Obama Push on Advanced Manufacturing Stirs Economic Debate

January 14, 2013 by Leave a comment

In a White House switch, pro-manufacturing advisers have the ear of the president.

Jobs plan: President Obama addressing manufacturing workers in 2012.

Before a packed arena at the national convention of the Democratic Party in September, Barack Obama outlined a vision for America’s economic recovery with manufacturing as its engine.

“After a decade of decline, this country created over half a million manufacturing jobs in the last two-and-a-half years,” Obama told the cheering crowd in Charlotte, North Carolina. “If we choose this path, we can create a million new manufacturing jobs in the next four years.”

To fulfill those promises, the White House is turning to an economic tool not seen in Washington for years: industrial policy.

Emboldened by a new cadre of advisors, the Obama administration has proposed policies to boost domestic manufacturing involving tax breaks, new R&D spending, and vocational training of two million workers including around advanced technologies like batteries, computing, aerospace, and robotics.

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US Rejects China’s Request For Panel To Mediate WTO Dispute

December 11, 2012 by Leave a comment

china dumping steel

The US on Friday deferred China’s first request to establish a WTO dispute settlement panel to mediate its dispute against the US and its practice of levying both antidumping and countervailing duties on imports from nonmarket economies (NMEs), such as China.

China filed its WTO complaint in mid-September, taking issue with US CV and AD duty measures on a variety of products, including steel. As reported, WTO documents show the suit pertains to import orders and investigations implemented by the US between November 20, 2006 and March 13, 2012. March 13 was the date the US signed into law the newest CVD legislation permitting it to levy both AD and CV duties against NMEs.

The implementation of CVDs in addition to AD duties in NME cases is called “double remedies” or “double counting” by opponents of the measure.

As reported, China is questioning “any and all determinations or actions” by the US Department of Commerce, the US International Trade Commission or US Customs and Border Protection relating to the “imposition or collection” of CVDs. The dispute also includes AD measures, “as well as the combined effect of these antidumping measures and the parallel countervailing duty measures.”

Imports covered in the dispute include circular welded carbon quality steel pipe, light-walled rectangular pipe and tube, circular welded austenitic stainless pressure pipe, circular welded carbon quality steel line pipe, pre-stressed concrete steel wire strand, steel grating, wire decking and OCTG. Also included are seamless carbon and alloy steel standard, line and pressure pipe; drill pipe and galvanized wire.

 

MADE IN USA CERTIFIED® ….. http://usa-c.com

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WTO hands Obama victory in U.S.-China steel case

October 19, 2012 by Leave a comment

Reuters/Reuters – A worker checks on coils of steel at a factory in Dalian, Liaoning province

GENEVA/WASHINGTON (Reuters) – The World Trade Organization barred China on Thursday from imposing duties on certain U.S. steel exports, siding with U.S. President Barack Obama in a dispute with Beijing over a type of steel made in two election battleground states.

The case involved duties imposed by China on “grain-oriented electrical steel,” which is used in the cores of high-efficiency transformers, electric motors and generators. The steel is made by AK Steel Corp of Ohio and ATI Allegheny Ludlum of Pennsylvania.

Although the specialty steel case is tiny compared with other trade disputes with Beijing, the WTO ruling gave Obama a timely win as he defends himself against accusations by his Republican opponent, Mitt Romney, that he is soft on China.

“Today we are again plainly stating that we will continue to take every step necessary to ensure that China plays by the rules and does not unfairly restrict exports of U.S. products,” Obama administration trade representative Ron Kirk said in a statement.

China’s Ministry of Commerce had no immediate comment on the ruling, which arrived late in the evening in Beijing.

When the Obama administration filed the case, the volume of specialty steel trade with China was in the range of $250 million. That pales in comparison with the auto and auto-parts trade at issue in the most recent case Washington filed against China in September. The volume of auto parts trade alone amounted to about $12 billion in 2011, according to the Alliance for American Manufacturing.

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U.S. Affirms Steep Tariffs on China Solar Panels

October 12, 2012 by Leave a comment

Employees assemble photovoltaic panels at Suntech Power Holdings Co.’s factory in Wuxi, Jiangsu Province, China, in 2011.

WASHINGTON (AP) — The Obama administration upheld steep tariffs on Chinese solar panelsWednesday, finding that improper trade practices have undermined an American solar industry that the largest U.S. manufacturer says is in the midst of collapse.

In one of the largest trade cases the U.S. has pursued against the Asian superpower, the Commerce Department said China’s government is subsidizing companies that are flooding the U.S. market with low-cost products — a tactic known as “dumping.” To counteract those price cuts, the U.S. government imposed tariffs ranging from 18 percent to nearly 250 percent.

For some Chinese companies, those tariffs are lower than preliminary tariffs imposed in May.

Still, another set of duties dealing with improper subsidies was increased dramatically. While the initial ruling levied anti-subsidy fees ranging from 2.9 percent to 4.7 percent, the final ruling issued Wednesday sets those fees at 14.8 percent to 16 percent.

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Obama to hit China with trade case over cars, parts

September 17, 2012 by Leave a comment

President Barack Obama launches a campaign swing through the pivotal battleground of Ohio on Monday — armed with a new trade enforcement case against China over allegedly improper subsidies to its auto and auto-parts sectors.

Mitt Romney has recently escalated his attacks on the incumbent as not doing enough to protect America’s battered manufacturing sector from unfair competition from Beijing. The message has special resonance in states like Ohio, where the auto-parts sector accounts for a sizeable chunk of the economy. (The White House says the industry directly employs 54,200 Ohioans and supports some 850,000 total jobs).

Obama decided to go after China at the World Trade Organization (WTO) because its subsidies are giving its auto parts a leg up — even in the U.S. market — over their American counterparts, the administration says.

 

The Obama Administration is also escalating another trade enforcement action, begun in July, against what it says are unfair anti-dumping and countervailing duties on some $3.3 billion in U.S. automobile exports to China.

The United States will ask the WTO to set up a dispute settlement panel to consider its case against those duties, which Beijing imposed in December 2011. China acted in response to the auto bailout Obama championed, arguing the rescue amounted to unfair government support for the industry.

“The key principle at stake is that China must play by the rules of the global trading system,” an administration official said on condition of anonymity. “When it does not, the Obama Administration will take action to ensure that American businesses and workers are competing on a level playing field.”

 

The Cleveland Plain-Dealer first reported the news.

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China moves in on U.S. manufacturer of high-tech car batteries

August 9, 2012 by 1 Comment

A123 Systems, a maker of advanced batteries for electric vehicles, has been struggling financially of late.  However, it may soon be rescued.  Unfortunately, the bailout could come from a Chinese auto-parts company.

Wanxiang Group Corp., one of China’s biggest auto parts makers, has offered a $450 million bid for A123 Systems Inc.

If a Chinese firm were to buy A123, it would put the firm’s lithium-ion technology and its U.S.-funded manufacturing plant, in the hands of a company that has been slowly acquiring U.S. auto parts firms throughout the Midwest.

According to Michael Wessel of the U.S.-China Economic and Security Review Commission (USCC), the deal has worrying implications.  As Wessel explained to Reuters:

“This is a very troubling transaction that should be strictly scrutinized by the U.S. government.  This is a critical sector and one that American policy makers have focused on in terms of future economic opportunity and job creation.”

China’s auto parts industry already enjoys massive subsidies that give Chinese firms a leg up on their U.S. competition.  According to a study conducted for the Economic Policy Institute (EPI) by Usha C.V. Haley, government subsidies to the Chinese auto-parts industry have reached $27.5 billion.  Haley says that China’s central government has committed to disbursing an additional $10.9 billion in subsidies for industrial restructuring and technological development of the industry.

U.S. firms like A123 face the double whammy of subsidized competition from China, and then the potential for buyout by the same competitors.

According to David Vieau, A123′s chief executive, the firm would seek approval from the Committee on Foreign Investment in the U.S. (CFIUS) in order to move forward on the sale to Wanxiang.  However, the deal already faces concerns from Rep. Cliff Stearns (R-FL), who chairs the House Energy and Commerce Committee’s panel on oversight and investigations, and is worried about the deal’s transfer of intellectual property.

The Wall Street Journal quotes Stearns as saying: “We need to make sure the federal government isn’t an unwitting accomplice to the theft of our own national secrets by providing [foreign-controlled companies] with multimillion-dollar government grants and loans.”

 

A company that two years ago was one of the most promising U.S. innovators in the clean-fuel auto industry was rescued from collapse Wednesday. Its buyer: A Chinese auto-parts company.

Wanxiang Group Corp., one of China’s biggest parts makers, offered a $450 million lifeline to A123 Systems Inc., a maker of advanced batteries for electric vehicles that received U.S.-government backing. The deal would put the firm’s lithium-ion technology and its U.S.-funded manufacturing plant into the hands of a company that has slowly acquired a passel of auto assets across the Midwest.

Wanxiang’s investment, part of a move into clean energy …

 

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Death By China

August 3, 2012 by 3 Comments

 

Best-selling author and filmmaker Peter Navarro brings us DEATH BY CHINA, a documentary feature confronting America’s most urgent problem — its increasingly destructive trade relationship with China. 

Since the communist nation began flooding U.S. markets with illegally subsidized products in 2001, over 50,000 American factories have disappeared, putting than 25 million Americans out of work. The United States, as a result, now owes more than 3 trillion dollars to the world’s largest totalitarian nation.

Through compelling interviews with voices across the political spectrum, DEATH BY CHINA exposes our nation’s broken relationship with China and why it must be fixed for the world to be a place of peace and prosperity.

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More Trade Actions – Wind Turbine Towers, Washing Machines

August 2, 2012 by Leave a comment

More Trade Actions – Wind Turbine Towers, Washing Machines

Dave Johnson  |  July 31, 2012  |  Campaign for America’s Future

The game is to underprice your product until your competitors go out of business (like Solyndra & other solar companies). Then you own the market. This is about a lot more than just jobs. Our government is finally doing something about leveling the playing field!

This week, in separate actions, our Commerce Department imposed “anti-dumping” tariffs on wind turbine towers and washing machines. The wind turbine towers were coming in from China and Vietnam, the washing machines from Mexico and South Korea.

Why Sell Under Cost?

Dumping is when a product is sold for less than it costs to evenmake the product. The idea is that your competitors will go out of business and the manufacturing ecosystem of suppliers, knowledge and infrastructure moves to you, so you’ll come out ahead in the long run.

It takes enormous investment to open up a manufacturing operation because you need the proper facilities, the right local utilities, the tools and machines, the skilled workforce, the suppliers, the local infrastructure, the channels to markets, and all the rest of the ecosystem that supports manufacturing. When that is lost to another country it is very, very difficult to get it back. Especially in a country with a Congress that refuses to understand the need for a national industrial policy.

This is the game that countries like China have been playing with their national industrial policies designed to capture strategic industries like solar and wind energy. By selling lower than cost for several years you gain market share and shed competitors. The suppliers, knowledge base, and jobs move their way. Eventually they build or strengthen an entire ecosystem and it is just too costly for others to try to compete.

At first it is attractive to take advantage of the lower prices, later the jobs, factories, companies and entire industries are gone along with the jobs and economic power they bring. Or, in other words, look around at what has happened to us.

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CHINA: DON’T LET US AUTO CASE IN WTO HURT TIES

July 6, 2012 by Leave a comment

BEIJING (AP) — China’s government said Friday it will “properly handle” a U.S. complaint to the World Trade Organization about its anti-dumping duties on auto imports and doesn’t want the latest in a string of trade disputes to harm relations.

“It is normal for frictions to occur,” said a foreign ministry spokesman, Liu Weimin, at a regular briefing. “What is important is to properly handle it and not to let it impede friendly relations.”

The U.S. complaint Thursday adds to a series of disputes with Beijing over market access for goods ranging from poultry to steel. Political tensions over trade are mounting as governments try to boost exports at a time of slumping global demand.

Washington accused Beijing of improperly imposing anti-dumping duties on American-made autos worth $3 billion. The Chinese duties of 2 to 21.5 percent affect cars and SUVs with engine capacity of 2.5 liters or larger.

A Commerce Ministry statement said Beijing will “properly handle the request for consultations under the WTO dispute settlement procedures” — the first step in resolving a complaint.

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Tariff on Chinese solar panels raises fear of trade war

June 6, 2012 by Leave a comment

By 

The Obama administration, still smarting from controversial investments in solar power firms like the now bankrupt Solyndra, has sparked fears of a trade war between the U.S. and China, as the Commerce Department signals it will likely slap a 31 percent tariff on all solar panel imports from China.

While some, frustrated by the high U.S. unemployment, want punishment doled out to China, others say protectionism only hurts the consumers who are forced to pay more.

Such a tariff has been pushed by companies that manufacture solar panels in the U.S., including Solar World, which has a plant in Hillsboro, Ore.

“It’ll basically allow us to compete on technology,” Solar World president Gordon Brinser said, “just like everybody else in any other industry.”

Solar World and others have seen their market share plummet as sales of inexpensive Chinese panels have skyrocketed. The Commerce Department found Chinese companies are guilty of dumping panels on average 31 percent below fair market value.

It’s a charge China’s Suntech, the world’s largest solar company, rejects.

“The way the costs have come down so much and become so competitive is we’ve globalized,” Suntech’s chief commercial officer, Andrew Beebe, said. “We manufacture in China, we manufacture in Japan, we manufacture in the United States.”

While still a tiny piece of America’s energy portfolio, the solar industry has seen substantial growth as the price of panels has fallen. The Interstate Renewable Energy Council’s most recent annual report says solar-generating capacity in 2010 quadrupled in the utility sector and went up 60 percent in residential in just one year.

But many U.S. solar companies that don’t make panels fear the tariff will drive prices so high, consumers will stop buying. Jigar Shah, president of the Coalition for Affordable Solar Energy, said manufacturing panels account for a mere 3 percent of the 100,000 U.S. jobs tied to the solar industry.

“The U.S. now is becoming one of the fastest-growing markets in the world, and this just puts a headwind on that,” Shah said.

The Brattle Group did a study for the coalition that predicted a 50 percent tariff would cost the U.S. 14,000 solar industry jobs. Manufacturers would initially see a small increase in employment, but as sales slowed, engineering and installation jobs would suffer.

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