A few weeks ago, ManufactureThis reported on growing European disenchantment with China’s intransigence on currency issues.  EU Trade Commissioner Peter Mandelson was urging China to do more to “remedy” the currency “imbalances that exist.”

Now, it seems that Japan is getting in on the act.  According to the Wall Street Journal’s Michael Phillips, Japanese Finance Minister Fukushiro Nukaga is pressing Beijing for the “fastest possible” appreciation of its currency, the Yuan.

It’s no secret that China manipulates its currency in order to benefit its exporters.  And it happens that currency manipulation is illegal under existing WTO law.

But China continues this blatant currency manipulation, and U.S. manufacturers continue to bear the brunt of such deliberate mercantilism. 

Next week, Treasury Secretary Paulson travels to Beijing to discuss issues of “mutual interest” with his Chinese counterparts at the latest ‘Strategic Economic Dialogue.’  One would think that Secretary Paulson would bark quite loudly about currency issues when he lands.  But at present, the Treasury Department’s semi-annual report on foreign currency activity is two months overdue to the Senate Banking Committee.  If Mr. Paulson seems to be in little hurry to report China’s bad behavior to the U.S. Congress, it’s doubtful he’ll make much fuss when he rolls into dragon country.

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According to new data released yesterday by the U.S. Department of Labor’s Bureau of Labor Statistics, employment in U.S. manufacturing is projected to decline by 1.5 million jobs from 2006 to 2016.  In the same period of time, employment in goods-producing industries is expected to decrease from 14.9% to 13.1% of total U.S. employment.

This projected decline in American manufacturing employment, while not surprising, is extremely disheartening.  Manufacturing has historically offered the best route for American workers to achieve middle class prosperity.  And these benefits extend throughout the U.S. economy since manufacturing is both a job multiplier and pays consistently higher wages than service industry work. 

  AAM’s Scott Paul discusses this key importance of manufacturing in today’s Charlotte Observer and notes that while “most industrialized nations have policies to grow domestic manufacturing, America does not.”  That’s why it’s particularly important for voters to demand action from this year’s presidential contenders to strengthen U.S. manufacturing. 

In fact, the need to enforce U.S. trade law grows ever more serious.  China is poised to knock off America’s remaining domestic automotive industry in the next few years.  In 2009, China’s cheap new passenger car, the Chery, will come ashore.  The Chery will cost less than a comparable American car, but for reasons that ought to be noted very clearly. 

As Scott Paul points out in a Huffington Post article on the subject, “Some of Chery’s major inputs–energy and metals–are heavily and illegally subsidized by the Chinese government at both the provincial and national level.”  When one factors in currency manipulation, penny-wage labor, unsafe factory conditions, and lack of environmental controls in Chinese factories, it becomes evident that while the Chery may have a lower sticker price, there are hidden, less pleasant costs to consider overall.

And it shouldn’t be outside the scope of public debate to ponder whether the Chery will actually prove safe on the road.  Given China’s recent track record of producing cheap, unsafe, tires, toys, toothpaste, and other goods, there’s no telling where their inexpensive cars fall short in personal safety.

All of this should make for a key part of the 2008 presidential campaign, and in fact, trade policy seems to be moving closer to center stage.  Just yesterday, Democratic presidential hopefuls competed with one another to talk tough on both China’s illegal currency manipulation and human rights abuses—a hopeful sign for the 2008 election.

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It’s hard to spin the Iowa race in a new way.  But America’ Number 1 newspaper, USA Today, noted something interesting yesterday.  It seems that former Arkansas governor Mike Huckabee has jumped to the lead among Republican presidential contenders.  The paper speculated that Huckabee’s folksy image and Southern values have begun to connect with Iowans exhausted by the glitz and name-calling of frontrunners Rudy Giuliani and Mitt Romney. 

Curiously, there may be another reason for Huckabee’s recent surge, and one that’s buried near the end of the USA Today article.  Huckabee is quoted as saying that he’s not necessarily familiar with Wall Street CEOs, but he’s “very much in sync with the guys who work up and down the factory line.” 

With this simple admission, Huckabee may have hit on something that the mainstream press has yet to articulate—namely that continued outsourcing of American jobs has become THE primary concern for 2008 voters.  So, while Iraq and “values” compete for lead time on Tim Russert’s cue cards, lost jobs and unsafe toys from China may actually be top-of-mind. 

  Ironically, USA Today made this case for China’s preeminence among voter worries in the very article that followed the Huckabee spotlight.  In a piece entitled ‘Recalls keep toy-drive elves busy,’ reporter Judy Keen noted that the Salvation Army and other charitable groups have been forced by recalls of Chinese goods to make significant adjustments in collecting and distributing toys for the holiday season.  Volunteers are being forced to inspect all the toys received at various collection centers, or to block questionable, Chinese-made goods outright.  It’s likely that with the Consumer Products Safety Commission’s safety recalls extending to roughly 25 million toys in circulation, quite a number of lead-tainted toys have shown up in collection drives. 

The high number of unsafe Chinese products also resonates among the very electorate who’ve seen their local factories close.  And so, a Mike Huckabee surge makes sense when see through the lens of hometown woes. 

In yesterday’s Buffalo News, columnist Doug Turner got to the heart of the matter regarding American manufactures being replaced by unsafe Chinese goods: “This shrinkage is typical of what is left of the entire American toy manufacturing community, and its employees. This is despite the Chinese dictatorship selling us toys with lead and exotic chemicals that affect the brain.” 

Turner related the story of Easy Aurora, NY’s Forsyth Industries, which has seen its annual sales plummet from a one-time high of $5 million down to $100,000 despite the fact that its American-made toys are safe and lead-free in comparison to the Chinese goods that have supplanted them. 

Turner also cited AAM senior analyst Kerri Houston, who points out that it’s not just toy production that has left the country.  According Houston, “electronic kids’ goods has gone offshore, with China getting 86 percent of that business.”

Harry Truman once said that Americans can always spot a counterfeit; sometimes it just takes them a while.  So whether it’s apathetic politicians, or tainted products, it seems that American consumers are seeing the light.

Tim Russert, are you paying attention?

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AAM has been hosting “Keep it Made in America” Town hall meetings throughout the country this fall, and it seems that with each stop on the tour, the crowds have grown larger, the media coverage more focused, and host John Ratzenberger more impassioned.  At each stop, we’ve heard from numerous voters who are deeply concerned about the loss of their jobs, and of the troubling economic issues attached to the loss of their local factories and businesses.  The timing seems right for these concerns to come to national attention, and we’re watching carefully to see how the various presidential candidates react to this groundswell.

Our event last week in Buffalo, NY, was a particularly big success, and we thought we’d give a last look at it before we move on to South Carolina.

We also received a number of letters from throughout the Buffalo community, giving feedback on the event.  Typical was the reaction from Tony Kutter, of Corfu, NY, who said:
“What a great time I had at the town meeting in Buffalo (Keep It Made In America).  I live in Genesee Count and am a Republican committee member for the last 35 years. I am getting disenchanted with my party but I have many democratic friends who share the same feeling about politics as usual. I will do my best to approach and bear down on the candidates for answers and truthfulness in how they will vote on these issues.

“I raised four children and we always bought Fisher Price toys made in East Aurora. They were a bit more expensive but well worth it. They had a reputation of being indestructible. If Fisher Price were smart they would return to the U.S. after all the product recalls, even if they had to raise the price.  Everyone would still buy their products.”

Fed Up NY also attended the event and blogged about it, observing that a brief drive through “Riverside, Blackrock or the east side of Buffalo” reveals the “abandoned buildings that were once American manufacturing. That’s where the real frustrations are for Western New Yorkers.”

It’s not just New York, it’s the whole country.  AAM will stay focused on this as we head to South Carolina. 

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