One of the biggest jobs bills to clear the Senate this session — one that could create or save two million jobs at no cost to taxpayers — passed with strong bipartisan support more than 200 days ago.
Now, it’s time for the House of Representatives to act.
American workers and American manufacturers can compete with anyone. We have skilled, productive workers and world-class infrastructure. But when a country like China purposefully manipulates its currency so that its exports are cheaper, that’s not competing — that’s cheating. And when countries like China don’t play by the rules, it drives American companies to go out of business, and it harms our economy. U.S. exports are more expensive, and cheap imports flood our markets, ultimately costing American manufacturing jobs.
Too many jobs.
Last year, the U.S. trade deficit with China reached a new record, of $295 billion. In April alone, the deficit was $24.5 billion, nearly one billion each day. A report released last year estimates that our trade deficit with China, exacerbated by Chinese currency manipulation, has caused the loss of more than 2.8 million American jobs since 2001 — including more than 1.9 million manufacturing jobs. Ohio alone has lost more than 100,000 of those manufacturing jobs
just as a result of the Chinese trade deficit.
Currency manipulation provides an unfair subsidy to Chinese exports — of up to 40 percent, by most economists’ estimates — and represents the most protectionist policy of any major country since World War II, according to economist C. Fred Bergsten of the Peterson Institute. And when American manufacturers try to sell their products to China — our nation’s fastest growing export market — they are hit with the same percentage in what amounts to an unfair tariff. The cost advantages enjoyed by Chinese manufacturers cost American jobs.
That’s why I introduced the bipartisan Currency Exchange Rate Oversight Reform Act of 2011. This bill, which cleared the Senate by a 63-35 vote, would ensure a fair and level playing field for American manufacturers.
The centerpiece of the bill, which I worked on with Sens. Olympia Snowe (R-Maine), Charles Schumer (D-N.Y.) and Lindsey Graham (R-S.C.), treats currency manipulation as an unfair subsidy and an illegal trade practice — providing our government with the tools to impose duties on these products flooding our markets.
It’s clear that Chinese currency manipulation undermines American manufacturing and our very own job-creating efforts. Last year, a report by the Economic Policy Institute showed that addressing currency manipulation could support the creation of 2.25 million American jobs.
Jobs can be created when trade laws are enforced. In Ohio, for example, following the International Trade Commission (ITC) ruling in 2010 in response to a petition by Ohio seamless steel tube producers, V&M Star announced it would build a new facility in Youngstown, Ohio, creating 700 jobs and more than 400 good-paying permanent jobs.
Unfairly subsidized imports harm our ability to innovate and compete. Allowing Chinese currency manipulation to also be treated as an export subsidy would allow more industries — from autos to clean energy — to petition the Commerce Department and the ITC to stand up to unfair foreign imports. It could mean jobs for a number of industries, and no more foot-dragging by our government when it comes to standing up for American manufacturing.
Our bill also includes new ways for the administration to combat currency manipulation. By improving oversight of currency exchange rates, the bill would ensure that the Treasury Department properly identifies countries that undervalue their currencies and act accordingly. It would also establish new criteria to identify countries manipulating currency — and trigger tougher consequences for those that engage in such unfair trade.
Our bipartisan bill is a jobs bill. It would help level the playing field for Ohio businesses and manufacturers and help spur our economic recovery.
Workers and manufacturers have endured years of talking and no action. Now, it’s time that the House stands up to the Chinese, and helps fight the war waged on American manufacturing.
Brown is the senior senator from Ohio and serves on the Senate Appropriations Committee.
EconomyInCrisis.org
More impressive-sounding nonsense.
V&M Star? French mini-mills? Yeah, that’s the answer. Who needs a real American real mill?
But about currency manipulation, as I wrote last month:
When you hear people complain about China’s “currency manipulation,” remember that everyone making money on U.S. imports, which totaled $238.6 billion in March alone — beginning with the multinational corporations and banks that control our politics and media — makes more money when China keeps the US$ high. China accomplishes this largely by purchasing our Treasury securities — so we can add “American politicians” to our eye-opening list of China currency manipulation fans. Even American consumers, it should now be evident, are bewitched, if unknowingly, by China’s currency manipulation: overpriced real estate and underpriced consumer goods. The well-intentioned patriots lobbying against China’s clearly criminal currency manipulation have less chance of succeeding than I do of winning this November’s election; but I admire their efforts, if misapplied (they should focus on tariffs), and generally believe that they, like me, are doing whatever they can to help our country.
Remember there is a price for these so-called cheap imports. Remember US exports are the price of imports. So the US exports jobs, technology, factories and trades ownership of US companies to import consumer goods and fund military ventures overseas. It’s a really bad terms of trade. It’s like exporting the cow for milk.
The only way to really begin to remedy the situation is for every state to create their own state bank like North Dakota. The state of North Dakota deposits tax revenues in their own state bank which they use to recycle funds within the state to fund industrial activity. If every state had their own bank they could decide how to invest their funds like into local manufacturing. Remember countries like China, South Korea, etc all have their own industrial and development banks that recycle funds regularly into certain sectors.
North Dakota is an example to look at it because it has budget surpluses, low unemployment, a growing GDP and low bankruptcy rates. Some will say their oil boom is whats growing the economy; yes oil has helped but then again other states have more natural resources but have higher unemployment and lower GDP growth.
China is a scofflaw. The policing authorities — the IMF and the WTO — have decided never to issue a ticket for China’s daily violations. The only recourse is to apply the standard remedy for injurious subsidies, a countervailing duty. Majorities in both houses of Congress have voted for such a remedy in the past two years. The only people standing in the way are: John Boehner, the Club for Growth, Tim Geithner and President Obama. Friends of Mercantilism makes for strange bedfellows indeed!
China can manufacturing anything we can manufacture at one-third to one-tenth the cost.
Assuming this 40% advantage the Chinese gain by currency manipulation is true, and we can force them to stop doing it, it’s still not going to bring our jobs back.
I say it’s nothing more than a diversion. Congress can drag this out for several more years, and not have to face up to the real solution - “balanced trade.” (Google it if you haven’t already done so.)
By blaming currency manipulation for the destruction of our economy by China, we put China in complete and total control of our fate. Our politicians can claim that “China won’t play fair, and there’s nothing we can do about it.” By taking this tack, they don’t have to take a stand or be the aggressors. They can simply drift along as they have for fifteen years and continue to pretend that they care, about us and about the country.
Thank You Senator Brown you got my vote as soon as the bill becomes law. We need to recognize all the variables of the issue of unfair trade and correct them all. Currency manipulation from China and Japan just being one of their many tactics… Bruce Bishop is absolutely right about the dragging out and pretending tactics. I’m sure there are many more unfair tactics being used but this all the more reason we need a Congress and Senate and President who will act for us for a change and move quickly and with stern force and conviction to save what is left of the manufacturing industry. One must never be afraid to do what is right or to do the right thing…
“…… as soon as it becomes law”
You got that right, William Ryan. Many bills that are good for the nation are killed by the oligarchs in closed door deals before they can be passed. Our Congress would rather play politics of their self interest rather than fix the nation’s economy.
I hear Mitt Romney talking about China and off shoring of jobs. I am glad he is talking about it but talk is talk and the Congress doesn’t seem inclined to do anything but pander to the oligarchs so it will remain just talk. Fixing currency manipulation, as Bruce B. says will not fix the whole problem— it is just a step in the right direction. These problems and solutions are not new except to many of the new people elected into Congress. It is only new to them. The leadership of the r. party is not inclined, by all evidence, to do anything except cut taxes and deregulate as they justify it based on the failures of outcomes directly related to Congress and the Pres. It is a losing strategy for the economy and I hope people see through it at the polls. The oligarchs will always be able to pick off enough from the d. party to stop any real headway as long as the oligarchs are able to pull their puppet strings. We have seen that when in power, neither party had the courage to lead the nation in good policies.
Tom T.
I think the Chinese manufacturers know how to “game” our political system better than most Americans do. The money for sell out politicians- lobbiest,manipulation and delay are some of their favorite tactics. It’s time for decisive action,talking is going no where…Lead Follow or get out of the way…I want a “can do” government and a “can do” economy.
There is ample evidence that it’s subsidies and not low labor costs that give Chinese-made goods a price advantage.
China Watcher,
Would you be willing to share this “ample evidence” with the rest of us?
Whether you take Mo’s position that our trade deficit with China is the result of capital being exported or Bruce’s and Dr. Bob Goldberg’s (these are not whole positions but main thrusts) position that it is a difference in labor costs that creates the trade deficit makes little difference. The reality is that less would happen with both things corrected but that our country lacks the political will to address either—largely because of the globalists who are benefiting from these policies are 1) reaping the benefits of arbitraging our standard of living to the rest of the world, 2) paying off politicians and policy makers (stacking of federal bureaucracies from within). Our trade policy is the largest impacting federal policy we have outside of brute force of our military and it is being gamed by the elite (including the interests of BOTH presidential candidates).
Both capital and labor are the incentives to outsource. Senator Jon Kyle (R) says that businesses “should be free to make money” (implicitly any way they can even though it is his job to make sure it isn’t at the expense of the country as a whole) and the democrats on the other side who have the reigns of power and can not competently execute them partly because of the fear of attacks that big money will bring. Big money Walmart will say that solving these two problems will only bring higher costs to consumers (they are one of the biggest benefactors of sourcing from the least common denominator and receive a competitive advantage when they do so). It is a fear of the present money and power and the fact that they are hooked on it that prevents a real solution.
We have two presidential candidates who are both guilty of saying one thing and doing another. It is a contest of who will lie the most. Meanwhile our country gets gamed.
This whole scenario is one of putting worldly principals over principles of good management of our economy.
On the question of whether it is capital or labor, they are interchangeable. Walmart will go with the lowest price even if it is 5% lower and so push towards killing the goose that lays the golden egg. Capital is amassed in China because of the structure their policies have created. The cheap labor means that more capital can be concentrated. It is a battle of the oligarchs of the world at the expense of the U.S. and two parties so bought off or scared by the power of the oligarchs to push what is in the interest of the U.S. as a whole. China’s totalitarian government just doesn’t have those problems and they continue to game the system.
Meet the Press this morning should have been called Meet the Hypocrites.
Even Grover Norquest, who will push tax cuts to solve the above problem while ignoring the fact that his one sided approach has made us the largest debtor nation in history (aside from the WWII debtors to fight the war) and economically making the underlying problems.
None of us should get in the debate over which one, labor or capital is the one cause of our economic demise. It is both working together and either one could undermine our economy as it is doing. Thanks Bush family, thanks Bill Clinton family and thanks Obama family for giving us these structural problems as all of you benefit in your own way. Not tackling America’s problems and instead serving your self interests and those of the oligarchs have been a disservice to our economy. The facts are indisputable.
Tom T.