The trade-loving think tank should stop blaming the victim when it comes to steel imports.
The Heritage Foundation, the freedom-loving think tank that touts free trade as the end-all answer to America's economic problems, is hosting an event on Thursday morning at its swanky D.C. headquarters looking at America's steel industry. Specifically, the event is putting forth the idea that the anti-dumping and countervailing duties that the U.S. government has (rightly) issued against some unfairly traded steel imports (mainly from China) is wrong because the "U.S. steel market needs free trade."
This victim-blaming is wrong and misguided. These duties have been put in place because China is not playing fair — its industry is government-owned and heavily subsidized, and its steelmakers continue to churn out product without any consideration of market conditions. That's not free trade at all, and forcing American companies to play in a game that is so clearly rigged would be wrong.
But here at the Alliance for American Manufacturing, we believe in finding ways to work together to solve tough issues like this. That's why we've created this handy list of things Heritage can do to help strengthen not just the U.S. steel industry, but all of American manufacturing.
1. Work to increase domestic demand through infrastructure investment, which would boost prospects for our overall economy, steel consumers, and steelmakers. That's something everyone from the Chamber of Commerce to labor unions agree on — except Heritage, interestingly enough. Heritage thinks our infrastructure is just fine. Not sure companies like Caterpillar would agree with that.
2. Work to ensure our competitors aren’t gaming their currencies to gain a trade advantage. The combination of a very strong dollar and currency manipulation overseas is hampering exports, impacting steel consumers and makers alike. Alas, Heritage seems to believe it’s not necessary to counter the currency manipulation of market and non-market economies.
3. Work to strengthen our national security. American steel is crucial to American defense, and relying on foreign nations for the things we need to build it is dangerous. Even a represenative from the Cato Institute, another free market loving think tank, recently conceded that plant closures resulting from unfettered, unfairly-traded imports would be harmful to our national security – even suggesting that the government might have to step in with bailouts.
4. Read the unsealed Justice Department indictment against Chinese military officials for hacking corporate strategies and trade secrets in the United States. A 337 trade case that Heritage will be attacking at today's event makes similar and additional allegations against Chinese entities. It’s not about dumping in this case. Does Heritage not believe the steel industry is entitled to the same intellectual property protections as other U.S. corporations?
5. Examine China’s economic policies, which have produced historic levels of industrial overcapacity, rather than our own. Heritage ranks China No. 144 in the world in economic freedom. Let’s just say there’s room for improvement.
6. Consider the impact of unilaterally disarming our trade laws not only on our economy, but also on the politics of trade. Opening markets and enforcing sensible rules have always gone hand-in-hand in post-World War II American trade policy. Delinking these goals would undermine both.
7. Work to deny China market economy status until it’s truly a market economy, a position shared by the sitting president and the leading candidates to be the next president.
8. Look at historic steel prices and discover that we’re not even close to highs in steel prices, so the consuming industry claims are way off base. Prices are merely up off of a 10-year low.
source: tradingeconomics.com
9. Read the Duke University report on China’s overcapacity in the steel industry to discover the stunning depth and breadth of the challenge that steelmakers in the Americas, Europe, and elsewhere are facing from China’s mammoth overhang.
10. Talk to a laid-off steelworker. There are 19,000 or so of them out there. Visit Granite City, Ill. or Fairfield, Ala. to discover first-hand the “consumer effect” of layoffs: closed restaurants and shops, foodbanks short on supplies and even major city services like police and fire departments shutting down.