The trade deficit and currency manipulation aren’t the sexiest acts, but they need to be heard.
President Obama heads to Michigan today, where he’s expected to talk about the turnaround of the American auto industry following the 2008 rescue. It’s the start of a big three-day tour to preview the upcoming State of the Union address, and will also include stops in Phoenix and Knoxville, Tenn., where Obama will launch a new manufacturing innovation hub.
SOTU Tour 2015 is expected to be a victory lap of sorts, with headliner Obama touting the big accomplishments of his first six years in office. And the Obama administration certainly deserves credit for things such as the auto rescue, which wound up being a tremendous success.
But it’s also important to keep in mind that there are some big issues in the air that could end up hurting American manufacturing workers, including autoworkers. Meanwhile, the administration continues to ignore the elephant in the room that’s hindering manufacturing job growth.
That, of course, is the trade deficit.
As it so happens, the Commerce Department released the latest trade figures today — and they aren’t pretty. The overall monthly U.S. international goods and services trade deficit hit $39 billion in November, compared to $35.9 billion in November 2013.
When the trade numbers are broken down, things look even worse. November imports of consumer goods hit a whopping $48.5 billion, which is the highest on record. Meanwhile, there was a $29.9 billion trade deficit with China in November.
As we’ve pointed out countless times here at the Alliance for American Manufacturing (AAM), the deficit with China is costing America jobs. Roughly 3.2 million American jobs were lost between 2001 and 2013 due to the trade deficit with China, in fact, 2.4 million of them in manufacturing.
Currency manipulation by China is the No. 1 factor that is driving the trade deficit. But the Obama administration has repeatedly refused to name the country as a currency manipulator.
And that brings us to the ongoing negotiations of the Trans-Pacific Partnership (TPP), a potential trade agreement between the United States and 11 countries in the Asia-Pacific region.
A widespread, bipartisan group of lawmakers, economists, columnists and other experts agree that the Obama administration must address unfair currency practices by TPP nations such as Japan, but there is no indication that it has been brought up in the negotiations. AAM President Scott Paul elaborates:
“Despite the fact that majorities of the last House and Senate urged the White House to use the TPP to deter currency manipulation by Japan, the president doesn’t appear to take those concerns seriously, much less seem willing to raise them with Japan. If President Obama wants to do right by Michigan and auto workers, he’ll change course on the TPP, and fast.”
Manufacturing jobs have increased over the past five years, Obama deserves credit for that growth. However, the president is still 743,000 jobs away from hitting his goal of creating 1 million new manufacturing jobs in his second term, and America only has recovered one-third of the manufacturing jobs lost during the Great Recession.
If Obama wants to help spur that growth — and make sure that things don’t go sliding into a negative direction — his administration will get serious about the trade deficit and address currency manipulation in the TPP.