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Manufacture This

The blog of the Alliance for American Manufacturing

Workers are hurting and our national security is in jeopardy, Scott Paul tells lawmakers.

Alliance for American Manufacturing President Scott Paul urged the Trump administration to finally act to protect the U.S. steel and aluminum industry when he testified before a House Ways and Means subcommittee on U.S. trade relations in the Asia-Pacific region on Wednesday.

In his testimony, Paul cited China and other countries’ abuses of trade agreements and encouraged the administration to provide further trade protections while opening new markets as massively imbalanced trade deficits with countries in the region have plagued American exports.

Since Beijing entered the World Trade Organization (WTO) in 2001, the U.S.-China trade deficit has risen “from $83 billion in 2001 to $347 billion in 2016,” Paul said.

“In just 15 years, the impact of the surging U.S.-China trade deficit on U.S. companies and American workers has been severe and too often overlooked,” said Paul in his written testimony. “Our communities have shed more than 54,000 manufacturing facilities, and we’ve seen our global market share in manufactured exports shrink from 14 percent in 2000 to nine percent in 2013. Altogether, a staggering 3.4 million jobs, largely in manufacturing, have been lost because of this massive trade imbalance.” 

Other witnesses before the committee, including Matthew Goodman, a senior adviser at the Center for Strategic and International Relations, and Demetrios Marantis, senior vice president and head of global government relations for Visa, Inc., echoed concerns about unfair trade practices.

Paul recommended several actions to help the government level the playing field in the Asia-Pacific region, including: 

  • expediting the G20 Global Forum on steel excess capacity to obtain “verifiable and enforceable net reductions in global overcapacity;”
  • continuing to treat China as a non-market economy;
  • providing support when foreign interests engage in cyber theft and duty evasion;  
  • passing legislation “to treat foreign currency manipulation as a subsidy under trade remedy laws” with “strong enforceable rules in all trade agreements to deter and penalize currency manipulation.” 

Paul also urged the Trump administration to move forward with the Section 232 investigations into the national security threats posed by steel and aluminum imports.

Despite President Trump’s promise to reduce the trade deficit and advocate for American manufacturers during his campaign, his administration’s efforts have only worsened the situation, particularly when it comes to steel imports. Since the Commerce Department began the 232 investigation in May, steel imports in U.S. have surged by 21 percent.

This rise has had very real effects on the U.S. steel industry. “Several steel mills in Pennsylvania are reducing operations, including one that produces armor plate for the U.S. military and played an active and important role in supporting the production of armored vehicles to protect our servicemen and women from IED attacks in Iraq and Afghanistan,” Paul said.

As these steel mills struggle to remain competitive in a market tipped against them, America is faced with an uncertain future in which we are dependent on foreign providers for our national security and infrastructure needs. 

“Domestic production of steel and aluminum are vital in the manufacture of America’s military and critical infrastructure,” Paul added. “If domestic manufacturing capabilities deteriorate further we may be forced to rely on countries like China and Russia to supply steel for our military and critical infrastructure needs.”

Rep. Bill Pascrell (D-N.J.) joined Paul in decrying the administration’s decision to delay the 232 investigation until after tax reform as utterly antithetical to Trump’s rhetoric on trade. 

“It is unclear when, if ever, the president intends to take action. Right now, it seems that, paradoxically, the president has exacerbated the problem of increasing steel imports that has been devastating the U.S. steel industry,” Pascrell said.

Not only is the delay in the 232 investigation undermining American industry, it also poses a serious danger to America’s stability.

“After nearly ten months in office the administration’s words have resulted in either inaction or confusion as to the path forward. We believe it’s time for clarity as well as action,” Paul said. 

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