As the White House champions a “hire American” agenda, the administration wants to slash funding for a small government office that many U.S. companies say they rely on to stay ahead of foreign rivals, underscoring how competing political interests are complicating President Donald Trump’s pledge to restore the manufacturing industry.
The Trump administration is seeking to nearly gut funding for a Labor Department bureau that monitors the treatment of foreign workers, a program that U.S. businesses and labor groups alike say helps American workers compete fairly in the global economy. The program is unpopular among some conservatives, who criticise its backing for groups that support labour unions.
The behind-the-scenes funding fight comes as the White House seeks to demonstrate its progress on Trump’s campaign promise to stop outsourcing jobs to foreign countries, hosting a series of events this week showcasing “Made in America” goods.
But experts say bringing back manufacturing in a substantial way would require dramatic shifts in trade policy, corporate incentives and international business deals. Those challenges are underscored by the business practices of the apparel brand owned by the president’s daughter, Ivanka Trump. The company relies exclusively on low-wage workers overseas, and executives say it is impossible to bring its production back to the United States on a large scale, as The Washington Post reported last week.
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“There are certain things that we may not have the capacity to do here, in terms of having a plant or a factory that can do it,” White House press secretary Sean Spicer conceded Monday when asked about companies such as the Ivanka Trump brand that say they cannot produce in the United States.
Meanwhile, major U.S. food and apparel companies are warning in letters to Congress that the deep cuts the White House wants to make to the low-profile Bureau of International Labor Affairs would undermine American workers.
Among the corporations urging Congress to restore the bureau’s funding are well-known brands such as the Gap and Hanes, as well as Nestlé and PepsiCo, two of the largest food conglomerates. Many companies see the office’s work as a check on foreign competitors who operate under loose labour rules, and they depend on the bureau’s reports on global labor conditions to inform their compliance efforts.
Without the bureau’s efforts to improve workers’ rights oversees, “you’re saying, basically, that it’s okay for forced labour and child labour to run rampant, which undercuts our own labour force,” said Nate Herman, a senior vice president for the American Apparel and Footwear Association.
On the other side of the debate are many House Republicans and the Heritage Foundation, the conservative think tank, which has objected to spending Labor Department money to promote the welfare of foreign workers.
The proposed cuts have highlighted a central tension in Trump’s administration: that his policies often directly impact the businesses he and his family members continue to own while they are in public office.
Executives at Ivanka Trump’s brand recently told The Post that some of the company’s factories participate in an international program called Better Work that seeks to boost workplace conditions and prod foreign governments to strengthen labor laws. The initiative has received nearly US$23.6 million from the Labor Department since 2010, according to Better Work officials.
Ivanka Trump’s company declined to comment on the administration’s proposed cuts to the labor bureau, which would eliminate grants for Better Work. A spokesman for Ivanka Trump did not respond to requests for comment.
White House officials did not respond to questions about why the administration is proposing to eliminate US$67m of the bureau’s US$86m budget, a nearly 80 per cent reduction.
In its budget proposal, the administration said the move is necessary because many of the grants handed out by the bureau were of “questionable long-term effectiveness.” With fewer resources, the bureau could focus “on ensuring that U.S. trade agreements are fair for American workers,” according to the White House’s Office of Management and Budget.
A Labor Department spokesman declined to comment.
The administration’s budget closely resembles a blueprint developed by the Heritage Foundation, which proposed cutting the labor bureau by 80 percent.
“I think it would make sense to get them out of international grant-giving and focused on stuff that has to do with labor in the U.S.,” said David Kreutzer, a senior research fellow at Heritage focused on labor and trade.
The Bureau of International Labor Affairs monitors labor provisions in international trade agreements and finances projects to reduce child and forced labor in countries such as Bangladesh, Madagascar and Tunisia. It also produces a comprehensive annual report that catalogues foreign goods made with forced or child labor.
“It’s the best tool we have to examine what’s happening in supply chains overseas,” said Reid Maki, director of child-labor issues for the National Consumers League.
Last month, 13 major American clothing brands and manufacturers sent a letter to congressional appropriators urging them to preserve money the bureau gives to Better Work to improve garment factories in countries such as Haiti, Nicaragua, Jordan and Bangladesh. Among the signatories were the Walt Disney Co. and PVH, the parent company of Calvin Klein that once made shirts and neckties for the Donald J. Trump brand.
Objections to the cuts were also raised by five of the country’s biggest food companies –Mars, Nestlé USA, the J.M. Smucker Co., PepsiCo and Kellogg –which wrote a letter in May to congressional appropriators urging them to preserve funds for the bureau.
“Any lowering of such standards would harm American workers by making the global labor market less fair, giving a competitive advantage to countries who do not play by the rules,” the companies wrote.
Labor unions, too, have joined in support, saying the bureau has helped protect American workers from being forced to compete with exploited laborers overseas. The AFL-CIO sent a letter in March to appropriators, co-written with the corporate advocacy group U.S. Council for International Business, saying the bureau’s work helped in “creating markets for U.S. exports, creating good jobs at home and making it more likely that imports consumed by U.S. consumers are made consistent with American values.”
The debate highlights the difficult decisions Trump faces as he tries to fulfill his ambitious pledge to bring back manufacturing to the United States.
The biggest showpiece so far of his “hire America” agenda came in April at the headquarters of toolmaker Snap-on in Kenosha, Wisconsin, when he signed an executive order stating that federal agencies should “maximize, consistent with law . . . the use of goods, products, and materials produced in the United States.”
Administration officials said they intend to boost the agenda further through deregulation and trade renegotiations.
One rule already on the books could help Trump push forward on his pledge.
A federal law signed last year by President Barack Obama allows U.S. customs officials to seize goods made with forced labor at the border. The law was formally implemented last month, allowing anyone to report imported merchandise believed to be made with forced or indentured labor.
The White House did not respond to a request for comment on how it plans to enforce the rule. But the U.S. Customs and Border Protection has urged companies to closely examine their supply chains to ensure that slave labor or child workers are not involved.
Sarah Altschuller, a lawyer at Foley Hoag who specializes in corporate social responsibility compliance, said the law could be used to further Trump’s America-first agenda.
“You could see the administration come down quite hard on this, that it’s a way of saying, ‘We’re protecting the American workforce,’ ” she said.