Will the Obama administration have the courage to force fair trade rules on China? The Moneynews headline “U. S. to Force Fair Trade Rules on China” of April 13, 2010 sounds strong, but what Treasury Secretary Timothy Geithner actually said in an interview before a meeting of the American Society of Newspaper Editors, didn’t sound forceful to me.
While he said, “We will be very forceful and aggressive in making sure we are promoting changes for the prospects of a level playing field in those market,” he also said that “We have an enormously productive, beneficial relationship with China today … It’s hugely important to companies large and small across the country.”
Sure, the Federal government benefits from a relationship with China because China is a large lender to the U. S. Government by buying U. S. Treasury securities to support the value of the dollar. In February 2010, China owned $877.5 billion, which represents 33 percent of the total $2.4 trillion outstanding Treasury securities
And yes, China is important to manufacturers who have outsourced their manufacturing to China and retailers who buy “made in China” goods to sell in their stores. But, is the U. S. Federal government’s financial dependence on China beneficial to the American manufacturing industry as a whole and to American workers?
The 2.4 million Americans who lost their jobs since 2001 as a result of the nation’s growing trade deficit, largely with China, say “NO.” According to a report released by the Economic Policy Institute (EPI), on March 23, 2010, high-tech industries are losing jobs faster than any other sector of the economy. The computer, electronic equipment and parts industries experienced the largest growth in trade deficits with China, 26 percent of all jobs displaced by trade between 2001 and 2008.
Since China entered the World Trade organization in 2001, the U. S. trade deficit with China rose by $186 billion, from $84 billion in 2001 to $170 billion in 2008. In 2009, China was responsible for more than 80 percent of the total United States non-oil trade deficit in goods.
California and Texas were the hardest hit for high-tech manufacturing jobs, and North Carolina was hit hard for the textile and furniture industries. Other populous states like New York and Illinois also had major job losses. Using data in the EPI report, the Alliance for American Manufacturing created an interactive map showing the impact by Congressional District. Since manufacturing jobs create three to four other jobs, the real number of jobs lost is three to four times higher. California lost 370,000 jobs, with the worst hit location being the Silicon Valley region. Texas lost 193,700 jobs, and North Carolina lost 95,100 jobs.
The impact of the China trade deficit isn’t restricted to job loss, the report found. Competition with low-wage workers from les-developed countries has driven down wages for workers in manufacturing and reduced the wages of workers in other industries also.
It’s time to wake up and realize that free trade isn’t free when Americans wind up destitute from losing their jobs. Free trade with China and other Asian countries is destroying our economy and costing Americans their jobs. The job you save by the actions you take may be your own.