Manufacture This

The blog of the Alliance for American Manufacturing

Last week Vice President Joe Biden traveled to Asia to tackle key security, trade, and economic issues. But China’s establishment of a new Air Defense Identification Zone (ADIZ) ignited tensions in the region and overshadowed the Veep’s entire visit. The Obama Administration had hoped his visit would solidify the Trans-Pacific Partnership (TPP) in Japan and address economic concerns in China.

The trip accomplished neither, and the administration once again bats zero by failing to address China’s currency manipulation.

This lack of economic news from Biden’s visit to China has people questioning how best to approach the world’s second largest economy. Leslie Gelb of The Daily Beast asks, “Time to Get Tough on China?” He writes that the only way to combat China’s military power is our own economic power.

But the real leverage between the U.S. and China comes down to economic horsepower. However much military strength is needed, and it is, policy makers understand full well that power in the region stems from domestic economic strength and vitality, plus trade and investment power. China’s economy still marches upward and has already surpassed Japan’s. The American economy is limping along. Congress hasn’t passed a budget in six years. It regularly brings the nation to debt default. It won’t increase funds for physical and intellectual infrastructure, where America is clearly falling behind.

We couldn’t agree more, Mr. Gelb. The Alliance for American Manufacturing (AAM) has long urged the president and congress to get tough on China — specifically, its practice of currency manipulation.

There are bills in the House and the Senate to address this issue. (If you haven’t already, urge your Representative or Senator to get tough on China.)

As we wait for President Obama and Congress to take action, our trade deficit with the second largest economies reaches new heights.

Said AAM President Scott Paul:

One way that Beijing has been able to expand its military budget is through its accumulated trade surpluses with the United States. We’re right to complain about an air defense zone. But if we want China to know that we’re serious about challenging its aggressive behavior, we need to change our economic policies that have enabled it. Unfortunately, limiting our trade deficit with China seems to have fallen off of everyone's radar, including the Administration’s.

The Administration record for getting tough on China: 0 of 11. Congress, you’re up to bat.