About Michael Czinkota

Professor of International Business and Trade at Georgetown Univeristy, Washington, DC, U.S. and University of Kent, Canterbury, UK - http://www.faculty.msb.edu/index.htm http://www.twitter.com/#!/michaelczinkota http://www.facebook.com/169628456631

New World, New Policy: Buy American, Hire American

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President Trump has issued a new executive order focusing on so-called “Buy American, Hire American” policies. Making the announcement at the Snap-On Tools plant in Kenosha, Wisconsin, the President’s order directs various federal agencies to produce reports and recommendations on government procurement policies, with the goal of increasing domestic employment and production.

The Executive Order (found here) covers two broad areas of government policy: numerous “Buy American” laws and regulations, which set requirements that materials purchased by the government – say, steel for building a bridge – give preference to US domestic producers; and “Hire American,” which aim to address reported abuses of H1B visas that undermine high-skilled domestic labor.

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Curative Thinking at Georgetown

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Across the long arc of history, few are innocent, but some are wise enough to make good on past wrongs. I’ve written about the importance of curative thinking as vital in bringing the soul back to business. Georgetown University has demonstrated such curative thinking recently, as the below article from the Georgetown website demonstrates.

April 18, 2017 – An apology from Georgetown and the Society of Jesus’ Maryland Province for their roles in the 1838 sale of 272 enslaved individuals for the university’s benefit took place today in the company of more than 100 descendants.

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The Soul of Business: From United to Volkswagen

soul“The soul leaves the body” is a common euphemism for death, but what about “when the soul leaves business”? This is increasingly the case, as business managers care more about the bottom line than about decency and curative behavior. As I explore in my article in Qualitative Marketing Research, business must change: the soul must come back home.

Wrestling for the soul of business is nothing new. Each year we are reminded about just how far some companies are falling short. In 2015 Volkswagen cheated emissions regulators. United Airlines recently bloodied a passenger while dragging him from a plane the company had overbooked. Most stunning to me is that not a single United employee – pilot, ground crew, or flight attendant – interceded to say, “This is wrong.”

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New World, New Policy: Dumping penalties – Give to Cesar what you owe to Cesar

money from all over the worldPresident Trump has issued a new executive order focusing on international cheaters, who do not pay their debts due to dumping penalties. The order targets the problem of unpaid special customs duties known as “Countervailing Duties” (CVD), levied on products from companies found guilty by an “anti-dumping” investigation.

First to the jargon: “Dumping” refers to a type of predatory trade practice. In its simplest form, it amounts to a company selling a product in a foreign market for less than it costs to make it. In theory, the goal of “dumping” is to drive down the price, and in doing so, muscle out smaller, weaker competition in order to later establish a monopoly status on that market. Under the rules of the World Trade Organization, dumping is a prohibited practice, and countries are permitted to levy special taxes on goods found to be unfairly dumped in their market in order to rebalance the price level. These tariffs are called “Countervailing Duties”, abbreviated as CVD.

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New World, New Policy: A Review of the Trade Deficit

President Trump announced a new executive order aimed at pushing forward his trade agenda. Targeting the US trade deficit, the order directs the Commerce Department and the US Trade Representative to lead an interagency investigation and produce a “comprehensive report” on the causes of the US trade deficit. They are to do so by looking at specific industries and trade policies by foreign countries that contribute to the continuing gap between US exports and imports.

According to the US Census data on trade, the US ran about a $500 billion net trade deficit in Goods and Services with the rest of the world in 2016. The US runs a larger deficit when looking only at Goods (such as manufactures, agriculture, etc.), at $750 billion, while the county runs a surplus of about $250 billion in Services (such as business services, finance, information technology, etc.). Broken down by country, the largest Goods deficits are with China (over $54 billion in the first two months of 2017) and Mexico, as well as Saudi Arabia (petroleum imports) and the European Union. In Services, it is noteworthy that the US runs sizable surpluses with all of these same countries. (Data from US Census) Continue reading