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China Cheating Costs 400K Auto Parts Jobs

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Reposted from Campaign for America’s Future

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China Cheating Costs 400K Auto Parts Jobs

Dave Johnson  |  February 2, 2012  |  Campaign for America’s Future

This week three new reports described even more continuing damage to our economy caused by China’s trade cheating — and our own lack of response. Even as the auto industry recovers and auto-assembly jobs are returning, the auto-parts industry and jobs are not.

The reports, one from the Stewart and Stewart law firm along with two reports from the Economic Policy Institute (EPI) make the case that China is cheating, that it is costing lots of US jobs, and detail the national numbers and individual state costs.

The reports describe Chinese trade violations and calculate the damage done to our economy:

I joined a call discussing these reports, with Leo Gerard of the United Steelworkers, Robert Scott of EPI, Scott Paul of the Alliance for American Manufacturing and CAF’s Robert Borosage. The call detailed the many ways that China helps companies, even things like a tax on rare-earth mineral exports. So Chinese companies don’t pay the tax, this is one more way their costs are lower, while US companies, already facing currency-rate manipulation, lose the competitive battle.

The Chinese government subsidizes energy costs, land, financing, labor, labor training and many other things, while our government does not. There are so manyways that China incorporates a national industrial policy to help capture vital and strategic industries, while our government does not. Our government barely begins to even enforce trade rules, which enables and encourages competitors to cheat while forcing out honest actors. Some of this is smart policy on China’s part coupled with really not-smart policy on our part. We are blocked by ideologues from having a good, coordinated national industrial policy. Some of that is helped along by the beneficiaries of this lack of policy. With all the causes, the result is that Americans are losing jobs, factories, companies industries and our economy.

Corporate media coverage of these reports is telling, with the LA times describing them as “left-leaning” and the Detroit News describing them as “liberal-leaning.”

Meanwhile the China Daily warns us not to fightback, calling enforcement of trade violations “protectionism.” From Protectionism won’t help,

Trade protectionism against China is on the rise in the United States. The Obama administration has brought trade cases against China at nearly twice the rate of the previous administration, and it is also creating a trade enforcement unit to investigate the “unfair trade practices” of China and other countries.

Nevertheless, are these protectionist measures the right remedy for solving the US’ grim unemployment problem?

Well, the answer to the question is yes.

The punch line comes in what can only be described as a “Freudian slip” at the end of the China Daily piece:

Resorting to protectionist measures hinders international trade, outsourcing and investment, and ultimately harms all.

Why yes, enforcing trade laws just might hinder outsourcing. Yes, that’s the point.

 

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