Francisco Sánchez Transcript: Sept. 15, 2025
Kevin Johnson/NPF (00:01):
This is going to be a moderated discussion partially, and then we want to go from my questions, which may or not be relevant to what you’re thinking about, to yours, but it’s only meant to start off the conversation with our keynote speaker today. And as many of you know or have come to realize in today’s super heated political environment, it’s really difficult to find accomplished people who are willing to share their expertise in a thoughtful and instructive way. With Secretary Francisco Sanchez, he checks just all of the boxes, and we’re so fortunate to have him with us today. Small business was a major concern during his previous life in government when he served as the US Undersecretary of Commerce for Trade. Nominated by then President Obama as undersecretary, Mr. Sanchez led the International Trade Administration in its efforts to improve the global business environment by helping US businesses compete abroad. Please welcome Secretary Sanchez. Thank you. Extremely lucky to have you.
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (01:29):
I’m happy to be here. And I feel like the pressure’s on because it’s the end of the day and you have a cocktail hour right after this, so we’re going to try to make this interesting.
Kevin Johnson/NPF (01:40):
So you’re standing in the door between them and cocktails, but we’ll try to dispense with those thoughts. And so earlier this week and last week as well, we got a look at a lot of data. Much of it was pretty depressing. Consumer prices are on the rise. Job creation has slowed, tariffs are creeping into the economy increasingly, and there was a striking number as part of an analysis of the Chamber of Commerce, which is sponsoring this program in which they found that small business importers or facing $200 billion, 200 billion in annual taxes related to tariffs. So on that note, on that great good news note, I’m wondering, Mr. Secretary, what you could tell us about what the long-term looks like, even the short term looks like for small businesses and for those who are trying to sustain those operations.
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (02:55):
Great. Well first of all, Kevin, thank you for inviting me. I’m delighted to be here. Anybody from Florida here? Oh, OK, good. I asked because I’m from Florida. I live part-time here and part-time in Tampa. So where are the Floridians? Where are you from? Orlando. OK. Just down the road, kind of Miami. Oh, Miami. I lived in Miami. Oh, OK. 13 Bay News. Very good. All right. I am not trying to be partial to Florida, but just there’s that connection, but he is, maybe we start, why is the president doing this? Would that be a good place?
Kevin Johnson/NPF (03:45):
That’s fine. Jump right in. He’s right up the street. Yeah.
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (03:51):
So he has a couple of goals not necessarily consistent with one another, but the president has had a belief long before he ever jumped into politics that the rest of the world was treating us unfairly when it came to trade. So this goes back, you can see comments that he’s made going back over 20 years. I’m not quite sure that that makes sense, but this is what he believes. I say that because the system that we’re under has helped the United States be the strongest economy in the world for almost 80 years. So it’s kind of hard to understand how other countries could take advantage of us while we make ourselves first. We created the system and we’ve benefited from it for over 80 years. But that’s one, he has a strong belief that there’s an inherent unfairness and one of his main measures is whether a country is selling more to us than we’re selling to them. He says it’s unfair if a country is selling more to us than we’re selling to them. Interestingly enough, he’s focused on products because if you look at services, we have a surplus with many countries around the world in the sale of surplus. It seems on its face that that’s a worthy the goal, but it has a lot of challenges. Let’s start with the fact that today we have over 500,000 jobs in manufacturing. I call it advanced manufacturing, that we cannot fill today 500,000 jobs that cannot be filled.
(05:52):
Mostly they can’t be filled because of education. These are not our fathers or grandfathers manufacturing jobs. The effect of unemployment rate is about 2.3 to 2.4%. Well, if we somehow bring hundreds of thousands if not millions of jobs in and we have an effective rate of 2.4%, again, who’s going to do the work? Another goal is to raise money. President passed the big beautiful bill, it’s protected to add about three and a half trillion dollars to the deficit over the next 10 years. In a nutshell, costs are going up, and so the small businesses are either going to have to eat those costs or they’re somehow going to have to persuade their customers to pay more. Another challenge is supply chains, right? Businesses have developed supply chains over years, and it’s not easy depending on what it is your small business does, if it relies on a number of different components to make their product, it takes a while to get a secure supply chain.
(07:19):
So all of a sudden it may become impractical just because of the cost, right? If you import from Brazil, for example, right now, Brazil’s being slapped with 50% tariffs. So all of a sudden you’re going to try to go to a country where maybe it’s not 50%, maybe it’s 20%, maybe it’s 15%, but you’re scrounging around. Some small businesses will say, well, I’ll bring my manufacturing to the United States. That’s good, but it’ll take about two to three, four years sometimes, because you can’t turn that on a dime. And don’t forget that the first things I talked about earlier, right? You don’t have a lot of people in the workforce right now. Unemployment’s sticking up. So maybe that’ll change in a while, but I think you have those issues. So it’s going to be challenging in terms of supply chain, it’s going to be challenging in terms of costs, and it affects across the board, whether it’s construction, whether it’s retail, hospitality, restaurants, no one is immune.
Kevin Johnson/NPF (08:33):
Tomorrow we’re going to hear from small businesses who are already feeling the pain from tariffs. And so we will get a sense of how they’re feeling and how they’re trying to adapt. But I wonder if you could expand a bit on, you had mentioned the president’s aim at Reshoring manufacturing, and I wonder how prepared are small businesses to try to take advantage of that, or at least to restabilize their businesses, if that is indeed the aim?
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (09:10):
Well, I have found both in my time in government and my time in the private sector is that small businesses are resilient, by and large, and they’re pretty creative, but even the most resilient and creative, small businesses still need time. I have clients right now that are looking for help and how to adjust to the new trade policy, and a number of them are saying, I’m going to bring manufacturing of my product. The product that I sell, one in particular I’m thinking of is in the construction space. A second one is in fencing for residents. Well, actually residents and small businesses, but they currently supply, they get their stuff made overseas. Both of these companies are saying they want to come here, but it’s going to take them under the most optimistic of circumstances two and a half years, and probably more realistically about three years. And that’s tough to have to hang in there for three years till you can do that.
Kevin Johnson/NPF (10:13):
Sure. You mentioned immigration also touched on that, and we’ve all seen how immigration measures we’re supposed to focus on violent crime, but that campaign, as we’ve all seen, has moved beyond the goal. How would you characterize how this is testing small businesses, whether it’s farms, restaurants, construction companies, what have you?
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (10:45):
I think the current immigration policy as it’s evolved, as you said, it seemed to initially focus on those that had committed violent crimes either in the country they came from or since they’ve been here, but they’ve expanded that. And I think that expansion is risky for small business and risky for the economy. One of President Trump’s goals is not only to Reshore, but to encourage foreign companies, not just American companies who are supplying from abroad, but foreign companies to manufacture here. He says, if you want to sell here, make here. Well, 10 days ago, the Hyundai plant, which is doing what he said, even before he got here, they have a plant. They have, I don’t know how many hundreds of employees and the Korean employees that they have there are there to train Americans, and then they’re going home, and these employees got thrown up against the wall. I mean, they literally up against the wall and being detained. That can send a very chilling message to companies abroad who may want to respond to the president’s urging to come here. So I think that’s a real problem. Farmers, farmers rely on undocumented workers because there aren’t enough workers here. And interestingly enough, farmers have come to the White House and complained, and the president in fact has said to ice, Hey, go easy on this. So
(12:33):
I guess the squeaky wheel, at least in some industries, seem to get a response. And the ag industry seem to have gotten some relief on that. But I don’t know that the same has happened for restaurants, for hotels, construction, construction in Florida. I don’t know how they can function. So I think it makes a lot of sense to go after criminals, and by criminals I mean violent criminals or people that commit robberies, those kinds of things. But our economy has come to rely on this immigrant labor, and until Congress and the President together are willing to come up with a comprehensive immigration reform package doing this comes with big risk. And by the way, Congress and the President working together on this, this is not Trump’s fault, it sounds like I’m kind of pooing a lot of his policies. This is something you are, but this is something that no President and Congress have been able to do, and partly because the immigration issue has become such a polarized issue.
(13:53):
There was, during the Obama administration, there was the gang of seven, I think, or gang of eight, gang of eight, four Democrats for Republicans in Congress who were trying to work together to put together a comprehensive immigration reform package. Well, they got savaged. They absolutely got savaged as consorting with the enemy, and here they were trying to work together to come up with an immigration reform package. And so it’s hard to do. It’s really hard to do. But this approach that’s kind of evolved that would have you go after the South Koreans that are here, training American workers, comes with some risks to our economy and to small business in particular.
Kevin Johnson/NPF (14:44):
One of the internal structures that you’re very familiar with, the International Trade Administration has inherent in that are these network of offices all over the country, which many of you may be aware of. I think more than a hundred offices in local communities across the country with a goal of promoting local US businesses abroad. The administration has moved to cut staffing in those offices. And I wonder, as somebody who’s very familiar with how this works, what kind of impact does that have on a pathway to success?
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (15:28):
Well, first of all, a disclaimer, I ran the International Trade Administration, so I’m a little biased. I don’t run it now. I haven’t for a long time, but I’m still proud of the work that all of those folks did, and they worked quite a bit for small business. What Kevin’s referring to is we have representatives around the country that are international trade experts. And so for a lot of small businesses that may have a product or a service that actually has a market abroad, it can be intimidating to think of trying to sell something in South America or Asia or Europe. And these folks tried to one, demystify it, say, look, it’s not that tough, and here’s some tools that we can help you with. And we did everything from set up trade missions we had for a very small cost. We would set up, let’s say you had a company that wanted to go into the market of Poland.
(16:37):
We could set up appointments for you in Poland. So let’s say you wanted an agent to represent your company in Poland, we would do the legwork ahead of time. And so when you landed in Poland, you literally were handed a schedule and you had vetted representatives who would be reputable folks that could represent your product, just an example. So that’s the kind of work they did. And so I worry, I think it’s a good value for what it costs to run that program. I think it’s a terrific value and it particularly helps small business. Now, we help large companies too.
(17:18):
I may be getting ahead of this, this is not, but one of the things that we did at Commerce when I ran the International Trade Administration is try to identify non tariff barriers. So USTR, the office of the US Trade Representative is responsible for negotiating trade agreements, and they guard that, right? So if ever I decided I wanted to go across to a country and start negotiating something, they would go crazy. My colleagues at USDR. So I tried not to do that. But what I did do was I would go to other countries and negotiate on non tariff barriers. So one of the things that I’m most proud of it, it helped one company, an iconic company, was Harley Davidson. So Harley Davidson wanted to go to India. They were already in India, but they were selling, I don’t know, maybe three motorcycles a year. I’m exaggerating. They probably sold a few more than that, but not many more. And part of the reason was because their motorcycles were getting a 50% tariff slapped on ’em.
(18:32):
In talking to my counterpart in a bigger context about reducing barriers to more trade in both directions, what if we got Harley Davidson to set up a factory in India to assemble the motorcycle? So we would put the kits together. Look, I’m already saying we, like I was part of Harley Davidson, it was never part of Harley Davidson. And after we successfully did this, I was in India and they wanted me to ride one and take a promotional video, and I said, you do not want me to do that. You’re going to destroy a really nice bike. So I’m not doing that. But so we worked out a deal and we took the terrorists from 50 to 10%, and there was a 10% tariff on kits, what they call kits, and the kits would be sent to India and then they would assemble that. So I worked on that stuff and I didn’t get in trouble with USCR because I wasn’t hammering out trade agreements, but this had a tremendous impact. And so that helped companies that were as big as Harley Davidson. And I could give you a couple of other examples where we did stuff for ge, for Boeing, and for a bunch of others. But I would say a lot of our work focused on small business, and a lot of it came from those offices that you referenced.
Kevin Johnson/NPF (20:03):
Now that you mentioned the non tariff barriers, what are other examples that could be used to help pave the way for small businesses to get into markets in other countries
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (20:19):
Like non tariff?
Kevin Johnson/NPF (20:20):
Yeah.
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (20:22):
Well, first of all, does everybody understand what I mean by non tariff barriers? You want me to give kind of an example of that? That might be good. So tariffs, you get, right? That’s a barrier because it increases your cost. But countries can also do things that make it hard, and sometimes they’ll pass a regulation under the health and welfare of their public, which it has very little relevance to that, but they’ll throw that in there and it becomes almost prohibitive to sell your product. And sometimes they honestly don’t do it on purpose, right? Sometimes they do it and it has the effect of making it tough to do business. This example is not small business, but UPS, which small business relies on to deliver their products all over the world. So UPS has spent millions of dollars and years in developing the way their drivers get out of their truck, take their product that they’re delivering out of the truck and deliver it so it’s efficient.
(21:33):
And they came up with this system that allowed them to, from the driver’s seat, to go right to the back. So you didn’t have to get out of the car, open the back thing, you just go in there and get out. Hong Kong where I happened to be going on Friday, had a law that you could not enter the back part of the truck from where the driver sit. So it totally screwed up UPS’s system. And all of a sudden they had to get out from the driver’s seat and go to the back, sat down with my counterpart, and I said, look, can you tell me a little more about why you passed this? Well, for safety? I said, well, tell me a little more about that. What do you have studies on this? He couldn’t find some enterprising bureaucrat decided this was safer. So through with UPS’s help, we showed, look, we have studies to say that there is no safety risk here, and this allows UPS to function well, and they’ve invested a lot of money. Would you consider modifying this regulation? They did. And so UPS was able to improve. So we did things like that.
(22:51):
Sometimes it was more generic. We set up things called commercial dialogues with countries that we weren’t selling a lot of stuff to, but we should have, I say should have because a country like India, India, which is now I think the largest country in the world by population, when I was under secretary, it was already pretty big, and we weren’t really selling much anything to India. Our two-way trade was anemic. So we set up this commercial dialogue and we looked for ways to reduce the difficulties of doing business in a general way. Indonesia was another one. Indonesia is another huge population, and we were selling nothing to them, virtually nothing. So we got with them through this mechanism of a commercial dialogue, and we used the, I think it was the World Economic Forum, had a metric on ease of doing business, and they ranked every country in the world on ease of doing business. And so we said, why don’t we work together to get your ranking from where it was? And India was, I don’t know, maybe 60 or 70, if Indonesia was like 130, meaning 129 countries were easier to do business with Indonesia, and let’s see if we can improve the ranking over the next three years and get you into maybe the top 50. Well, that kind of stuff will benefit our businesses because it’ll become easier to go to find that market, to get into that market.
Kevin Johnson/NPF (24:36):
During the Obama administration, you helped oversee the what’s called the National Export Initiative had the goal of doubling US exports between 2010 and 2014.
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (24:54):
I knew you were going to beat me up on this.
Kevin Johnson/NPF (24:56):
It didn’t quite get there. And I’m not saying it — I mean you guys made a lot of progress, but what did you learn from that experience and how could that experience be applied to what’s through the forces that we’re seeing now?
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (25:15):
Yeah, so what Kevin’s talking about is President Obama challenged the entire government, not just the International Trade Administration, but the entire government to work together to double exports, I believe, from 2010 to 2014. And I was hoping for a more modest goal, but he wanted to double, and I understood it because he wanted us to reach, right? He did not want this to be easy. He made sure it wasn’t easy. That was a tough goal to reach. But what we did was we took all the agencies that touched on trade, so XM Bank, the SBA, that had some assistance as well, the USTDA, which is the US Trade Development office, they give money.
(26:16):
If a country is going to open a new airport or a port, well that’s an opportunity to sell all kinds of stuff. Those are big infrastructure projects. USTDA would fund feasibility studies using American engineering firms and other consulting firms and hopefully position American companies to do that. So we all did. It was like an all of government approach, and we got to, I think about 27% increase over four years, which was pretty good and made a big difference. We actually sold a lot more goods over that time. But what made a difference, one was coordinating with everybody that had some role to play that was one. Two was doing a better job of reaching small business in particular the big companies knew what the opportunities were, didn’t need to educate them, but small business, which represents over 80% of private sector employment in the United States. We needed to reach them, and I think we did a better job. We not just the International Trade Administration, but every agency that had some office, some personnel that focused on that, we did a better job of letting them know how we could help them and what opportunities they had.
Kevin Johnson/NPF (27:35):
I didn’t want to bring up a sore spot, but I think you turned it into a positive there. I’m going to sort of stop here because I think this would be a good opportunity despite the sirens for you to chime in with your questions. So we’ll get a microphone to you as soon as we see some hands.
Jasmine Robinson | Verite News (27:59):
My name is Jasmine Robinson. I’m a reporter for Verite News in New Orleans, Louisiana. And earlier you were talking about that metric around ease of doing business for different countries. What goes into ease? I don’t understand. What makes it easier? What makes it more difficult?
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (28:22):
There are a couple of different organizations that have these indexes. The one that we happen to use with India and with Indonesia was the world economic Ease of doing business. And if I’m not mistaken, it has the World Economic Forum I think has 40 or 50 different things that they use. So one of them could be how long does it take to incorporate to set up, you say you want to set your company in a country, how long does it take? So that’s one. For example, tariffs are probably going to be another one. How expensive to come in with your products? So I can’t remember. I wish I could remember, but I haven’t worked on this for a long time, but you should be able to look it up. You should be able to look up world economic form, ease of doing business. The World Bank may also have one, but like I say, there are about three or four of ’em.
Tanya Babbar | Hearst Connecticut Media (29:35):
Hi, my name is Tanya Babbar. I’m with the Hearst, Connecticut Media. Just call it CT Insider there — I don’t think anyone there knows that either because they took all the little papers and put them all in one big one.
Either way, I think this question is going to be a little broad, so I’m sorry.
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (29:53):
That’s all right.
Tanya Babbar | Hearst Connecticut Media (29:54):
You talked about businesses that could maybe in three years, two and a half years bring their manufacturing to the us. Are there any specific types of businesses you think are most primed to do that? It felt so broad to me. I wasn’t sure who I think about space, what type of industry is even in a good spot to start manufacturing here that typically doesn’t.
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (30:21):
So it’s a great question, especially given that that’s one of the president’s primary goals. So great question. If it’s labor intensive, I think that’s the challenge here. I had a client who’s a pretty amazing woman. She’s today 95 years old, and I’m helping her transition into philanthropy and get out of her business. But she was way ahead of her time realizing that there were going to be tensions with China and the United States and weird combination of products. She made towels and work boots, two different factories, but somehow she managed to do, and at one time was selling over a hundred million dollars a year in towels and work boots in the United States. Well, she decided she was going to bring factories for towels and work boots here. The work boots almost made it didn’t quite work to what was really hard, finding workers that could do that kind of work. We hadn’t had a shoe industry here in 40 years, but that one really could work because the people that bought that liked the idea of buying American, but it was tough. The towels was a disaster.
(31:53):
We didn’t find a lot of people that really cared if the towels were made in America or not, right? There just wasn’t that same feeling as the work boots. And so price was the big thing, and to try to make those towels here, it was just hard. So I share that story with you because if it’s labor intensive, I think that’s going to be a challenge. I don’t see us making a lot of stuff that like televisions or jeans, things like that. I just don’t think that’s going to make it. I think we need to look for things that have more that are higher value and manufacturing that requires more skill, which is what we want anyway. We want high paying jobs as much as we can. So the kind of things that I think I could see us making here more, which we already do, medical devices and airplanes, we still make jets here, computer related things, chips.
(33:04):
I mean, one of the things I think that President Trump is doing that is very strategic is encouraging chip development here. And I’d like to see more of that because one, it’s high paying jobs and it’s also where we need to be competitive. If you think of China as our chief economic adversary, which I believe it is, I don’t care if China sells as genes, I don’t care if they sell us flat screen TVs, but I want us to be ahead of them on chips, on artificial intelligence, on everything that I believe is really going to be about the future. So those are the kinds of things I think that’ll work for small business. It’s more of can you supply all the components you need to do it here, right. So the two clients I mentioned that I have, one is the fencing guy and the other makes some kind of construction product. He believes eventually he can supply, it can source all the different components here. If you can’t do that, that’s going to be tough. But if there’s a possibility to do that, then that’s kind of the things I’d look at
Kevin Johnson/NPF (34:32):
Way back here. And then over here. We’ll get you.
Lucia Maffei | Boston Business Journal (34:39):
Thank you. I’m Lucia Maffei and I cover tech for the Boston Business Journal. I’m originally from Italy, so I am also have a very self-interest question in my own self-interest. I’m curious to ask you, when it comes to tariff and you think about the relationship within the US and Italy, where do you think tariffs are going to be the biggest are going to have the biggest impact? And what comes to mind when you think about the state of the trade relationship between the US and Italy right now? Thank you.
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (35:13):
Well, just like I gave a disclaimer that I used to run the International Trade Administration, and I’m very proud of the work that the folks that worked with me there. I’m also a free trader. I tend to have a bias toward free trade. So I worry. I worry that policies that rely on high tariffs don’t promote a lot of trade or don’t promote as much trade as a different policy would. And that’s certainly true for Italy. And so I know we buy a lot of luxury goods from Italy. I’m sure we buy wine from Italy, we buy cars from Italy, not any car I can afford, but what we buy fancy cars from Italy.
(36:10):
I think if I could broaden it beyond Italy, one of the things that worries me about a high terror of policy is that we hurt ourselves in the longterm. And so how do we do that? Well, people start countries start looking at other markets instead of necessarily trying to build a strong trade relationship with the United States, number one. Number two, I mentioned one of the things I want us to be not only competitive, I want us to win against China is in technology. And one of the things you need for a lot of the technology products are critical minerals. So I’m taking your question if I may, and I’m expanding it beyond Italy. But thank you for the question because it really goes to the heart of one of the concerns I have is Brazil, right now we have slapped 50% tariffs on Brazil. And by the way, interestingly enough, we have a trade surplus with Brazil, all products, which has largely been the basis for imposing terrorists on just about everybody else. But President Trump is using it to make a policy statement, a political statement, in that he believes that the former president of Brazil has been unfairly treated through the courts in a trial that he was just convicted and sentenced to 27 years in prison.
(37:54):
Well, Brazil has critical minerals and they’re in our hemisphere now, call me crazy, but I would like to be able to have a relationship with Brazil that could help us have access to critical minerals. Why is that so important? Well, right now, China controls about 80% of the critical minerals in the world, and they have already weaponized critical minerals. They’ve done it off and on over the last 15 years. And how do they weaponize them? Well, they just stopped selling them to us. They literally just say, yeah, we’re not going to sell you any right now. Maybe later, but not right now. I don’t want to be dependent on a country that sees us as an economic adversary on something that we need for our future. So I worry that where building relationships for our own economic future, we could be hurting ourselves, right? Geopolitically, India I mentioned earlier, is now the largest country in the world. It’s another democracy. I mean, we should have a natural affinity for a country that is a democracy. And it looked like kumbaya between Modi and Trump back in February. In fact, I think both leaders said they were going to have a trade agreement done by March, and now I forget what the tariff number is with India, but I can’t get the picture out of my head of Modi Putin and Xi Jinping at a military parade.
(39:46):
That’s troubling to me. So you suggested, how does this affect Italy? I think that there’s risk, there’s big risk involved, not only with Italy, not only with Europe, but with key trading partners around the world.
Omar Mohammed | The Boston Globe (40:07):
My name is Omar Mohammed, I’m with the Boston Globe. So just to follow up on that question, how do you foresee the future of free trade in light of the fact that now we are seeing these sort of pockets moving away from the US and developing their own sort of almost unofficial trade blocks, and what will be the impact for us small businesses that export to the rest of the world in light of these sort of punishing reciprocal tariffs that the us, us businesses are now facing abroad?
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (40:47):
Well, a couple of thoughts. First of all, the idea of promoting free trade as we did for years and years under both Republican and Democratic administrations is probably gone for a long, long time. It may well come back, but it’ll probably be when my grandchildren are adults in the workforce. And that’s not just for the United States, by the way. There’s been kind of a trend, if you will, in countries around the world toward protectionism. And part of it is because free trade didn’t deliver for a lot of countries in terms of jobs, in terms of prosperity. So while I tend to be a free trader, I also acknowledge that it’s not the panacea that free traders and folks that promoted globalization suggested it would cure all your ills. It didn’t do that. And so what’s different here is that the United States never really did what we see President Trump doing in his first term, and even more so in his second president, both President Bush’s Bush one, Bush two, bill Clinton, Barack Obama.
(42:16):
Barack Obama was against two free trade agreements during the campaign and under his tenure, we negotiated the transpacific partnership and another one that was of equal size with Europe. And had we signed those two, they would’ve been the two largest free trade agreements signed by any country in the world in the history of trade. So here you have Republicans and Democrats forever following a certain model that’s gone. And what’s different is that the United States was never really part of that. I shouldn’t say that we were protectionists in the past, but we hadn’t been say in the last 50, 60 years. So when you have a player as large as the United States retreating from that, it’s going to have a huge impact. And in some ways, it reinforces the feelings that a lot of people have in other parts of the world where they were frustrated with such open trade. So I don’t see free trade, if you will, reemerging anytime soon. The WTO has been a mess, not just in the last year or two, but in the last 20 years or more. So what do I see? I see bilateral trade agreements, maybe regional trade agreements, but probably more restrictive, kind of a back to not opening up the doors completely, but that’s where I think we’re headed.
Ashley Murray | States Newsroom (44:08):
Hi, Ashley Murray from States Newsroom. You spoke briefly about your work and the work of these trade offices and across the country helping small businesses break into foreign markets. I guess when I travel overseas or when I think of exports, I only think of large businesses, and so I think I have a little bit of a blind spot. Can you give us some examples of what these small businesses are exporting and what other markets want from the US small businesses?
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (44:43):
It’s a great question. First of all, we’re a world leader in services. A lot of what we export are services. They can be engineering services, for example, they can be in the infrastructure and consulting space, so that’s one. They can be companies that make components for bigger products. So it is probably stuff that you may not even be familiar with some kind of component that goes into some kind of product. It could be in energy, right? In energy production. I have a client in Polk County, Florida. Do you know where that is? And they make generators and they sell ’em in different places. They sell ’em in South America, they’ve sold some in Europe, and it’s a company that has about 150 employees. So it’s say a big in the services space. And then you have these niche businesses that provide products, sometimes just components for products. Hi, Kelly.
Kelley Bouchard | Portland Press Herald (46:00):
Hi, Kelley Bouchard with the Portland Press Herald in Maine, Maine. It’s interesting, and I was hoping that maybe you’d have something to say about the lack of discussion around automation in its impact on trade decisions now and in the future, especially as AI is rising. Automation has been in the works for over a century, but it’s this elephant in the room as far as we don’t have enough workers. We are still judged by the work we do in our society. We are pitted against those who can work, those who don’t work, the workers versus the doers and the don’t doers, whatever, and who makes more money. And on a global scale, how that might impact these trade relations. It just seems absent and it’s actually sort of bullying ahead. It’s happening. And I was curious how you see automation working out in favor of anybody if they’re not paying attention?
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (47:19):
Well, if we think about President Trump’s goal of bringing manufacturing here, I see automation and AI as a positive, and I’ll explain why. If we can make the cost of labor not such a big component of that product, then it’s easier to make it here and sell it here. Now it’ll be fewer jobs, but it’ll still be jobs, right? It’ll be jobs of companies that may not otherwise come back here or that might otherwise leave here. So anything that allows us to have something, right? Washing machines. We used to make washing machines here and there were factories with 2000, 3000 employees. If we brought back a washing machine factory today, it probably would have about two or 300 instead of two or 3000, but it’s two or 300 jobs, and chances are they’re going to be higher paying jobs because you’re going to have to know how to work computers and be a little more advanced in your manufacturing. So I think it could be a positive forth in bringing things that you might not otherwise be able to do here. The bigger picture that I think you’re also alluding to is, well, how is automation and AI going to impact jobs generally? That’s a bigger question that I don’t know that I have the answer to, but at least as it relates to reshoring, I actually see it as a potential positive to bringing jobs here in manufacturing that we might not otherwise be able to afford to do here.
Matthew Glowicki | Courier Journal (49:15):
Hi there. My name is Matthew Glowicki. I write for the Louisville Courier Journal. I had a question thinking about small challenges that small businesses face now, I think back to five years ago during COVID, when all we were talking about were supply chain challenges and a lot of discussion at the time looking to diversify supply chains fine and source supplies within the states. I’m wondering if now five years out, if we have been able to assess any long-term impacts from that. I’m thinking have small businesses maybe built more resiliency as they now face these tariff challenges?
Francisco Sánchez/former U.S. Commerce Trade Undersecretary (50:00):
Yeah, it’s a great question, and you’re right. Supply chain resiliency was a real buzzword for the whole time that COVID was around. And I suspect, again, I haven’t really looked at the data, but I suspect that you have some companies that said, well, I never want to go through that again. And so they did become more resilient. The challenge with having a more resilient supply chain is it’s usually a more expensive supply chain, right? Well, why is that? Well, because one way that you have a more resilient supply chain is you have multiple suppliers. Well, if you have one, that’ll give you a great deal because you’re buying all of your stuff from them, you’re probably not going to get as good a deal if you’re buying from three or four or five folks. But you’re also not dependent on one supplier that could disappear if they go through a pandemic, for example. So I don’t know how many have changed. I would say that there’s always that cost benefit analysis of cost, which is the most efficient, is find a really great supplier and just get all your stuff from them versus spending a little more and knowing that you won’t have disruption, whether it’s because of a pandemic or a natural disaster or some other reason. I suspect it’s kind of all over the map,
Kevin Johnson/NPF (51:30):
Getting my teeth drilled again. No, but I want to thank you so much for spending the time and sharing your expertise with us today, and also want to thank you for spending the time with these folks and answering their questions. And so with that, I wanted to thank Secretary Sanchez. Thank you.
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