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For millions of Americans, April 15 is a day of dread. Taxes are due, and long lines at the post office beckon.

But in some circles, that date has a whole other meaning entirely. April 15 also happens to be one of the days this year that the Treasury Department releases its semiannual exchange rate report. This is the document in which our government has the opportunity to assign the label of “currency manipulator” to a foreign country.

Designating another government a deliberate trade cheat is a serious charge. Doing so would be the first step in formal action by Washington to addressing the problem, as it would initiate formal negotiations on the issue of currency between the accused government and our own. And if those talks broke down, it would allow our government to seek redress through direct sanctions.

But if you’re an entrenched interest that finds the idea of Treasury applying the currency manipulator label a little worrisome, don’t worry: At the Obama administration’s Treasury Department, they’re cautious. So cautious, in fact, that they’ve let one of the world’s most egregious trade cheats — the Chinese government — slide despite eight opportunities do something about it since the start of the president’s first term.

Currency manipulation is pretty simple: A country keeps the value of its currency deliberately low versus the U.S. dollar. This makes the country’s exports artificially cheap when entering the U.S. market while simultaneously acting as a tax on U.S. exports entering their market.

China does this.

And who is China’s biggest trading partner? You guessed it: The United States of America.

Last year, trade in goods between China and the United States totaled more than $536 billion. But it is unequal trade; we bought $315 billion in 2012 more than we sold to the Chinese, which makes for the largest trade deficit between two nations in recorded history. We’re already on pace to surpass that total in 2013. (more…)

In this “Jobs Election,” voters deserve to know the truth about the U.S. auto industry. The Obama Administration’s auto rescue preserved hundreds of thousands of middle-class jobs in America, and didn’t send Jeep jobs to China. Otherwise, I’d be among the first to call them on it.

It’s bad enough that Mitt Romney’s paid advertisements aren’t telling the truth about the auto rescue. Even worse is what his own policies could mean for keeping auto jobs in America.

Mitt Romney might not have actually written the words “Let Detroit Go Bankrupt,” but his statements against the auto rescue could have set the stage for “Let China Own Detroit.” There’s a very real chance that under Mitt Romney’s plan for the American auto industry in 2009, GM and Chrysler could have been bought by the Chinese — before or after liquidation. Heavily subsidized firms in China were among the most active players in asset acquisition and capital markets at that time; few others had the cash. When given the opportunity, Chinese firms did buy Volvo and wanted to buy GM’s Hummer before the deal fell apart in 2010.

President Obama, in addition to the auto rescue, has taken several important steps to keep auto and supply chain jobs in America. He battled a surge of Chinese tire imports in 2009, which Romney opposed. In September, the President launched a World Trade Organization case against unfair trade practices in China’s auto and auto parts sectors, which Romney mocked but otherwise ignored. Yes, Mitt Romney has pledged to crack down on China’s currency manipulation — a move I welcome — but the positions he has taken on real-world attempts to create a level playing field for American workers and businesses have fallen woefully short.

While China won’t be shipping cars to the U.S. in large quantities any time soon, the facts in the auto parts sector are quite different. China’s market penetration in the United States has increased by 25 percent each of the past two years. Our annual auto parts trade deficit with China is now over $10 billion. We can’t afford to let China’s cheating disrupt the stunning recovery underway in America’s auto sector.

American brands are popular in China. But only 150,000 of the 18 million autos sold in China last year were made in America. That’s because the Chinese government has a policy: “If you want to sell it here, you must make it here.” It’s one of the reasons why Jeep has plans to manufacture in China. And, it’s why President Obama has launched a trade case against China on these auto restrictions. Like me, he’d rather see Jeeps stamped “Made in America” and shipped to China. (more…)

The devastation caused by Hurricane Sandy and the ongoing recovery efforts stand as a stark reminder that America’s critical infrastructure – our electric grid, transportation systems, nuclear power plants, water infrastructure and treatment plants, and petroleum pipelines – as well as key population centers, remain inherently vulnerable.

While we cannot predict when weather-related, man-made, or other events will occur, we can certainly take steps to prepare for them in advance. Critical to this preparation is a robust, diverse, and resilient domestic manufacturing sector.

In the coming days, impacted states, cities, and towns will struggle to recover and rebuild from Hurricane Sandy. Central to the rebuilding effort will be America’s manufacturing sector – providing glass, cement, steel, iron, and a range of manufactured products, like drywall, heating and cooling units, and electrical components.

The Alliance for American Manufacturing (AAM) recently asked two respected experts on homeland security and preparedness – Governor Tom Ridge and Col. Robert B. Stephan – to examine the direct nexus between a strong domestic manufacturing sector and America’s ability to prevent, mitigate, recover from, and rebuild quickly in the wake of catastrophic events. (more…)

American manufacturing is like apple pie to American voters: we love it and want more of it regardless of our politics, race, gender, income, or hometown. If you live in a swing state like Ohio, you already know that, because both presidential candidates have flooded the airwaves with ads labeling the other guy as the “outsourcer-in-chief.”

Beneath the recent accusations and counter-accusations on outsourcing, there is a simple truth: citizens believe manufacturing is central to our nation’s economic health, that America is in economic decline, that outsourcing to China is largely responsible for this condition, and they want their elected leaders to do something bold about it.

Voters of all political stripes are far ahead of the debate inside Washington, D.C. More importantly, perhaps, is that nearly all Americans — not only working-class Ohioans — share this view.

So don’t be surprised if both campaigns escalate the rhetoric and attacks on shipping jobs overseas in the coming weeks, in part to mask their own shortcomings.

That’s because no one is a knight in shining Made in America armor when it comes to this issue. Mitt Romney (rightly) criticizes President Obama for not labeling China as a currency manipulator, but glosses over the fact that Republican leaders in Congress are blocking a bipartisan currency bill that would pass overwhelmingly. Romney has also been on the wrong side of Administration decisions to defend American tire workers against China’s cheating and successfully rescue Chrysler and General Motors.

The GOP hypocritically accuses Obama of sending stimulus dollars overseas, while Republican Senators tried to block Buy America requirements for stimulus spending.

The fact is, accusing your political opponent of shipping jobs overseas is now an established American campaign tradition. What is missing is an honest debate about what could actually be done to promote American manufacturing jobs. Voters are ready for such a dialogue.

Public opinion research conducted for the Alliance for American Manufacturing (AAM) by the bipartisan team of the Mellman Group and North Star Opinion Research concluded that voters overwhelmingly embrace a bold, popular, and effective agenda for growing American manufacturing jobs. Now we just need Washington to listen.

A strikingly large percentage of Americans (56 percent) believe our nation is no longer the world’s strongest economy. Americans believe that we should be number one, and understand that manufacturing is the most important part of our economy. But, less than a quarter of voters believe anyone in Washington is doing a great deal to defend American manufacturing against cheating on trade or to create new manufacturing jobs. (more…)

Christina D. Romer, the former chairwoman of President Obama’s Council of Economic Advisers, took U.S. manufacturing to task recently in a New York Times op-ed.  Headlined “Do Manufacturers Need Special Treatment?” Romer suggests that support for manufacturing needs to “go beyond the feeling that it’s better to produce ‘real things’ than services.”
She’s asking the wrong question. Manufacturers don’t need special treatment. But what they do require is a level playing field.

Romer is taking the academic view of manufacturing, and that’s a problem.  In the comfortable confines of a dusty textbook, her views may be fine.  But in a cutthroat real world filled with competition, cheating, and harsh mercantilism, the textbook view is very limiting.  Unfortunately, Romer sides with the safe, mathematical view, which means she’s added her name to the long list of economists who just don’t “get it.”

Case in point: Romer uses arcane jargon like “market failures… efficiency grounds… positive externalities” to justify her view that there is something wrong with manufacturing.  In her op-ed she explains that service work is just as important as manufacturing: “American consumers value health care and haircuts as much as washing machines and hair dryers. And our earnings from exporting architectural plans for a building in Shanghai are as real as those from exporting cars to Canada.”
Really, the bottom line is jobs.  Extolling the virtues of a hair salon misses a fundamental point.  Manufacturing supports more jobs, and pays better, than the service industry.  And those architectural plans being “exported” — how many jobs do they support, and what’s to prevent that architectural work from being outsourced as well?

Romer makes three arguments against manufacturing.  First, she says that “Government intervention can be justified on efficiency grounds if the free market won’t work well.”  But U.S. manufacturing advocates aren’t asking for a handout.  Instead, they’re saying that we don’t have a free market at work.  In reality, we have market failure.  There simply isn’t a free market when countries like China violate world trade laws and act in a protectionist manner.

I admire Romer’s intellect, but I am shocked that she doesn’t see this evidence of a market failure.  Our trade deficit in manufactured goods, which has quadrupled since 1998, isn’t a market failure? (Theory suggests that our trade balance should be trending toward equilibrium.) The fact that, on paper, U.S. steel and semiconductor production is far more efficient than Chinese production, but our market share is declining, isn’t a market failure? The fact that productivity of U.S. manufacturing workers has gone up while wages have not isn’t a market failure? And, the fact that dollars invested in the American economy by venture capital are producing diminishing employment returns, as Andy Grove has noted, isn’t some sort of a market failure? Only if you haven’t been looking.

Let’s consider why we need government policy in manufacturing in the first place. I borrow this from Jared Bernstein of the Center for Budget and Policy Priorities, and formerly the vice president’s economic advisor. Bernstein says that manufacturers face barriers to entry, expansion, and innovation that no single, private firm can solve.  For example:

Research Barriers: R&D can be prohibitively expensive, and hard to capture profits (e.g., advanced batteries); (more…)

Though we’ve long been frustrated by the fact that the federal government spends taxpayer dollars on foreign-made goods, we found one recent example of this practice particularly infuriating.

During last year’s 10th anniversary of the September 11 terrorist attacks, the Transportation Security Administration (TSA) purchased 70,000 commemorative bracelets for their workers. Unfortunately, these bracelets, which were intended to honor lives lost here in America, were made in China.

The 9/11 bracelets are just the tip of the iceberg.  Due to glaring loopholes in existing Buy America legislation, federal agencies have spent billions on foreign goods and services, including $500 billion in the past five years alone.

This is unacceptable. Luckily, a bill was recently introduced in Congress that is a step in the right direction: The Invest in American Jobs Act (H.R. 3533).  It will help ensure that taxpayer dollars are used to buy American-made goods for federally funded highway projects by giving preference to American-made steel, iron and other materials.  Click HERE to tell your member of Congress to support the Invest in American Jobs Act.

Tell your representative that it’s time to stop outsourcing federal purchases, and to focus on creating American jobs. Urge them to co-sponsor the Invest in American Jobs Act, a great first step toward keeping federal purchases American-made.

Together We Can Keep it Made in America.

Here’s a random point of discussion for the day… Take a look at the photo in this blog post. It’s a manhole cover on 9th Street in New York City, near 1st Avenue.

[Coincidentally, it is located right near the New York office of the Alliance for American Manufacturing (AAM).]

Here’s the question: Why wasn’t this manhole cover made in the U.S.? Why was New York City taxpayer money used to buy a foreign manhole cover instead of an American-made one?

Let’s hypothesize that the City of New York chose to purchase from India due to lower cost. Ie: The manhole covers imported from India were X percent cheaper for Y quantity.

QUESTION: Is there anything wrong with NYC going with the lower-cost option?

Well, actually, let’s find out WHY the Indian version was cheaper. Why might India be able to underbid its U.S. counterparts? (more…)

If you want to field a good baseball team, you don’t just show up on opening day and say “Let’s play.”  No, you carefully plan your team.  You make sure to get the best pitchers (“pitching, pitching, pitching,” as they say).  And you make sure your sluggers take a lot of batting practice.  In short you work at it and you plan.

The same fundamental idea applies to building a nation’s manufacturing sector.  With global competition so aggressive, it’s not enough to simply hope that other countries will buy your exports.  You have to make a concerted effort to build up your factories and then give them the tools to succeed.

Take Germany, for example. The German workforce continues to be well-paid and highly unionized while the country enjoys the position of being a manufacturing juggernaut.  The secret?  Thriving labor conditions are combined with smartly targeted niche production, industrial specialization, and deliberately localized financing.

Simply put, Germany has identified and implemented the key steps it needs to field a home run-hitting industrial sector.

However, almost every industrialized nation has adopted similar tactics.  Common sense tells us that manufacturing generates value-added income.  It produces wealth and supports good-paying jobs.  Why shouldn’t these countries do what it takes to win?

Sadly, the United States is the one major country without any semblance of a manufacturing strategy.  The U.S. has no concerted plan to address predatory trade from other countries or to focus investment on new areas of technology.  The Alliance for American Manufacturing (AAM) has repeatedly offered a key plan for U.S. manufacturing, one that would pull together efforts in these key areas.

The latest country intent on bypassing the U.S. on the road to industrial success is India.  As Adrienne Selko reports in IndustryWeek, the Government of India is ramping up its factories: (more…)

Excellent debate on CNBC featuring the Alliance for American Manufacturing’s Scott Paul about the currency manipulation bill.

Last Thursday, President Obama suggested that voters give Congress an earful on the horrible state of the economy. He was right to do that. There is plenty that Congress can do to spur private sector job creation that would not swell our federal budget deficit.

Taken together, these steps would provide a significant boost to the productive sector of the American economy. Creating one manufacturing job will support four or five other jobs in the economy, which is why it makes sense to adopt a coordinated manufacturing policy which would include the following steps:

• Establish a national infrastructure bank to leverage capital for large-scale transportation and energy projects.

• Reshape the tax code in a revenue neutral way to provide incentives for job creation and inward investment. (more…)