WASHINGTON - America’s economy will continue to grow this year, expanding at 2.6 per cent, US Chamber of Commerce president and chief executive officer Thomas Donohue predicted, pushing back against warnings of an impending recession.
But he cautioned that the economy needed skilled foreign workers and political parties in polarised Washington needed to recreate the middle ground and fix America’s broken immigration system, as well as pay more attention to upgrading infrastructure – a promise thus far lost in political acrimony.
He also welcomed the new USMCA – the US-Mexico-Canada Agreement which has replaced the North American Free Trade Agreement (Nafta) – and urged Congress to approve it. He urged the White House, as well, to drop steel and aluminium tariffs on Mexico and Canada now that the agreement had been reached, as encouragement to other trading partners also hit with the tariffs.
In the context of trade negotiations with China, he welcomed the administration’s attention to China’s theft of intellectual property, forced technology transfer and other unfair practises. But he added that tariffs were essentially taxes, and American businesses were in favour not of a trade war, but more trade.
“The modern trading system is an American triumph,” he told a packed audience at the Chamber in a State of American Business address, against the backdrop of a partial federal government shutdown and crucial trade negotiations with China.
“Selling Made in America goods and services to the 95 per cent of the world’s consumers who live outside the US is absolutely fundamental to our growth and prosperity as a nation.”
“Forty nine of every 50 US companies that sell goods overseas are small businesses – many of them could not survive without trade, especially in America’s heartland,” he noted.
“Optimism is consistently high,” Mr Donohue said.
“Business owners tell us they have been encouraged by stronger economic growth. We have achieved a growth rate in the last year that many 'experts' claimed was out of reach. And it was driven in no small part by deregulation and tax reform.
“The Chamber projects continued growth of around 2.6 per cent for 2019. We expect unemployment to remain low, wages to keep expanding, and inflation in range of the Fed’s target of 2 per cent.
“Rumblings of a recession just don’t match up with reality. Even with all of the challenges in Washington, uncertainties in the world, and fluctuations in the markets, strong economic conditions are expected to hold steady for the foreseeable future,” he said.
Mr Donohue made his strongest pitch for diversity and inclusiveness, and admonished the administration for what he called “governing by crisis”.
"We must have a steady supply of talented and hard working people to do the work of a modern economy so our nation can compete and lead," he said.
"And we need the right policies, systems, and opportunities in place to prepare those people so that they can compete and succeed.
"Our nation is falling short on both of those imperatives," he warned.
"We have people without jobs - who lack the skills or education to fill open positions. And we have jobs without people - employers tell us positions are sitting vacant because they can't find workers they need, when and where they need them.
“Dysfunction saps confidence, threatens growth, and consequently poses a threat to opportunity in this country,” he warned.
“Many of Washington’s troubles – including dysfunction, division and incivility – could be helped by rebuilding the political centre and restoring responsible governing,” he said.