China’s economic slowdown is hurting the supposed U.S. manufacturing “renaissance.”
Things are not looking good for the U.S. manufacturing sector. The Commerce Department released the September trade figures, and while the overall deficit shrank to $40.8 billion, trends in the data suggest growing trouble for American factories.
“Despite continuing claims of an imminent renaissance in the sector, the trade deficit in manufacturing hit a record $74.69 billion in September,” noted economist Alan Tonelson.
Chinese imports into the United States topped an all-time monthly record in September: a jaw-dropping $45.7 billion.
"Imports from China are killing America’s manufacturing recovery,” Alliance for American Manufacturing President Scott Paul said.
Paul's seintiment isn’t just rhetorical – the data backs it up. The Wall Street Journal went as far to say, “[the U.S. economy] may not be able to grow strongly until the global environment improves and the [manufacturing] sector’s outlook brightens.”
The sector is struggling as a direct result of the economic slowdown in China. The slowdown is driving overcapacity in several industrial sectors, such as steel, iron, and aluminum. China has continued to operate mills in these sectors, regardless of domestic demand – and when there's no one to sell it to in China, unfairly priced commodities flood into the U.S. market.
On Tuesday, six U.S. steelmakers won a preliminary ruling on corrosion-resistant steel imports from China, establishing duties of up to 236 percent.
“It’s time for the Obama administration and Congress to give new tools to our industry and workers to fight against unfair imports from China,” said Paul.