Continued from Part One.
Although the extent to which US jobs have evaporated or factories have closed directly due to surging Chinese imports is debatable, a discovery has brought some other worrying news to light.
Many news reports, government reports and other manufacturing data have pointed to a slow but steady growth in the US. However, small to medium manufacturers — some of MetalMiner’s core audience — are getting hit hardest.
Alan Tonelson, a research fellow of the U.S. Business & Industry Council, combed through thousands of pieces of Census Bureau data to find that the US “ran a record trade deficit in manufacturing in July—$63.9 billion,” according to a recent Bloomberg article.
Turns out that “the July deficit was nearly 5 percent higher than the previous high of $61 billion in October 2006,” Tonelson relayed to Bloomberg.
Ultimately, Tonelson said in a written statement quoted by the article that the numbers show that ‘a domestic manufacturing renaissance remains a distant and possibly receding goal.’”
That’s certainly disquieting news — and the looming background of China’s global trade shenanigans remains at the top of metal manufacturers’ concerns.
Dan DiMicco, steel producer Nucor’s CEO, published an opinion piece in the Charlotte Observer just the other day. Having been accused of protectionism before, DiMicco’s take seems to infer that WTO action (although he’d prefer unilateral US government action, to call China a currency manipulator outright, for example) would actually put a dent into China’s economic well-being:
“China is utterly dependent on the United States as a trading partner. Every year it sells hundreds of billions of dollars in goods to the United States. In fact – in part because of its willingness to cheat on the world stage – China sells $273 billion more per year to us than we sell to them. A trade war would hurt the United States. It would devastate China.”
All of this, of course, relates to electioneering. Bringing Ohio back into the conversation, it turns out that President Obama’s announcement of the US’ WTO case against China coincided with his campaign visits to Ohio — where much of the economy lives and dies by the auto industry.
Conversely, Gov. Mitt Romney’s tough blustery talk on China’s currency manipulation is, so far, only hot air. But these WTO cases serve as a chance for both Romney — and the Chinese government — to point to politics, as opposed to getting anything done.
Because that, of course, would help small manufacturers too much, wouldn’t it?