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The ITC Case On Chinese Steel Tubular Products: Who Is Really Stealing From Americans?
By Leo Gerard
President, United Steelworkers
On December 31, in a truly ridiculous editorial entitled "Steeling From Americans" -- note the spelling! -- the Wall Street Journal railed against the International Trade Commission's decision the prior day to impose tariffs in response to China's proven cheating in its exports of oil country tubular goods. The Journal said that "U.S. trade laws aren't about 'fair trade' or 'leveling the playing field,' or the other clichés of protectionists -- they have become tools of political income redistribution, protecting certain industries at the expense of others and the larger U.S. economy."
Well, I say that this editorial is like saying that putting Bernie Madoff in jail is stealing from his clients.
Let's get it straight: China has been cheating and in the process stealing from its trading partners for years, and they just got caught -- again! -- by the only arbiter there is right now, which is the ITC. And they're being punished with the only response available, which are those tariffs.
China's massive manipulation of its currency and its illegal subsidies have continued for years, giving it an unfair advantage against U.S. manufacturers, and its labor and intellectual property and environmental protections are grossly inadequate. We need to insist that China abide by the rules that govern the conduct of responsible nations. We will do business with China, but we will not be pushed around or talked to death while they continue to take our markets.
The U.S. must confront the challenges of globalization, but we cannot do so by ignoring the deleterious impact that our current international trade and economic policies are having on our nation's productive capacities, and on the standard of living of the vast majority of our citizens.
America's trade deficit this year with China alone will exceed $250 billion, and our former overall trade surplus in high-technology products, including high-tech steel, has now turned into a rapidly increasing trade deficit.
The continuing loss of high-paying, high-technology jobs -- including an estimated 1.4 million more over just the next couple of years -- does not help our nation compete better in a global economy, because there is no commensurate creation of jobs here. And the countries to which we are sending our dollars for imported items -- especially China, with its more than $2 trillion of foreign exchange reserves -- are now using them to buy our vital productive assets.
Most Americans strongly believe that our nation's current international economic and trade policies are undermining our nation's standard of living, and ultimately our national security. Yet, with typical pure free trade orthodoxy, the Journal and the U.S. Chamber of Commerce still claim that workers and representatives who respond to these legitimate demands of our citizens for a change in course are protectionist.
Making America's trade policies fairer and furthering American jobs is absolutely not protectionism. Paul Samuelson, the architect of modern economics, recognized years ago that cost-of goods subsidies and currency manipulation create "genuine problems for free-trade apologetics.” Most important, however, he recognized that nations, like China, which subsidize their exports are, to use his words, "effectively stealing jobs from other countries".
Of course, illegally subsidized and currency manipulated exports to the United States -- in this case, of tubular steel -- are cheaper at the checkout counter, so to speak, than indigenous goods. However, the Journal completely ignored the fact that such goods are certainly not cheaper to our overall economy, considering the millions of lost American jobs they represent.
We are long past the point when the short-term benefits to American companies and consumers from illegally-subsidized lower-cost imports have been exceeded by the long-term costs to the U.S. economy from the millions of lost jobs here at home because of these imports.
So, who is really stealing from Americans? How about we all just agree that in this case it was China's mercantilism, and that it's now way past time to aggressively respond to it, which is all the ITC was trying to do with its action on tubular steel products.
Trade agreements without teeth and then enforcement aren't agreements at all, they are simply "aspirations". And trade agreements that ignore currency manipulation, illegal subsidies and uneven environmental practices are less even than that. Simply put, America needs to be as aggressive in defending its economic interests as our trading partners are in advancing theirs.
-- Leo W. Gerard is international president of the United Steelworkers and a member of the executive council of the AFL-CIO.
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