Stop the Chinese surge: China subsidizes its auto parts, putting at risk Pennsylvania jobs

Fri, 04/20/2012

PITTSBURGH POST GAZETTE

April 20, 2012


Stop the Chinese surge: China subsidizes its auto parts, putting at risk Pennsylvania jobs
By Scott Paul

They still don't get it. Every four years, presidential candidates pledge allegiance to American manufacturing and profess a love for "Made in America." But when the going gets tough, no presidential candidate matches rhetoric with action.

In Pennsylvania, a state where manufacturing still provides good jobs, that's just unacceptable -- especially since we now know that more than 42,000 jobs in the state's auto parts sector are at risk due to China's cheating.

Pennsylvania is an important part of the motor vehicle industry supply chain. And because auto parts is such a key segment of the state's economy, Pennsylvania voters need to know some facts before they head to the polls.

The truth is, the auto sector is just getting back on its feet after a near-death experience. We now see auto assembly factories humming again.

But what many people don't realize is that 75 percent of the jobs in the automobile industry are in the auto parts sector. These are the factories large and small that produce aluminum wheels, brake pads and the thousands of other parts that go into making an automobile.

This sector is under attack from China. We've seen imports of Chinese auto parts surge by 25 percent in each of the past two years. We've seen our trade deficit in auto parts with China grow nearly 900 percent in just 10 years. Yet no other major auto-producing nation -- Germany, Japan, South Korea -- has such a trade imbalance. Thanks to strongly coordinated national manufacturing strategies, these countries are much less likely to outsource parts production; in fact, they export more to China than they import.

China is not penetrating our market the old-fashioned way, by out-competing us. Instead, Beijing has pumped $27 billion of subsidies into its auto parts sector, with an additional $10 billion planned. Through policies that have been documented in great detail by our own government and outside investigators, China also blocks our exports of autos and auto parts while favoring its own industry, in direct violation of the commitments it made to free markets when it joined the World Trade Organization.

After a recession, auto parts jobs traditionally grow at a faster pace than final assembly jobs, but since 2009, the opposite has been true. That's because Chinese imports began surging into our market.

The threat to auto parts jobs has become so alarming that a bipartisan group of 188 U.S. senators and members of Congress, including seven members of Congress from Pennsylvania and Sen. Bob Casey, recently sent a letter to President Barack Obama expressing serious concern about China's massive subsidies. Their letter urges the president to "use all existing authority under the law to preserve and protect U.S. production and jobs."

Our legislators should press the president for action. After all, our trade laws exist for a reason -- to ensure a level playing field for American workers and businesses. But who can we count on to act?

While Mitt Romney talks a tough game against China, especially on its undervalued currency, he opposed relief for tire workers in America when the industry faced a wave of Chinese imports. Mr. Obama, who has approved some trade sanctions on China, hasn't fully delivered on his promises to get tough, refusing six times to designate China as a currency manipulator, which it most certainly is. We also must demand action from candidates for Congress.

This issue should and can transcend politics. Last fall a strongly bipartisan majority, including Sen. Casey, supported Senate legislation to deter China from manipulating its currency.

I hope both of our presidential candidates will stand up and defend America's auto parts workers and businesses. Whoever is president should initiate a trade action against China to stop its auto parts subsidies, open its markets and grow employment in the United States. More than 42,000 jobs in Pennsylvania depend on it.

Scott Paul is executive director of the Alliance for American Manufacturing (www.americanmanufacturing.org).

First Published 2012-04-20 04:20:08

@KeepitMadeinUSA on Twitter