Brief AAM comment– $62.2 billion trade deficit in July
Posted by SCapozzola on September 11th, 2008Statement on July trade deficit from Scott Paul, Executive Director, Alliance for American Manufacturing (AAM):
“The $62.2 billion trade deficit that America racked up in July is yet another reminder of the consequences of flawed trade policies and the continued crisis in American manufacturing. Some may take solace in export growth last month, but the real story is China’s continuing, lopsided trade relationship with the U.S.
“Our trade deficit with China rose to $24.9 billion last month, the second highest on record. In 2007, this trade gap cost the United States 366,000 jobs, and we’re on pace to match that in 2008.
“The trade deficit with China is not a product of market forces. Rather, it is the result of Beijing’s mercantilist policies and Washington’s unwillingness to respond. China must honor its commitments on issues such as eliminating industrial and energy subsidies, ending the deliberate misalignment of its currency, and allowing greater market access for U.S. goods. China should also enforce its own labor and environmental laws.
“Washington needs to stand up for American workers and manufacturers before hundreds of thousands of more good jobs move offshore.”
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September 11th, 2008 at 6:14 pm
I appreciate your AAM releases.
However, in this case, you act as if the cause of thge bilatreral
imbalance with China is exclusively the actions of its government, and
not the fact that US-based multinationals actively campaign to help
Beijing remain a cheap-currency export platform.
September 11th, 2008 at 11:20 pm
I saw a comment by Scott Paul of your organization regarding the value of the Chinese currency. He thinks it is overvalued by 40%. He might be right, but I have a larger problem with China as a small exporter.
I export various American made products to foundries in China making golf heads. The foundries are owned by the Taiwanese, but they are located in southern China.
One product I export, alumina crucibles made by Engineered Ceramics in Gilberts, Illinois, faces a VAT and duty imposed by the Chinese government that totals about 35%.
They don’t even make this type of product in China. This illegal duty severely limits the number of crucibles I can sell to these foundries.
I have complained to the US Commerce Department, but they are more interested in keeping Walmart, Target, Costco, Home Depot, etc. shelves stocked with Chinese made junk than in helping US exporters do business in China.
Yours,
David Selman, Kimberlite, Inc.
September 12th, 2008 at 12:53 am
Thank you for your tireless efforts and hard work covering the China Syndrome.
While I agree with you and 100% support your cause, one significant factor you appear to be missing entirely is the fact that China now owns such a significant portion of U.S. debt that they, in effect, often dictate how our government responds to many policy issues – to the point of influencing our interest rates and other monetary policies.
The truth is, those who control currency decisions literally control everything else.
If AAM is going to continue this coverage, then expand it to fully expose our current limitations – which have been created by our own government.
Mike Riley
Editor
Fabricating & Metalworking Magazine
September 12th, 2008 at 3:58 pm
I want to thank Dan, David, and Michael for their comments, and to say that I agree with all three of them. Dan is correct in saying that some U.S. multinationals actively pursue offshore production and benefit from currency misalignment. They are also part of the problem. David rightly notes the impact of our tax system…both the U.S. system that doesn’t necessarily promote exports and the Chinese system which penalizes imports from the U.S. We talk about tax policy from time to time, and David’s comment is a good reminder that this angle needs to be pursued. Finally, Michael sheds some light on one of the consequences of our imbalanced trade relationship with China: $1.8 trillion in foreign currency reserves are now held by Beijing, a number that is growing every day. China is a major buyer of U.S. debt. In essence, we buy from China, and then we borrow from China to buy more from China. Put simply, this is unsustainable. The question is, when will we see action from Washington?
Many thanks to all of you,
Scott Paul
September 12th, 2008 at 8:39 pm
I work for a manufacturer of automation components.
When we try to sell our products in Asia the landed cost is nearly double what we sell for domestically after all the VATS customs etc.
But on the flipside, chinese knockoff products come here and are sold at prices less than we can even buy the material for.
How is the “free” trade?
September 12th, 2008 at 9:35 pm
Sounds like a good time to plug my YouTube video “Dollar to the Giant”:
http://www.youtube.com/watch?v=TUj8leZxmK8
Neither multinationals nor our own government (another multinational) will help us.
We the American People have to start saying “no” to Chinese imports.
Next time you go shopping and have an opportunity to vote for “Made in China” at the cash register. . .
Don’t.
Anything you can do to help spread the word about “Dollar to the Giant” can help each and every one of us–our kids most of all.
Thank you.