Senators, Members of Congress Urge President Obama to Save U.S. Auto Parts Jobs

March 16, 2012.  Washington, DC.   A group of 188 Senators and Members of Congress have sent a letter to President Obama expressing “serious concern” about China’s massive subsidies and policies to unfairly support its auto parts sector.  The letter encourages the President to “use all existing authority under the law to preserve and protect U.S. production and jobs.”  Click here for a list of signers.

The Alliance for American Manufacturing (AAM), a non-partisan partnership of some of America’s leading manufacturers and the United Steelworkers, praised the letter. 

Said AAM Executive Director Scott Paul, “Congress has said loudly and clearly that it believes the Obama Administration should stand up for American auto parts workers and businesses to guarantee a level playing field. Now, the ball is in the administration’s court. Will President Obama match his rhetoric on China with action to preserve auto parts jobs in America?”

A series of recent reports have documented a number of policies that China’s government is using to boost its domestic auto parts production.  Beijing has already spent $27 billion in subsidies for its auto parts sector, with another $10 billion expected in the near-term.  The Chinese government also essentially blocks exports of U.S. autos while favoring its own industry, in direct violation of World Trade Organization (WTO) commitments.

Additionally, the Chinese Government imposes restraints on the export of key raw materials needed for the production of auto parts. China also coerces U.S. companies in China to transfer their technologies to Chinese partners.

These tactics have enabled imports of Chinese auto parts to surge by 25 percent in each of the past two years.  And in just 10 years, the U.S. trade deficit in auto parts with China has grown by nearly 900 percent. No other major auto-producing nation, including Germany, Japan, and South Korea, has such a trade imbalance.  In fact, those countries export more auto parts to China than they import.

An unfortunate result of China’s predatory practices is that the link between U.S. auto assemblers, parts producers, and aftermarket producers has been severed. Thus, while the nation’s automotive assembly plants are in business again, the auto parts sector now faces serious challenges.

Said Paul, “China is not penetrating our market the old-fashioned way, by outcompeting us. Instead, Beijing has pumped $27 billion of subsidies into its auto parts sector, with an additional $10 billion planned. The president should initiate a trade action against China to stop its auto parts subsidies, open its market, and grow jobs in America.”

Read the full letter to President Obama.