In yet one more instance of tainted Chinese products, the New York Times reported today that many pharmaceutical ingredients exported from China are often made by chemical companies that are neither certified nor inspected by Chinese drug regulators.  With few regulations and little oversight, Chinese companies are shipping adulterated and counterfeit ingredients that end up in both developing countries and for sale on the Internet.

The increase in defective Chinese medicines comes on the heels of products recalls for defective and unsafe Chinese pet foods, tires, steel, and other consumer goods.  Companies have found China to be a profitable manufacturing platform due to low labor costs and a lack of workplace and environmental regulations.  Unfortunately, this quest for cheaper production has led to corner-cutting and the use of substandard and unsafe components.

The unfortunate irony is that, as more Americans lose good-paying manufacturing jobs due to predatory trade from China, they can not afford quality healthcare.  Their one option may be to purchase medications online—medications produced cheaply but improperly in China. 

It’s a flawed cycle, and one that AAM will continue to look at in the coming days.  In the next few weeks, we’ll be reporting in greater depth about the overall safety picture for imports from China.  Our findings should raise more concerns.

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Finally, a reporter who gets the problem. 

On MSNBC.com today, reporter Tom Curry notes that trade and manufacturing issues should rank high in tonight’s Democratic presidential debate in Philadelphia.  As AAM’s Scott Paul pointed out on the Huffington Post yesterday, manufacturing is key to sustaining a thriving middle class.  And without a healthy manufacturing sector, the U.S. will lose competitiveness in the 21st Century.

In the MSNBC piece entitled, ‘For Edwards, it’s déjà vu all over again on trade,’ Curry notes that in 2000, then-Senator John Edwards voted to support Most Favored Nation Trade status.  But on the campaign trail in 2007, Edwards has lamented “trade deals that cost Americans millions of jobs” while yielding imports of “[m]illions of dangerous Chinese toys.”

Curry specifically asked Edwards if he now regrets his vote for China in 2000, which prompted Edwards to note that “America’s trade policy as a whole is why workers are suffering.”

The forthright questioning by Curry is impressive because it specifically asks candidates to take a stand on how they’ll move forward regarding U.S. manufacturing.  AAM is doing the same thing with its national campaign of Town Hall meetings—pressing voters to demand better answers from their candidates on questions like “How will you hold countries like China accountable when they cheat at international trade?”

These are the issues of key importance, and they should be sounded loudly at each debate.  We’ll be watching to see what the candidates say tonight.

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The Wall Street Journal reported today that European steel producers will press the EU to apply tariffs on Chinese steel in response to continued dumping.  Ongoing, large quantities of Chinese steel exports have become a major problem for European producers whose costs are growing along with a rising Euro.  Further compounding their problems are China’s continued subsidization of its domestic steel production, currently estimated at $52 billion over the past five years.

While free trade has been the lynchpin of both European Union and U.S. trade policy in recent years, it would seem that there is a growing sense of “enough is enough”—at least among the Europeans.  EU Trade Commissioner Peter Mandelson has cautioned China that its “current level of steel production is unsustainable.”  And Beijing has recognized, in the face of European concerns, that its steel exports may need to be curtailed.

The point is simply that both the EU and the U.S. are facing dumping and illegally subsidized competition from China.  If the Europeans are ready to take action, the U.S. should be as well. 

It’ll be interesting to hear what our Presidential candidates have to say on the issue.  Along those lines, AAM’s Scott Paul has published an interesting piece on today’s Huffington Post that takes a look at the upcoming Democratic Presidential debate in Philadelphia.

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The Salt Lake Tribune has released a disturbing report on labor conditions in Chinese factories.  Author Loretta Tofani spent a year researching firsthand the hazardous and unsafe conditions that factory workers in China face.

While China has, on face value, agreed to adhere to workplace safety codes, in practice this rarely happens.  As Tafani notes in her report, “Economic growth has been a more important goal to China than worker safety.”

Lack of health and environmental standards are two of the reasons why China is able to produce goods so cheaply.  The real cost, unfortunately, comes in the broken lives of its workers.
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Though people might find it surprising, manufacturing is a key part of the economy even in such unlikely places as Los Angeles.  And, thanks to manufacturing’s long arms, many local businesses depend on it.

While many Californians might be surprised to learn about manufacturing’s important role in the California economy, we know of one L.A. area resident who definitely “gets” this issue.  That would be Mr. John Ratzenberger, the host of AAM’s “Keep it Made in America” Town Hall meetings.

A story in today’s Los Angeles Times notes that southern California is home to many thriving manufacturing concerns and, in fact, the 808,000 factory workers it employs comprise 11% of the region’s workforce. 

The story focused on a manufacturer of spas and hot tubs that employs 600 people—which happens to qualify the company as a “large manufacturer.”  So, while people may think of Hollywood when they picture L.A., the sprawling metropolitan area moonlights as a thriving industrial region.

It’s important to remember that manufacturing has been, and continues to be, a key employer throughout the United States.  Manufacturing jobs consistently pay well, offering higher wages than service industry work.  A recent study in Oregon noted that the average manufacturing job pays roughly $50,000—$10,000 more than the overall average for all industries.

Manufacturing consistently boosts local economies, too, with what is called a multiplier effect—the spillover of wages and taxes paid into surrounding businesses.  It’s estimated that every 100 manufacturing jobs create between 400 and 500 jobs in the rest of the economy.

And so, the aforementioned 600-employee hot tub factory outside of Los Angeles is helping to employ somewhere between 2,400 and 3,000 other Los Angeles residents.

No other sector of the economy has proven to be such a remarkable driver of employment growth—all the more reason why the U.S. needs to retain a strong manufacturing base in the 21st Century.

PS: the word on our upcoming Town Hall meeting in Columbus, OH is already spreading throughout the state.

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John McCain made a campaign swing through New Hampshire yesterday, stopping at Smith and Wesson’s Thompson Center Arms factory.  He shook hands with various employees and praised their firearms product. 

Despite McCain’s friendly visit, however, ManufactureThis wonders if the Arizona Senator, or any of his Republican and Democratic presidential rivals, supports policies to ensure that these guns (and butter, for that matter) will continue to be made in America.

As the Iraq War has marched onward, a growing shortage of ammunition has forced the U.S. to import greater quantities of ammo.

But it’s not just imported ammunition that is replacing American-made product.  In 2006, Winchester Firearms announced the closure of its landmark New Haven, CT plant.  The license for production of Winchester rifles was subsequently sold to a Utah-based firm that may continue to manufacture Winchester rifles in Portugal or Russia.

It’s becoming a familiar pattern—unchecked violations of trade laws by our overseas competitors are taking a toll on domestic production.  The subject that ManufactureThis wants Senator McCain and his colleagues to discuss is the future of U.S. manufacturing.  We’d like to ask them, “What is your plan to address, for example, China’s cheating on currency, or rising health care and energy costs?”

There are a number of factors involved in whether U.S. businesses and workers have the same opportunity to compete as their overseas competitors.  In fact, this discussion will be the focus of AAM’s Nov. 8 Town Hall meeting in Columbus, Ohio.  Keep checking ManufactureThis for more info. 

The Columbus event is already engaging Ohio’s political blog community, by the way.  You can read some discussion on it here.

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ManufactureThis has been giving voters a chance to sound off on the job and manufacturing issues of greatest concern to them.  We’ve also invited people to ask questions of John Ratzenberger at our upcoming Town Hall meetings.  You can email John at AskJohn@aamfg.org

Today’s blog entry was submitted by Stephen Schoonmaker, a mechanical engineer in Chambersburg, Pennsylvania.  Stephen is greatly concerned about China’s ongoing currency manipulation which he sees as running counter to the free market philosophy that informs free trade: 

From: Stephen J. Schoonmaker, Chambersburg, PA

“How about China?  Isn’t it great how they have embraced free enterprise!  Every single politician in our land says we need to have everything at WalMart say Made in China since we are letting the MARKET-FORCES decide everything.  Does “pegging” your currency sound like free enterprise? 

“It turns out the Chinese government is even better at the rigged game than Japan.  The Chinese lend vast sums of money to America (by buying US Treasury Bills they know they will never get money for); this keeps their currency from rising; it also floats our deficit spending.  Now since Wall Street has already declared that China is the real tech-manufacturing power of the future, I am forced to teach China all our remaining secrets (something I personally have been told to do). 

“When our remaining factories close (as they will), then we can humbly bow before the Communists and hope they’ll be nice in places like Burma, North Korea, Hong Kong, or Tibet (and soon Taiwan).  Just imagine what would have happened to a US factory if high levels of lead had even been rumored on the toys that used to be made in East Aurora, New York, or Minnetonka, Minnesota, or Pawtucket, Rhode Island?  Is handing out Most-Buddy-Buddy-Nation status really the same as the healthy competition we used to have in aerospace which resulted in our being the premier superpower?

“I want desperately to develop safe, clean, beneficial, and valuable products that can be made by people in a safe manner so that the people that own my company can make a reasonable profit.  Why must I instead face ridiculously unfair and dangerous competitors while getting no support at all from the people we elect to make our country a place you can be proud of?  I guess I should just be calm and trust the professors that write all the books about MARKET-FORCES.”

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Once again, the European Union (EU) demonstrates that it is willing to go to bat for its manufacturers and workers when it comes to countering China’s unfair trade practices.  It’s embarrassing that our own government won’t do the same. 

Yesterday, EU trade commissioner Peter Mandelson took umbrage with China’s growing trade surplus, saying “I am looking for China to do more to remedy the imbalances that exist.”  Mandelson told Reuters that the EU-Beijing relationship “is already a large one and it is potentially a huge one.”  But the lopsided trade balance means that China needs to “get it right” regarding their intervention in financial markets.

The EU has traditionally been more easygoing in its dealings with China. But the EU86 billion deficit they’ve accrued with China this year has pushed their Worry button.  As Mandelson explained, “It’s a question of China exercising greater responsibility and being more conscientious in shouldering their fair share of the demands of this trading relationship.”

Congress and the Administration shouldn’t have to take guidance from the EU on holding China accountable for its unfair and illegal trade practices.  They should both act now, before more manufacturing jobs disappear.

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As AAM gears up for Town Hall meetings in Ohio and Pittsburgh, we thought we’d take a look at our event in Des Moines, Iowa last week.  By the way, before John Ratzenberger hosted the Town Hall meeting, he visited the Des Moines Bridgestone/Firestone plant.

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Regardless of your opinion on immigration and the border fence, this one is guaranteed to raise your blood pressure…  Apparently, the Department of Homeland Security (DHS) is using Chinese-made steel poles in the construction of a security fence on the southern U.S. border.

Congressmen from both parties have lodged strong protest against the use of taxpayer funds to purchase this Chinese steel.  Rep. Jason Altmire, a Pennsylvania Democrat and member of the Congressional Steel Caucus, called the purchase of Chinese steel “outrageous,” and California Republican Duncan Hunter noted that U.S. pipe makers could “easily” provide the steel needed for fence construction. 

It’s very unfortunate that a U.S. government agency would accept cheap, illegally subsidized bids from a competing country over the bids of the nation’s own steel producers—the very workers and producers who are paying for the steel in the first place.  U.S. tax dollars should not subsidize Chinese jobs. 

One might even go a step further and question whether the Chinese-supplied steel meets the requisite safety and structural integrity requirements that are expected of American-made steel.  As ABC News revealed in August, some shipments of Chinese-made commercial steel have been coated with cheap, lead-based paint—a practice that U.S. producers would strictly avoid.

The sort of brain-dead mentality that would enable DHS to accept Chinese steel is symptomatic of the disregard our government has for U.S. manufacturing jobs.  As AAM keeps saying in our Town Hall meetings, voters need to demand more from their candidates and ask what they’ll do to strengthen U.S. manufacturing.
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