Response to State of the Union, from the Alliance for American Manufacturing (AAM).

This evening, President Obama delivered his 2014 'State of the Union' address.  Portions of the president's speech focused on the U.S. manufacturing sector.

Alliance for American Manufacturing (AAM) President Scott Paul commented:

"This is the third consecutive State of the Union in which there has been a strong rhetorical focus on manufacturing, and that’s welcome. But the progress, despite the rosy picture painted by the President, has been painfully slow. And in some cases, such as the trade deficit with China, we’ve seen backsliding.

"The President in many ways absolved past public policies as a reason why there is more economic insecurity and a decline in good, middle-class jobs. He shouldn’t have.

"From a flawed trade agreement with China in 2000 to ceding more power that enabled Wall Street to dictate terms to Main Street manufacturing in 1999, the U.S. has committed a number of unforced errors along the way. Germany, subject to precisely the same sort of technological change and globalization effects as the United States, has (1) 23% of its economy still in manufacturing, (2) a trade surplus, and (3) a steady share of global exports despite the rise of China. We’ve fallen in all three of those data points dramatically over the past 15 years. So policies do matter, past and present.

"While the President indicated there were a number of things he planned to do on his own, without Congress, in 2014 to boost the economy, he left some important things off that list:

  • designating China a currency manipulator
  • tightening Buy America compliance among federal agencies to prevent tax dollars from leaking overseas
  • ensuring the U.S. isn’t exporting energy products to non-market economies in a way that harms the emerging energy advantage for our domestic firms
  • launching an executive effort to cut our trade deficit with China in half. (Doubling exports means very little if imports rise even faster.)

"These actions could have a profoundly positive impact for American workers and manufacturing, and reverse some of the policy failures we’ve seen over the past few decades.

"Yes, half of CEOs may be considering reshoring, but few have actually moved their jobs back. Our trade flows provide the evidence. Yes, the U.S. may be named as the top country in which to invest by executives, surpassing China, but FDI into China still blows away FDI coming into the U.S., according to OECD figures. And yes, the U.S. is creating manufacturing jobs consistently for the first time since the 1990s, but we haven’t even come close to reclaiming the jobs that were shed during the recession."

Click here to see Paul’s specific responses to President Obama’s manufacturing proposals.

Tomorrow, President Obama will speak at a U.S. Steel plant in West Mifflin, PA.  U.S. Steel is an AAM stakeholder, and the visit follows last November's presidential tour of another AAM stakeholder facility, the ArcelorMittal plant in Cleveland.  The nation's steel manufacturers continue to face unfairly subsidized competition from overseas, and Paul says he hopes the visit to U.S. Steel will remind the president of the importance of enforcing antidumping and countervailing duty orders.

In an op-ed yesterday in Real Clear Politics, Paul urged the president to implement a manufacturing policy that could help to expand America's middle class.