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Steven Capozzola

By Steven Capozzola
Media Director, Alliance for American Manufacturing

Bill Lambrecht at the St. Louis Post Dispatch has written an excellent article documenting some of the unexpected problems U.S. manufacturers are facing from illegally dumped imports from China.

Lambrecht relates the story of Missouri’s Mid Continent Nail.  The Poplar Bluff, MO-based company was relieved when a 2008 case with the U.S. International Trade Commission (ITC) found that Chinese companies were dumping low-cost nails into the U.S. in an effort to undercut the pricing of U.S. manufacturers.  The ITC determined that these ”dumped” nails broke laws guarding against unfair trade.

Following the ITC ruling, the Commerce Department imposed duties on certain nail imports, which should have helped Mid Continent and other U.S. manufacturers of nails for home and industrial use.

Unfortunately, Mid Continent never saw the hoped-for gain in sales.  Instead, underpriced Chinese nails kept coming into the U.S. market. (more…)

Steven Capozzola

By Steven Capozzola
Media Director, Alliance for American Manufacturing

Hey everyone: QUICK TRIVIA QUESTION: Where are iPads and iPhones manufactured?…

Need we even tell you the answer? Aren’t all of you quite obviously aware that these omnipresent, hi-tech gizmos are “Made in China?”

Brace yourself: In an interview on ABC This Week, Sen. John McCain, R-Ariz., stated that iPads and iPhones are manufactured in the United States.

Apparently, McCain was trying to make the point that the U.S. makes cool hi-tech goods and just needs free trade agreements to gain more overseas market access.

Unfortunately, the good Senator is wrong on several counts:

1. In addition to iPads and iPhones, China manufactures a tremendous amount of hi-tech equipment.  Those products are NOT made in USA. (more…)

Steven Capozzola

By Steven Capozzola
Media Director, Alliance for American Manufacturing

Readers of ManufactureThis are well aware that ABC World News has been running segments this week about the importance of buying American-made products.  In addition to their reality-TV-style experiment of refurbishing a suburban Dallas home with only Made-in-USA goods, news anchor Diane Sawyer pointed out that if every American spent an extra $64 a year on buying American-made goods, it could create 200,000 new jobs in the U.S.

All this makes good sense to us.  However, Dan Ikenson at the Cato Institute views it as “dangerous, nationalistic propaganda.” Ikenson says this is “reckless” and that U.S. manufacturing “continues to thrive in every metric…except employment.”  He attributes manufacturing’s success to increased productivity– and that “making more with less is the goal! That’s how an economy grows!”

Needless to say, we profoundly disagree with Ikenson on his conclusion that all is peachy with U.S. manufacturing and the American economy.  What we really want to do is call him up and give him a piece of our mind.  We imagine a phone call that might go something like this…

ME: Hi Dan, it’s Steven Capozzola at AAM.  Listen, your viewpoint is just backward.  You guys are the ones who’ve gotten us into this mess.

IKENSON: Free trade works.  Our productivity is better than it’s ever been.  Per capita income is so much greater than it was in 1960, when we hardly imported anything.  Household goods cost less than ever.  People can buy whatever they want. (more…)

Scott N. Paul

By Scott Paul
Executive Director of Alliance for American Manufacturing (AAM)

There is no swifter way to alienate working class voters than to name an outsourcing CEO to lead your jobs strategy. Yet that’s exactly what President Obama is doing.

General Electric CEO Jeffrey Immelt has fooled the media and the White House into believing that he cares about American manufacturing jobs. I have a hard time imagining a worse pick, unless Obama would have tapped Immelt’s predecessor Jack Welch, who seemed fine with the idea of putting factories on barges in search of the lowest wages in the world.

Let’s look at GE’s jobs record. You would have difficulty finding a company that has outsourced more jobs and closed more American factories than GE. While they have slashed their American workforce to fewer than 150,000, GE has dramatically expanded its global presence, now employing over 300,000 workers worldwide. Yes, GE has brought a trickle of jobs back to the U.S. over the past two years, but it still outsources more than it insources. And those executives at GE are not clueless–they realize the value of good publicity as it announces new hires at a time like this. But they do not devote nearly the same amount of publicity to their factory closings. (more…)

Scott N. Paul

By Scott Paul
Executive Director of Alliance for American Manufacturing (AAM)

With Chinese President Hu Jintao’s state visit, it is a good time to reflect on how the dysfunctional U.S.-China relationship has developed, and to consider why it may be time for a trial separation. For nearly 40 years, the U.S. and China seem to have modeled their partnership on Sid and Nancy.

President Nixon opened relations with China as a strategic move during the Cold War. What he opened, in fact, was a can of worms, as China now possesses stealth fighters, satellite-destroying missiles, and economic clout that put the Soviets to shame.

But Nixon was not the last President to make miscalculations with regard to China. The tepid, brief response of President George H.W. Bush to the Tiananmen Square massacre meant the Chinese regime suffered only minimal consequences for its brutality. President Bill Clinton’s change of heart on linking Most Favored Nation trading status with China to its human rights record gave China a blank check throughout the 1990s.

Moreover, in what some historians may mark as one of the most serious blunders of the post-World War II era, President Clinton’s team negotiated an exceptionally weak deal when China entered the World Trade Organization. The U.S. agreed to lower tariffs on Chinese products, end its annual trade-linked review of China’s human rights record, and diminish many of trade enforcement options. In effect, the deal tied America’s hands even as China’s economic power — and mercantilism — expanded. (more…)

Scott N. Paul

By Scott Paul
Executive Director of Alliance for American Manufacturing (AAM)

President Obama delivered just the right speech in Tucson. Can he replicate that performance for his State of the Union address on Jan. 25? For the sake of our nation’s economic well-being, he must.

Just as our national psyche needed some healing this week, our nation’s hopes and dreams urgently need a boost on Jan. 25. Each day that has passed since our economy hit rock bottom gives us a bit more confidence. At the same time, some startling deficiencies in our economy have surfaced: anemic job creation, a hollowed-out productive base, stagnant wages, and persistent global imbalances.

Americans have not felt this insecure about their economic future since the Great Depression. This generation believes the next generation may be doomed to a lower standard of living with fewer opportunities to climb the economic ladder. The rise of China has made Americans deeply uncomfortable, yet the public sees very little attention to this concern in Washington. Instead, they receive lectures with platitudes about “American Exceptionalism,” the idea that we will always lead simply because we are, in a word, America. (more…)

Scott N. Paul

By Scott Paul
Executive Director of Alliance for American Manufacturing (AAM)

Too many American are unemployed. But Congress is not likely to act in any meaningful way to boost the economy. The Federal Reserve is trying quantitative easing, but that may not be a panacea.

That’s why it is time to take matters into your own hands…and your wallets. This holiday shopping season: Buy American. It’s your own personal stimulus plan for our economy.

Buying American is easier than you might think. Localization is in. And, products from golf balls to pool noodles are still made in America. There are plenty of domestically manufactured toys, clothes, and sporting goods to satisfy even the most discriminating of shoppers. American-made goods offer a proven safety record, compared to the frequent incidents of tainted products imported from China.

Before you buy those holiday gifts, look at the label and consider the options. We have dozens of gift ideas on our ManufactureThis blog, and we’ll be offering new options for you to consider every day.

When you buy an American-made toy, you’re not only helping to employ a U.S. factory worker, but you’re also choosing a safe option. There are many, many instances of toxic and lead-painted goods from China. Our children’s health isn’t worth the risk. (more…)

Scott N. Paul

By Scott Paul
Executive Director, Alliance for American Manufacturing

All praise from here for President Obama’s courageous decision Friday to proceed with an investigation of China’s opportunistic and illegal trade practices in the clean energy sector. Those of us dedicated to supporting U.S. workers, U.S. jobs and U.S. manufacturing owe him an enormous debt of gratitude.

The Administration deserves a tremendous amount of credit for considering this case on its merits, rather than letting some overarching philosophy dictate the outcome. Demonstrating a willingness to challenge China’s cheating could make a huge difference for American workers and businesses in the clean energy manufacturing sector. And if the Administration’s efforts with China are successful, the ultimate result will be more American jobs.

Friday’s decision, announced by United States Trade Representative Ron Kirk, was in response to a United Steelworkers (USW) Section 301 unfair trade complaint against China. In his announcement, Kirk said, “We take the USW’s claims very seriously, and we are vigorously investigating them.” He said his office would use the next 90 days – the time period called for under World Trade Organization (WTO) laws – to investigate the practices detailed in the USW petition.

The Steelworkers – one of our stakeholders – stepped up to the plate while many others have been reluctant to do so in the face of Chinese pressure. Here was the union’s reaction Friday.

This week’s trade numbers sure helped drive home the fact of the absurdity of our trading relationship with China: a record-breaking $28 billion trade deficit with China driving a total August deficit of $46.3 billion.

China did not get to this superior position by playing on a level playing field, and the USW’s petition, a 5,800 page report, details the more than 80 Chinese laws, regulations and practices that are designed to crush clean energy manufacturing and other green technology in the U.S. As the August numbers help show, China’s plan is working. China has set prices to undercut the U.S. and other competitors, set discriminatory technology laws and regulations, demanded that foreign companies transfer valuable technology, and has provided massive subsidies to Chinese companies, causing serious damage to U.S. interests. (more…)

Scott N. Paul

By Scott Paul
Executive Director of Alliance for American Manufacturing (AAM)

The House of Representatives has passed a bill aimed at curbing China’s ongoing currency manipulation. Some critics argue that this legislation to address China’s continued undervaluation would be “protectionist,” but this makes no sense. If someone cheats in a game, you call them on it. You demand that they play by the same rules.

Global trade should be no different. And with the U.S. continually racking up $200+ billion annual trade deficits with China, and losing millions of jobs along the wayt, action must be taken.

With that said, let’s look at five key reasons why penalizing China for its cheating makes sense:

1. What would Ronald Reagan do? He would have said to the Chinese: appreciate the Yuan, stop the subsidies, or lose access to our market. Period. The current bill, H.R.2378, is mild compared to what President Reagan would have done. And it’s because the Chinese are distorting the free market, not honoring it. It’s always taken American leadership to right this wrong. Really the only times we’ve seen stability in manufacturing employment AND a balanced current account were immediately after the U.S. compelled revaluations (Nixon in 1971, Reagan in 1985-1987). (more…)

Scott N. Paul

By Scott Paul
Executive Director, Alliance for American Manufacturing

What a difference a week makes. Just last week, the Beijing government and outsourcers thought they could run out the clock and avoid a long overdue legislative reckoning on China’s currency manipulation, which serves as a drag on global growth, a siphon for American jobs and wealth, and an inflator of dangerous imbalances in the world economy.

But following a rapid succession of events this week, Congressional action on China’s cheating looks increasingly likely. The chances for passage of a bipartisan bill in Congress that would deter China from manipulating its currency have improved dramatically.

Let’s review the week’s developments:

H.R. 2378, the Tim Ryan (D-OH)-Tim Murphy (R-PA) bill on currency, gained 16 new cosponsors, including key members of the Ways and Means Committee. Meanwhile, about 100 Members of Congress–including more than 30 Republicans–urged the Speaker to schedule the bill for a vote.

In testimony before House and Senate committees on Thursday, Treasury Secretary Timothy Geithner took a much harder line on China than he had just three months ago.

House Speaker Nancy Pelosi told CNBC’s John Harwood that she supported bringing legislation to the floor, provided that it is compliant with global trade rules. (Testimony given at a hearing on Wednesday left little doubt that the legislation is, in fact, on solid legal ground.)

The Economic Policy Institute estimated that ending China’s currency manipulation could add as much 1.4 percent to economic growth in the U.S., based on calculations made by Nobel laureate Paul Krugman. That would lead to $500 billion in additional revenue–or deficit reduction.

Even the Chinese government got into the act, raising the value of its currency, the Yuan, to a new high against the dollar, definitively proving that it (a) manipulates the exchange rate, and (b) responds to political pressure from the U.S.

So what will next week bring? Predictions of trade wars, arguments for inaction or quiet diplomacy, and ridiculous defenses of Beijing’s mercantilism. We’ll look forward to tackling those myths one day at a time. Stay tuned.

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Prior to forming the Alliance for American Manufacturing (AAM), Scott Paul was the principal lobbyist for the Industrial Union Council and was a trade lobbyist at the AFL-CIO, where he led the labor movement’s legislative initiatives on international trade, manufacturing, and foreign policy issues. Mr. Paul’s Capitol Hill experience extends from 1987, when he held an internship with Senator Richard G. Lugar (R-IN), to 2001, and when he served as the chief foreign policy and trade advisor to then-House Democratic Whip David E. Bonior (D-MI). He also served on the staff of the late Rep. Jim Jontz (D-IN) and former Rep. Peter Barca (D-WI).

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This piece was first published on The Huffington Post.

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Follow Scott Paul on Twitter: www.twitter.com/ScottPaulAAM