trade withChina is a big topic these days,
and of course, there's a growingrecognition around the world
that the Chinese economy,they're hefty subsidies. We hear
the term over capacity a lotbecause of Chinese industrial
policies, they have developed anovergrown manufacturing sector
(08:05):
that now produces about 30% ofthe world's manufactured goods,
and they only consume somethinglike 13% so that imbalance means
that they're going to try toexport their way out of their
economic problems, which aresubstantial. They have declining
demographic growth. They've hada big property bubble. Their
economy has slowed a lot, butthey think they can export their
(08:26):
way out of this problem. Sothat's a problem for the rest of
the world, sure. So that's onething I think is really quite
different when you look at NorthAmerica here. So Canada and
Mexico are our two largesttrading partners, right? And for
for many years, with Canada.
Going back to 1965 there was aUS Canada auto pact. We have
eliminated trade barriers, andincreasingly, we build things
(08:47):
together, right? This is aphrase you hear all the time
about us. We North Americans,and for instance, in the auto
sector, one of the largest partsof the manufacturing economy,
it's common for goods to crossthe border, 678, times in the
process of making a car.
Matt Kirchner (09:04):
I was just in Detroit yesterday having that
conversation, right? So we wereworking on a project with a
bunch of the automakers there,and exactly that conversation
that it's like, look, here weare in Detroit. You literally,
we were in the conference roomof the Detroit Regional Chamber
of Commerce, and you can seeCanada from the windows that
we're looking out of. And that'sexactly what they said. People
have no idea how many times, youknow, parts and components and
(09:26):
assemblies will go back andforth between the two countries.
John Murphy (09:29):
It's a very real thing. And because of that
relationship, because we'remaking cars together, if you
happen to be buying a car that'shas its final point of assembly
in Canada, you know, over halfthe content might be made in the
US and similar for Mexico, sure.
So what happens if you comealong with a tariff imposed for
whatever reason, you'reintroducing all kinds of
(09:49):
problems for American workers?
And one of my colleagues wasjust telling me about his visit
to a very large auto partsmanufacturing facility. And.
Hour to north of Detroit, andthe management there was saying
that if these tariffs comealong, we'll probably shut down
within days. This is a US plan,yes. Okay, yeah. So tariffs are
(10:10):
taxes. They're paid byAmericans. They are literally
paid by the importer. So it hasto be an American enterprise,
right? Substantively, we've seenthe tariffs in recent years
going back to 2018 they would100% of the costs were passed on
to American consumers andbusinesses. That's a problem.
Sure, at a time when we'retrying to get out from under the
(10:31):
inflation of recent years, thecost of living crisis, which is
real very much still with us,that's a problem. But for
manufacturing, it's even morethan that, that there are some
sectors that where we're just sointegrated with our our key
trading partners, like Canadaand Mexico, that tariffs are
really going to scramble things.
Autos is one. Medical devices,you know, another sector where
(10:53):
you might be importing a productthat's coming in from Mexico,
but well over half the contentis American. Another one is
power generation equipment,which is really very important
right now, with demand forelectricity rising with data
centers right electricity isquite a lot more expensive than
it was 10 years ago, all overthe US, and there's a real
shortage of transformers and theother equipment that goes to
(11:18):
strengthening the grid, buildingout the grid so that we can
structure you Yeah, that's one.
That is another. Tariffs wouldvery much scramble that, because
we do need those importedinputs.
Matt Kirchner (11:31):
Agree with everything you said, and really
fascinating to think about. Whopays the tariff you know that it
is actually a tax on on domesticcompanies and eventually being
passed on to consumers, right inone form or another, maybe, if
not all of it, at least a goodportion of it. What about the
impact on innovation? You know,you hear the argument about,
look, if we're creating anartificial competitive advantage
(11:51):
for domestic manufacturers,suppliers, innovators, because
they can now, if a foreigncompetitors, products are more
expensive in the in the US now,we've got a cost advantage, or a
pricing advantage, someleveraging there. Does that
curtail innovation at all? Imean, does that have an impact
on on the incentive for acompany to innovate, to remain
(12:12):
competitive with foreigncompanies and products that may
be either driving cost out ofthe product or adding features
and benefits to their productsthat we don't necessarily have
that need to here because wehave this cost or this pricing
leverage or benefit in themarketplace. I
John Murphy (12:27):
think it has a direct impact on innovation. One
interesting historical examplemight be Brazil's so called
informatics policy. Back in the1980s Brazil looked at the world
and said, We really need todevelop our own industry to make
things like consumer electronicsand early computers and so on.
And so they set up a big tariffwall around the country. They
(12:49):
provided some subsidies, andthey built out the beginnings of
an industry. And sure enough,within a time, they were able to
make some of these thingsthemselves. But the thing is,
they were very expensive andthey were very backward. They
were not globally competitive.
You know, when you're hidingbehind a tariff wall and not
competing out in the globalmarket, odds are you're going to
be falling behind pretty quicklytrade and the higher margins
(13:09):
that you get by exporting andgrowing markets that provide
some of the seed corn for yourresearch and development. If
you're not able to expand thatway, then it's it's going to
have an impact on yourinnovation in the long run. So
Matt Kirchner (13:25):
all these potential negative impacts of of
tariffs, and you know, I didn'tyet, we saw, most recently, the
the threat of tariffs, both onon Canada and Mexico, changed
some behavior, or at least itchanged some some dialog. And
you know, in this case, aroundthe concerns related to illegal
immigration, we did get somereaction, and we will see six
months a year from now how muchstaying power that has. What are
(13:47):
your thoughts around that partof it, that when we're literally
like trying to he's for as longas we're talking to, in this
case, about, or have been about,Canada and Mexico changing their
behavior, from a policystandpoint, using the threat of
tariffs, is that worthwhile? Notworthwhile? Scary. Okay, what
are your thoughts there?
John Murphy (14:06):
Well, these are important problems. You know,
the fentanyl drug traffickingcrisis is very real. I think we
all know people in you know,close or friends or relations
who've been impacted by thiscrisis, and similarly, illegal
immigration, and that's aserious challenge. Nobody wants
(14:27):
to support an open border thatdis control and people just
coming across without any senseof order. It's good to have a
focus on these problems. I thinkwhat we see coming out of these
exchanges with Canada and Mexicois a very sincere desire to work
on these on these issues, andsure, both of them came forward
with plans that they're puttingin force. They're substantial.
(14:50):
And particularly with regard toMexico, a lot of the immigration
into the United States for for along time, is not Mexicans. It's
people coming from other partsof the world. But. Afghans,
Chinese, it's a regular UnitedNations, but the Mexicans have
really stepped up in a big way,and they're cooperating with the
United States to lend greatercontrol there. So did tariffs
(15:13):
help that happen? I'm not sosure. I believe that both Canada
and Mexico have wanted to workwith the United States on these
problems, and if you look at theplans that they've rolled out,
they're sincere and serious,significant investments. So I
think it's positive that we'readdressing the problem and
certainly imposing tariffs atthis point when so much depends
(15:34):
on it for our economy, forAmerican jobs. It's really
important to see it through thatlens understood.
Matt Kirchner (15:40):
And so, you know, let's be a little bit of a
prognosticator, if you would. Imean, we nobody knows for sure
how much of this is, you know,saber rattling and trying to,
trying to maybe modulatebehaviors. I mean, nobody knows
how much of it is, maybe tryingto get and maybe that's another
question to explore, is tryingto get foreign governments to
change their tariff policies asit relates to exports from the
(16:02):
United States. Nobody knows howmuch of it is a true desire to
create more of a protectionisteconomy here in the United
States. When I say, nobodyknows, and maybe, maybe some
people do, but very few of us,if we're going to turn the clock
forward a year, John, how muchof this do you think actually
becomes part of US policy from atariff standpoint, and how much
of it kind of works its waythrough the rhetoric and never
(16:23):
really sees the light of day.
John Murphy (16:25):
That's a really good question. There's been a
lot of tariffs that the Trumpadministration has been talking
about. For instance, they talkedabout bringing back and full
force the steel and aluminumtariffs. That does appear to be
very sincere, and I believe it'sMarch 14, they're supposed to
come into force. That's going tobe, you know, heavy new costs
for the manufacturing sector.
Sure, I think that's real. Okay,it's going to have an effect.
(16:48):
Because, you know, look, tariffspring, concentrated benefits
and diffuse costs. The costs area lot larger than the benefits.
But if you're a steelmanufacturer, that's good for
you. What we saw with the steeltariffs when they were first
imposed in 2018 was the industryadded about 2000 jobs, but the
downstream industries, they lostabout 75,000 jobs. So if you're
(17:09):
a steel consuming industry, it'squite a burden to have to put up
with these much higher costs. SoI think that that's coming. I do
think that the administrationhas been clear, saying that they
don't want to have any carveouts, no exclusions for
individual companies, noexceptions for individual
countries, some of the otherones, it's less clear. I am
(17:31):
hopeful that we will not see thetariffs imposed on Canada and
Mexico, and in the long run, youknow, as a candidate. Now,
President Trump talked a lotabout imposing hefty tariffs on
goods from China. Right now, theadministration seems to be more
in deal making mode with theChinese, sure, so we'll see what
(17:51):
happens there. But I do thinkthat there is more of a
bipartisan consensus inWashington about tariffs on
goods from China, if they're nothappening right now, I don't
think that the tide is genuinelyturned against them in the long
run. Interesting. Well,
Matt Kirchner (18:06):
it'll be interesting to watch it roll out
over the course of the next 12months and beyond, and maybe
we'll have you back in a year,and we can look back and see
where we're where we're sitting.
You know, another topic on theon the tariff front, we've
talked about tariffs on onproducts coming into the United
States, but you know, a lot ofthe talk these days is about,
how do we normalize or maybecreate a level playing field in
the other direction, right? Sothere's a lot of countries that
(18:27):
are imposing significant tariffson our products as they leave
our shores and enter theirborders. What are your thoughts
on that? And, you know, just ingeneral, I mean some
observations on what you've seenglobally, and then whether our
tariff policy should be used totry to offset those, you know,
those tariffs that othercountries are charging on the
products that we're exporting tothem.
John Murphy (18:51):
Yeah, that's a great question. First of all, I
would say that we have ourcollection of free trade
agreements with 20 countriesaround the world, and if you
look at those, what they give usis that perfect reciprocity of
zero tariffs on almost allproducts, you know, more than
99.5% of products. And so thatincludes Canada and Mexico under
the US Mexico Canada agreement,usmca, but it includes other
(19:15):
countries such as Chile,Australia, Singapore, Morocco,
and they're hugely beneficial. Anumber of these are pretty small
economies, but by opening upthose markets and sweeping away
their tariffs, sure what you getis real market growth. And so
those 20 countries together,they buy almost half of all our
exports worldwide. Wow. Sogetting more agreements like
(19:38):
that is the kind of reciprocitythat I think the business
community can really rallybehind. So beyond that, you look
at other countries, like, say,Europe, European Union, or
Japan, their tariffs areactually generally pretty low
both of those, but the EU andJapan, their average tariffs are
actually lower than those of theUnited States. States, there are
(20:01):
exceptions. I think PresidentTrump has talked about how the
EU has a 10% tariff on autos,the US has a 2.5% tariff on
autos. So, you know, let's,let's wrestle with that. Let's
see what we can do with that.
And of course, there are alwaysother non tariff barriers, which
they can take all kinds offorms. Sometimes countries put
them together in a way thatappears to be singling out
(20:22):
American industries, like anumber of countries have imposed
these digital services taxes,which seem to target American
technology companies. So thereare very real trade barriers all
around the world, and goingafter them is worth doing, and
something the business communitysupports, but we need to do it
in a proportional way. I believethat through negotiations, you
(20:43):
can actually accomplish a lot.
Matt Kirchner (20:45):
So is it fair for me, as I'm listening to you talk
about the free trade agreements,policies like NAFTA have come
under fire over the course ofthe last several years, maybe
even longer than that, in termsof maybe a perception that they
created an environment whereAmerican manufacturing jobs were
being exported to othercountries. You know what I'm
(21:07):
hearing you say is, when we havethis balanced policy in fair
trade between countries, that'sa positive, I'm assuming, but I
want to hear your thoughts onit. Have policies like NAFTA,
agreements like NAFTA been a netpositive for manufacturing
employment. For example, in theUnited States, American
John Murphy (21:25):
manufacturers have very much benefited from our
trade agreements around theworld. And you see this in the
trade flows. We actually havemanufactured goods trade balance
more or less when you look atour trade agreement partners. So
by removing the tariff barriersthat other countries have, and
the non tariff barriers that aresometimes sneaky and not always
(21:45):
that easy to pin down, but ourtrade negotiators do a good job.
You really can turn smalleconomies into big markets. So
for the manufacturing sector, Ithink that's a real priority.
And our friends at the NationalAssociation of Manufacturers
have been very supportive ofthese trade agreements as well.
What we're not going to get,even if we have, if we built the
highest tariff wall in theworld, it's it's worth thinking
(22:08):
about, what are those jobs thatwe lost, that you are going to
get back? About half of all themanufacturing jobs lost on net
since 1979 which was the yearwhen we had the highest number
of manufacturing jobs in theUnited States 19 million. About
half of all the net jobs we lostare actually in the apparel
sector. You know, the apparelsector is not really the kind of
(22:29):
place that you would want, youknow, your child to grow up and
go work in. Because if you lookat the wages they paid in, say,
in the Carolinas or Georgia backin the 1970s you know, they were
seven or $8 in our currentdollars. Wow, seven $8
Matt Kirchner (22:44):
adjusted for inflation zone, right? Yeah,
yeah. So it's those. Those
John Murphy (22:48):
were bad jobs. And there's countries with much
lower costs and lower wages thatare happy to take those jobs,
and today we import that stuffand trying to bring that back.
Those are manufacturing jobs.
Those are manufacturing jobs welost. We should not be trying to
get those back. We should bethinking about the jobs of the
future. We should be thinkingabout the innovative economy
(23:09):
technology. You know, there'sbeen a big focus on things like
semiconductor manufacturing inrecent years. We need to rebuild
our defense base as well.
There's a lot of technologybehind that that takes a lot of
skilled labor, and that's whyyour your podcast is so
important.
Matt Kirchner (23:26):
It's a race on debt right here at The TechEd
Podcast, absolutely our reasonfor existing. So on that topic
of jobs, and the kind of jobs weshould be promoting here in the
United States, you know, touchon for a moment and a little bit
deeper. So we think aboutsemiconductors. We think about
technology now, of course, youknow, we'd already mentioned
data centers as it relates toenergy policy, but certainly
(23:47):
that being driven by artificialintelligence, machine learning
and advancements, there arethere types of jobs that we
should be focusing on here inthe United States in terms of
growth as maybe that's a policyquestion. Maybe it's just more
of a looking into the future,and what are the jobs of the
future? You know,
John Murphy (24:03):
you started off with a question about the
philosophy of free enterpriseand free markets. You know, I
think it's you really can't planthat too much, right? You want
to create the best possibleenvironment for businesses to
operate in an environment whereexecutives can plan for the long
term so that they can build,invest, hire, innovate, do that
(24:23):
R and D that calls for taxesthat aren't too onerous, a
regulatory environment that'spredictable, you know, not too
burdensome, right? And so on. Ithink that that's really how you
succeed in doing that. I dothink a lot about those jobs,
though, like the apparel jobs,or going back to the auto
sector, there's a lot ofdifferent parts that go into a
(24:43):
car, including wire harnesses. Idon't know if everybody's heard
of a wire harness, I certainlyhave. Yeah, it's a pretty simple
product. And, you know, they'remade in countries. They're made
in, you know, Mexico, Honduras,they're made in environments
with pretty low skilled labor.
Is low wage work. Sure, weshouldn't. Be trying to make
those jobs come back to theUnited States. We should
recognize that we have aprivileged position in this
(25:05):
industrial ecosystem. Ourworkers get to do the high value
added, high wage work, and sotrade helps us to do that. It's
also, I'm not picking on thepoor Hondurans, because it's
where you start in the globaleconomy, and you work your way
up, just like, you know,Americans did at a certain
point. Sure, we should be cleareyed about that not all jobs in
the manufacturing sector are thesame, and we should always be
(25:29):
trying to have an environmentthat favors the creation of
those high wage, high skilljobs. You know,
Matt Kirchner (25:36):
it's interesting that you bring up that that
whole predictable businessenvironment, and I used to argue
in this, maybe not quite as longterm as you're focusing on, but
when I was in manufacturing, andwe used to consume a tremendous
amount of natural gas, and weused to hedge our natural gas,
you know, years in advance. Inother words, try to create a
stable price for the company andand people would always be
(25:57):
asking, why are you trying to,you know, game the natural gas
market. What do we know aboutthe futures market? So that's
not what we're trying to do. Wewant to know what we're paying
for that particular part of ourproduct, so that or producing
our product, so that we take theguesswork and the variability
out of the business model, andthe more predictable our
business model can be withthings that maybe we can't
control, the more we can focuson the things that we can
(26:19):
control. And it sounds to me, amI getting that right? That
you're kind of thinking about itthe same way that the more you
know, more predictable our tradepolicy can be, the more our
executives and our companies canfocus on, okay, I know what that
environment with some degree ofcertainty is going to look like
now I can focus on those partsthat I can control. Is that kind
of what you're after there?
John Murphy (26:39):
That's hugely important. And it comes back to
the tariff question. Right forexecutives to be able to plan
they want to have thatpredictability, and I think
there's plenty of evidence thattariff threats, even if they're
not executed, can impose a realcost on the economy. We saw this
back in 2018 2019 when we sawtariffs imposed on a variety of
products coming into the UnitedStates. What you see is business
(27:03):
confidence waiver. I think theUniversity of Michigan has this
index everybody refers to aboutbusiness confidence. And the
next thing you see is businessinvestment. And we saw in 2018
the tariffs cause businessinvestment to go down. You're
going to sit on the sidelines. Ithink there's a danger right
now, if you look at the economy,is now really the time when you
(27:24):
would build a new plant orexpand your current operations.
If you're dependent to somedegree on ability to sell your
goods in Canada and Mexico andso on, or if you're dependent to
some degree on some importedcomponents from Canada or
Mexico, are you going tosuddenly be paying a lot more
for them? Is that going to messup your plans? So you can see
(27:44):
the real nexus to that questionof uncertainty and confidence
going forward, and that'ssomething that we we really need
to value much more highly. I
Matt Kirchner (27:53):
think. Got it. So let me, let me ask you this, and
maybe a little bit of apolitical question, but are you
as fascinated? Or is maybefascinated is the right word.
Maybe it isn't. But you look at,I came of age, as I mentioned in
the intro, during the Reaganera, that's where I started to
get at least kind of followingpolitics and policy a little
bit. So back in the, you know,in the 1980s and back in those
(28:15):
days, I mean, it was theconservative or Republican, if
you will. Viewpoint was tariffsare bad, free markets and
competition are good, and it wasmore the Democratic side of the
aisle, maybe fueled a little bitby strong union influence as
well that well, we need moreprotectionism where, you know,
if it's whether it's a Japanesecar that's coming across the
(28:36):
border, we need to create someprotectionism for our domestic
manufacturers and create an areawhere they're not as influenced
by foreign competitionadversely. And now, I mean, it's
like the opposite, right? Imean, you know, you look at the
and I don't want to get overlypolitical, but you turn on
MSNBC, and now tariffs are badand protectionism is bad, and
you're watching Fox News, andit's like, well, you know, we
(28:58):
need to punish these othercountries that are maybe not
playing as well with the US aswe would like them. Are you as
fascinated as I am by thatjuxtaposition in the political
environment? It
John Murphy (29:08):
is interesting, isn't it? You know, I recently
learned a fancy word from anexpert in public opinion
polling. The word isthermostatic. It means that, I
suppose, another way to say itis that people are ornery and
they don't like being told whatto think. They may say in an
election that they want onething, but once they see a
certain policy imposed, theystart to sour on it. And I think
(29:30):
it happens time and again, sure,but, you know, looking at public
opinion on trade, I think it'sespecially volatile, because the
reality is, people don't thinkabout trade very much, right?
There is a lot of evidence. Youknow, I've seen opinion polls
for years, they always find thatof all the priorities that
people rank, usually somethinglike the cost of living or the
economy or jobs or there's arecession and there's a high
(29:52):
unemployment, those are thethings that are at the top. And
there's usually maybe 1% of thepublic that will really say
anything important about trade.
Trade, and I think that lendsthe volatility and people also
will follow. If you are aDemocrat, you're going to adopt
the policy positions on theselow importance issues of your
party leader, or, similarly, fora Republican, right? Sure. So I
(30:14):
think that's a lot of whathappens here. But as a guy who's
worked on trade for 25 years.
There may have been a time whenI might have said to myself,
gosh, I wish people paid moreattention to trade, but here we
are now, right? Yeah,
Matt Kirchner (30:27):
yep, exactly. You know, it's interesting. One of
the stories I love to tell isthis is back when George W Bush
was the president, and he hadproposed moving Daylight Savings
Time by three weeks. And I havetons of friends all over the
political spectrum. And all ofmy conservative friends are
like, Yeah, this is a reallygood idea. I think the
(30:48):
President's on to something. Andall my liberal friends were
like, you know, this is theworst thing in the world. And
you know, then it's not sun'snot going to come up until
whatever, and kids are going toget run over by their school
busses waiting for them in themorning and so on. And I'm like,
you know, there's a lot ofthings that should come down to
our political philosophy, butwhen we turn our clocks forward
and back, doesn't seem like itshould be one of them. So I
think that was just an exampleof what you said is that
(31:09):
sometimes people will follow theherd of whatever you know,
whatever political side theythey identify with, at that
particular point in time,regardless of whether you know,
people are sitting here havingin depth conversations about
tariffs and political philosophyand so on. Yeah,
John Murphy (31:23):
you know, I will you do make me think of one
thing, people are paying alittle bit more attention today
to trade. And I was just lookingat some of the recent polling.
There's a CBS poll which, amongother things, actually gave the
president pretty high marks, butit said that the thing that
people wanted the most, thatthey were not seeing was more
attention being paid to pricesthat what are we going to do to
bring prices down? Right? Andthe administration is not doing
(31:45):
enough on that. So this is byfar the biggest, the top
finding, and a pretty importantone, right? Because the
election, we just had inflationand the cost of living was
arguably the number one issuefor sure. So not a surprise that
people want the White House tofocus on this, and at the very
bottom of the list of thingsthat wanted people want to see
was tariffs. And people dounderstand that tariffs are
(32:09):
taxes and that they're going tosend costs up, and that's why,
that's also, I think, why you'reseeing inflation expectations in
various surveys are going up,right? You know, it's been
painful trying to get them to godown, and we really don't want
to lose that progress,absolutely.
Matt Kirchner (32:24):
And I think the President actually even
acknowledged that in the wake ofsome of the tariffs that are
being proposed that that couldhave an adverse effect on
pricing. So, and I think just,you know, the theory of
economics is tell, tells youthat that's what's going to
happen if we have significanttariffs, we will hard to both,
you know, raise a tax onsomething as it's coming into
the country, and drive pricesdown at the same time. So I
think not an economics expert,but I know it well enough to
(32:46):
know that there's a potentialissue there is, if I'm a
business leader, John, and I'mtrying to figure out you touched
on before. Hey, you know we havethis uncertainty that may have
an adverse impact on capitalinvestment. Is one example that
you raise. How do I need to bethinking about current policy
and kind of the attitudes towardtariffs and trade as I'm
(33:07):
planning for the next 12 to 36months in my business. Well,
John Murphy (33:11):
I think it's a bit of what we've seen in recent
years, including with the COVIDpandemic. People need to think
about their supply chains andhow you're going to spread your
risk, how you're going tomitigate your risk, and one of
the ways you do that is just bynot putting all your eggs in one
basket, right? Do not dependentirely on China to source all
of you know some neededcomponent. Try and have a I've
(33:33):
seen this in the press the Chinaplus one strategy, right? I've
heard it from businessexecutives
Matt Kirchner (33:38):
exactly, mitigate some of that risk, Yep, yeah.
And I
John Murphy (33:40):
actually, there was actually a Wall Street Journal
article quite recently thattalked about the ABC strategy,
which goes a step furtheranywhere by China, right? So,
and you know, a lot of companieshave done that kind of thing.
They're sourcing more fromSoutheast Asia or Mexico.
They've moved some operationsthere. Obviously, they want to
do as much as possible in theUS, but that tends to be the
(34:04):
high skill, high wage parts ofit, and it's in your production
processes you often want tocompliment that with some
components that come fromsomewhere else. And businesses
would really like to have thecertainty that that direction
that they've been getting foryears, that don't depend too
much on China, is still thedirection, right? You know, if
you started to expand youroperations in Mexico instead,
(34:26):
which is good for the UnitedStates, because stuff that's
made in Mexico has a lot more UScontent in it. Sure. Can we not
tariff that, right? You know,
Unknown (34:34):
exactly I get it. So, yeah,
Matt Kirchner (34:36):
interesting. So, so taking it to the other end of
the spectrum of manufacturing,one of the things I insisted
with my kids when they weregoing through whatever came
after high school was we'll helpyou with that. But I want you to
work in manufacturing. I wantyou to spend some time around
production. I want you to knowthe amazing people that work
creating the plants andfactories across the United
States of America and and knowhow hard they work, how dead.
(35:00):
Dedicated they are to themanufacturing sector, to their
work, that these are justgenuinely, genuinely amazing,
good, productive people. And I'mproud to say that they both had
that experience as they were,you know, working their way
through what came after highschool. Just tremendous respect
that we have here at the podcastfor those people that are adding
credible value to our economy,those 13 million people that you
(35:20):
mentioned, as we were gettingstarted here,
John Murphy (35:22):
it could be my son soon. He's graduating with a
degree in mechanicalengineering. Really, I think
this is where he's looking. So,you know, we're all in on it. So
sorry to ask where he went toschool. Case, Western, yeah, in
Cleveland,
Matt Kirchner (35:32):
Ohio. Awesome.
Yeah. I just, I mean, it is, andto choose engineering as a
career that kudos to your son,because that's really, really,
Unknown (35:39):
my hope is born to it.
Yeah, exactly. It's a calling,and it
Matt Kirchner (35:43):
is and manufacturing, especially for
people who spent a lot of timein and around it, there is
nothing like getting to the endof the day and looking over your
shoulder and saying, I madethat, or standing at the end of
a semi truck that's leaving thedock and saying that I had a
part in building all thoseparts. And that's just, it's a
rewarding feeling ofaccomplishment that most people
(36:04):
don't ever get to, you know, getto experience. We've got 13
million people in the US, youknow, working in manufacturing.
That means we've got whateverthe number is, two, 90 million
or whatever that are that arenot more than that. So very few
people get that, that feeling ofaccomplishment. So, so awesome
that your son is taking hiscareer in that direction, with
regard to those people that aredoing that work, and the people
(36:25):
that your son will have anopportunity to work around. If
I'm the person, I'm a machineoperator, right? I'm a machine
tender in a manufacturing plant.
I'm an industrial maintenancetechnician making sure that all
this equipment continues workingand so on. What's your message
to them? I mean, what do theyneed to be do they need to be
considering trade policy? Whatshould they know about all these
things that we're talking abouthere? It's
John Murphy (36:45):
always good to be informed. Understand what's
going on at the US Chamber ofCommerce. We're doing more in
civics education. You know, it'swe think it's terrific when
people engage with and sharetheir views with their members
of Congress and other electedofficials. That's how it's
supposed to work, and it doesn'thave to be way again with your
member of Congress, like votefor this bill or don't vote for
(37:06):
that bill, just helping electedofficials to understand this
very complicated economy that wehave, sure it's not always very
easy to understand, and it's youand I have this privilege of
hearing so many interestingstories about The incredibly
innovative things that come intoour economy and how it all works
together. It's educating policymakers is important. Certainly,
Matt Kirchner (37:27):
educating policy makers is important. Informing
themselves is important, as youthink about ways that they can
do that, I'm an employee workingin a manufacturing plant. I'm
hearing this podcast. I'm like,You know what? I don't want to
run off and a degree in foreignpolicy or a degree in economics,
but I at least want to make surethat I'm informed enough to make
good decisions, and if I am, youknow, interacting with
(37:49):
legislators or with other publicpolicy makers, I want to be able
to have a coherent conversation.
Where can they go for thatinformation? Well,
John Murphy (37:56):
I always encourage people to get involved in their
local Chamber of Commerce.
You're visiting Milwaukee,because I'm coming to an event
with Wisconsin manufacturers andcommerce, a great State Chamber,
but municipal, Metro chambers,local chambers, just do a great
job, and they're always havingprograms where you can learn
more about these issues. And youknow, a lot of them will have
trade events throughout the yearas well, and on a variety of
(38:18):
other topics, workforcedevelopment, such a challenge in
this country we're, you know,we're blessed with low
unemployment right now, yeah,but it certainly makes it hard
to keep that talent pipelinefilled for sure, so many of
these public policy issues thatchambers get involved in awesome
Matt Kirchner (38:37):
two more questions for you as we close
out our time with you, John, thefirst One is, we all had our own
journey through education. I'vegot probably more opinions about
education and what we could bedoing differently than maybe
anybody else on the planet. Idon't know, but if you think
about the world of educationthese days, is there something
that you believe about eitheryour trip through education or
(38:57):
the state of education here inthe United States that would be
a little bit different thanmaybe the way others would look
at their education, the world ofeducation. Well, you
John Murphy (39:06):
know, I think about people in Washington, because
I've been living and working inWashington for, you know, 30
years, and there are a lot ofpeople who make a good living,
who are sort of journeymenwithout a whole lot of deep
expertise in anything. And, youknow, you can hop around from
job to job, but to me, it's thepeople who develop the deep
subject matter expertise, andthat's part of your college
(39:26):
education and but it's somethingthat you cultivate after that as
well. Sure, you got to do that,yeah, at the same time, you're
not just about that one thing. Ireally appreciate the colleagues
that I have who are able toapply their classical education
and invoke the Greeks orShakespeare or something, that
there's benefit to that roundededucation as well.
Matt Kirchner (39:46):
Awesome, yeah, I love that. And as somebody is a
product, actually, of a liberalliberal arts education. Studied
business, but at a liberal artsuniversity, I talk often about,
yeah, the hardcore learning, theat that time, the nuts and bolts
of public accounting and.
Counting and so on. Really,really important. But I learned
as much in courses like theologyand philosophy as I did, maybe
even more in terms ofcommunication and abstract
(40:06):
thinking than I did in some ofthose hardcore courses that were
really central to what I endedup doing initially in my career.
So super, super good advice. Andspeaking of advice, you know,
let's turn the clock back alittle bit. We haven't mentioned
this yet, although, as we werewarming up, we talked about you
growing up in or near FortCollins, Colorado. Let's you
know, you're a sophomore in highschool back then, 15 year old
(40:27):
young man, whole life ahead ofyou. If you could go back in
time and give that person onepiece of advice, John, what
would it be? So
John Murphy (40:37):
I was thinking about this a little bit. I think
I would counsel myself to, youknow, don't be afraid to hang
out with the weird people, youknow, because, again, I live and
work in Washington, a lot ofpeople are not that weird, but
you learn so much from thepeople who think different,
absolutely right? I think I'vebeen blessed in my life to not
just to be able to hang out withpeople who were who were
(40:58):
different, but they activelysought me out, and it did me a
lot of good. So, you know, when,when they come knocking, you
know, go out and experiencesomething completely novel with
the richness of humanity and allthe people who are not
necessarily the same as youabsolutely,
Matt Kirchner (41:12):
one of my really, really good friends actually
talks about, he, and he's a he'san artist, and very, a very
successful one. I taught art atthe Chicago Institute. Talks
about, he started his artclasses with his new students,
about, look, your whole lifeyou've been a weirdo, is what he
said. And I want you to knowthat you're now with a bunch of
weirdos, and it's okay to be aweirdo. And I just think about
(41:32):
I've made, actually, a similarcomment many, many times, is
that my most interestingrelationships, and I've gotten
an opportunity to meet lots ofpeople and build numbers of
great friendships. The mostinteresting ones are the ones
that think about the world justa little bit different than I
do. So I think that's really,really good advice. I think the
fact that you you said, youknow, when those people seek you
(41:54):
out, and in this case, you know,the weirdos at The TechEd
Podcast came knocking and youaccepted the invitation. Really
appreciate the fact that you didthat, John, that's great advice.
Awesome conversation here abouttrade policy, about tariffs,
about the impact on education,about how our young people
should be thinking about theircareers. Really, really glad
that you took some time for ushere on The TechEd Podcast. It's
been great. Thanks for havingme, and we'll have you back
(42:16):
again maybe a year or two fromnow, and we'll look back on
what's happened in the world oftariffs in the world of trade
policy and so on. It is going tobe an interesting ride here in
the United States of Americaover the course of the next
several months, and maybe evenover the course of the next four
years. But with any luck, ourmanufacturing sector and our
economy as a whole will bebetter for it. Looking forward
to that, looking forward toseeing everybody next week on
(42:39):
our next episode of The TechEdPodcast. In the meantime, be
sure and check out the shownotes. We will link up all of
the great content that we talkedabout here on this episode of
the podcast with our friend JohnMurphy. So check out the show
notes. Those will be at TechEdpodcast.com/murphy that is
TechEd podcast.com/m u, r, p, h,y. And also be sure and visit us
(43:02):
on social media. You'll find uson tick tock, on Instagram, on
Facebook, on LinkedIn, whereveryou are, we will be there as
well. Reach out and say hello.
Thanks again to John Murphy, theSenior Vice President, Head of
International for the US Chamberof Commerce, for joining us
here. We will see you next week.
Until then, I am your host. MattParker, you.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
Ridiculous History
History is beautiful, brutal and, often, ridiculous. Join Ben Bowlin and Noel Brown as they dive into some of the weirdest stories from across the span of human civilization in Ridiculous History, a podcast by iHeartRadio.