China's predatory trade practices
The U.S. government reported that although the overall U.S. trade deficit fell from $758.5 billion in 2006 to $711.6 billion in 2007, the U.S. trade deficit with China spiked to $256.2 billion in 2007, smashing the previous year's record of $232.5 billion.
For manufactured goods, the U.S. trade deficit was $499 billion in 2007, dropping slightly from the 2006 total of $526 billion. Although data detailing the U.S. trade deficit with China for those products has yet to come out, it will probably exceed $250 billion.
As a result, trade deficits with China now will account for more than 50% of the U.S. trade deficit in manufactured goods, up from 27% in 2001.
"Although the overall U.S. trade deficit fell slightly due to the slowing U.S. economy and the steep decline in value of the U.S. dollar, the U.S. trade deficit with China still spiraled out of control," said American Manufacturing Trade Action Coalition Executive Director Auggie Tantillo.
"U.S. manufacturing is drowning in the red ink of the U.S. trade deficit with China. Clearly, the $1.2 trillion cumulative trade deficit in manufactured goods that the United States has run with China since 2001 correlates directly to many of the 3.4 million U.S. manufacturing jobs lost during that same time period," Tantillo continued.
"Swift action from Congress is needed to stanch the hemorrhaging of U.S. manufacturing jobs lost to predatory imports from China. The offshoring of key U.S. industrial sectors will keep accelerating unless Congress steps in and stops China from illegally subsidizing their exports to our market," Tantillo said.
To start fixing its broken trade policy, the U.S. immediately must counter the sizeable subsidy that China provides to its exporters through its illegal pegging of yuan to the dollar. As such, Congress should pass without delay H.R. 2942, the Currency Reform for Fair Trade Act of 2007 introduced by Congressmen Tim Ryan (D-OH) and Duncan Hunter (R-CA).
Consistent with the World Trade Organization's provisions, H.R. 2942 would discourage currency manipulation by China and other countries by giving U.S. producers and workers the right to seek a remedy for injurious export subsidies or dumping under the U.S. countervailing duty or antidumping duty law.