There's a lot we can do to help U.S. manufacturers compete with China.
In a China Real Time Report op-ed, Mike Dunne says that President Obama is right to take action on China's imposition of duties on U.S. car exports:
President Obama is right to blast China for unfair trade practices in the world’s largest auto market. But he’s aiming far too low.
While visiting a Jeep plant in Toledo on Thursday, Obama challenged China’s decision to impose special tariffs of as much as 34% on SUV imports from the U.S., valued at $3.3 billion.
However, Dunne says there's a lot more that the President can do if he wants to get tough on China's continuing violations of world trade law:
But Chinese penalties on SUV imports amount to a tiny sideshow compared to other ways that China tilts this lucrative, $300 billion playing field in its own favor.
Most significant of these: China’s mandatory joint venture rule that has been stubbornly in place since 1985. Chinese law says that global companies from Toyota to GM to Volkswagen can build and sell cars in China only after forming a joint venture with a Chinese firm — usually a state enterprise. Moreover, foreign partners are forbidden from owning more than 50 percent of the joint venture.
Dunne's point is well taken. Government data shows that the U.S. trade deficit with China climbed in both March and April, and Beijing is trying to ramp up its economy at the expense of America's manufacturers.
Here's where Washington needs to enter the picture. Whether it's because of China's undervalued currency, massive subsidies, or market barriers, Congress and the Administration need to fight for a level playing field for America's manufacturers and their workers.
Yes, congratulations should go to President Obama for filing a trade case yesterday with the World Trade Organization (WTO) against China's unfair imposition of duties on imports of U.S. autos.
But that trade case is only one step. Much remains to be done, particularly on China's egregious currency manipulation. The president also needs to initiate an investigation of China's massive subsidization of its auto parts sector.
Much to do, much to do.
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