Posts from Elizabeth Brotherton-Bunch

We cover a lot of ground here at the Alliance for American Manufacturing — Trade! Infrastructure! Tom Cruise! — but there’s nothing that gets us more excited than learning about an American-made product. Whether it’s a small piece of jewelry or a big piece of steel, we love highlighting the amazing workers and companies who manufacture their products in the United States.

After all, a lot of hard work — and often extra expense — goes into that “Made in USA” label. U.S. companies and workers must take care to ensure that “all or virtually all” of their products are made in the United States.

When something is labeled as “Made in USA,” many consumers recognize the effort that is behind it, along with the millions of jobs that American-made products support. The label can be a deciding factor when someone is deciding on what product to buy.

Made in USA means something.

And while nothing gets us more excited than a Made in USA product, nothing gets us more fired up than when a company knowingly mislabels its product as Made in USA. What’s worse is that these cheaters have been getting away with it.

It happens more than you think. In 2018, the Federal Trade Commission (FTC) caught some pretty brazen Made in USA cheats:

• One company sold military-themed backpacks – including on military bases! – with an “American-made” label.  The FTC found that the vast majority of that company’s products were made in China or Mexico.
• Another company made hockey pucks, and even positioned itself as “the all-American alternative to imported pucks.” All of the company’s pucks were imported from China.
• A direct-to-consumer mattress firm advertised its mattresses as assembled in the United States. The mattresses were made in China.

But in all three of these blatant cases of Made in USA cheating, the FTC politely asked these bad actors to stop this deceitful behavior.

The cheaters paid zero fines — they kept every penny they made deliberately deceiving consumers. No notices to consumers were issued. The companies didn’t even have to admit any wrongdoing!

What’s the point in even having a strong “Made in USA” standard if it isn’t enforced?

The International Brotherhood of Teamsters weighed in on the National Defense Authorization Act (NDAA) last week, sending the chairpersons and ranking members of the Senate and House Armed Services Committees a letter outlining their priorities for the legislation.

First thing on the list? Make sure that the final legislation includes language from the Senate version of the bill that would prohibit “the use of tax dollars from supporting Chinese rail car and bus companies.” Here’s General President James P. Hoffa with more:

“As the proud representatives of American workers who both manufacture and operate thousands of American-made buses, we believe that American companies must be allowed to compete on an even playing field, free from Chinese interference into our transit system and manufacturing base.”

The Teamsters’ support for banning both rail cars and buses is significant. The Senate’s version of the NDAA included language prohibiting China’s state-owned, controlled or subsidized companies from receiving taxpayer dollars to build rail cars and buses, but the House version of the bill only applies to rail cars.

If Congress moves forth with the House version, it would be a huge oversight, to say the least. As we’ve discussed in this space before, there’s widespread bipartisan economic and national security concern about China’s role in building both.

First, there’s the threat to 750 companies and 90,000 jobs up and down the transportation supply chain, as China is aiming to dominate rail car and bus manufacturing via its “Made in China 2025” plan. China heavily subsidizes its state-owned and controlled companies, allowing them to severely underbid on government contracts to build these systems. The point isn’t to make money — China’s ultimate goal is to put competitors out of business and monopolize the global industry.

If you don’t think that’s realistic, just look at what has happened to the pharmaceutical industry.

“When you can subsidize, when you can wholly own an enterprise like China does, you can create a wholly unlevel playing field,” Sen. Tammy Baldwin (D-Wis.) recently told the New York Times. “We’re used to that unlevel playing field existing between the U.S. and China, but now it’s happening in our own backyard.”

A little over a year ago, AAM President Scott Paul chatted with health care expert Rosemary Gibson for an episode of The Manufacturing Report podcast. Gibson had just co-authored a new book examining an overlooked part of America’s trade relationship with China.

The book’s title says it all. In “China Rx: Exposing the Risks of America’s Dependence on China for Medicine,” Gibson and co-author Janardan Prasad Singh outline how China now dominates pharmaceutical manufacturing — and why that is such a big problem for the United States.

Along with making a significant amount of medication, China also has a virtual monopoly on many of the essential ingredients that go into the pharmaceuticals that Americans depend on, including everything from over-the-counter vitamins to cancer meds to almost every antibiotic and blood pressure medication.

China’s dominance of the pharmaceutical supply chain means it has the power to cut off access to many of the medications Americans need to, um, live.

Think tariffs on cotton sweaters and bed linens are bad? Think about what would happen If China decided to cut off our medicine.

Pharmacy shelves would sit empty. Hospitals would close. People would die.

“Children and adults with cancer will suffer without vital medicines,” Gibson recently told the U.S.-China Economic and Security Review Commission. “For people on kidney dialysis, treatment would cease, a veritable death sentence.”

It’s all very scary stuff. Keep you awake at night kind of stuff.

An interesting little story from Europe popped up in our news alerts on Tuesday morning.

It seems that Vossloh, a German rail technology company, is divesting its locomotives business so it can focus on rail infrastructure.

Normally, we here at the Alliance for American Manufacturing wouldn’t pay much attention to the business dealings of a German manufacturer like Vossloh. But what caught our eye was who ended up buying Vossloh’s locomotives unit: China Railway Rolling Stock Corporation Ltd (CRRC).

Nikkei Asian Review reports:

“CRRC, the Chinese state company that is the world’s largest train maker, is set to gain a key foothold in Europe by acquiring its first factory on the continent… Vossloh announced Monday that it would sell a locomotive factory it opened last year to CRRC Zhuzhou Locomotive, a subsidiary of Hong Kong-listed CRRC.”

If you aren't familar with CRRC, it is a massive Chinese government-owned conglomerate with deep ties to the Chinese communist party. CRRC is a key player in the government’s “Made in China 2025” initiative, in which China is aiming to dominate sectors of the global industrial economy, including rail manufacturing.

We’ve been sounding the alarm about the risks that come with allowing Chinese government-owned or controlled companies to build U.S. transit systems like rail cars and buses (and with U.S. taxpayer dollars, natch). 

But hey, don’t take it from us. How about you take the word of four Admirals? And 10 Generals? Oh, and also a former Secretary of the Navy?

Fifteen military leaders wrote to the House and Senate armed services committees this week to urge Members to back legislation to ban companies owned or controlled by the Chinese government from building taxpayer-funded rail cars or buses.

The leaders are particularly concerned about China’s growing dominance in the electric vehicle (EV) sector, writing that China “seeks to gain strategic advantages… by providing aggressive government subsidies to Chinese corporations to lower prices to win business, undermining principles of fair competition and competitive markets.”

They continue:

“If China captures the EV market, the United States’ opportunity to enhance energy security by divorcing itself from an unstable global market merely swaps our reliance on one volatile oil market for a dependence on Beijing for our EVs. Moreover, the infiltration of Chinese technology into the EV sector raises substantial cybersecurity risks that may be difficult to assess and address.”

There’s growing concern on Capitol Hill about China’s role in building U.S. transit, and legislation included in the Defense authorization bill (NDAA) passed by both the Senate and the House before the August recess aims to tackle it.

Congress is out of session for the August recess, which means that the nation’s legislative business is on hold for a few weeks.

But Members have a packed agenda waiting for them when they return in the fall, including finalizing the National Defense Authorization Act (NDAA). It’s a massive bill that authorizes the Defense Department, and included in this year’s version is language that could potentially impact hundreds of thousands of good-paying jobs and our national security.

No pressure, Congress.

As we’ve outlined before, there are major security and economic concerns about China’s role in building U.S. transit. The Senate moved to address these threats when it passed its version of the NDAA by including language to ban Chinese government-owned or controlled companies from using U.S. taxpayer dollars to build U.S. rail cars and buses.

When the House passed its version, however, the ban only applied to rail.

The reason? Folks like House Minority Leader Kevin McCarthy (R-Calif.) support bus maker Build Your Dreams (BYD) – a company that maintains strong ties to China’s government (and has ambitious plans to dominate the global auto market, which threatens hundreds of thousandsU.S. jobs).

Now the legislation is headed to conference, and negotiators from the Senate and the House will determine whether to move forward with the Senate version or the House version. Or, they could very well scrap the language all together in order to ensure passage of the NDAA.

That’s what happened earlier this year, in fact, when similar language was included as part of the fiscal 2019 omnibus spending bill (a.k.a., the legislation that avoided another government shutdown). Because of the complaints of McCarthy, the provision was scrapped and not included as part of the final legislation.

It’s important that negotiators get it right this time.

The United States and China have been at odds over trade for quite some time now, but things usually have stayed polite. Tariffs were issued, threats were leveled, but everybody still made a big point to project calm (well, relative to this administration, anyway). President Trump even took pains to talk about how he and President Xi Jinping were totally good friends!

Well, that’s over.

After U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin returned from recent China trade talks empty-handed, Trump pushed things up a level, saying he would place tariffs on all Chinese imports. 

Then after China responded by allowing its currency to drop in value, the Treasury Department said it is naming China a currency manipulator.

If you believe some of the pundits out there, this is really bad — nay, out of control! And it’s pretty serious — the United States hardly ever names a country a currency manipulator. The last time was… um, China, in the early 1990s.

But you might be wondering… what is currency manipulation? What does it mean?

Let’s break it down.

Well, we made it.

The second night of the second Democratic presidential debates is in the books, and some key manufacturing issues did make it into the spotlight on Wednesday night in Detroit, including trade.

Although this go-around lacked some of the passion featured on the first night — Sens. Bernie Sanders (Vt.) and Elizabeth Warren (Mass.) are the two candidates who have made trade one of their top issues, after all — nearly everybody did mention it at some point. 

But it was frontrunner Joe Biden who got the most attention. The former vice president and longtime senator has the most substantial policy record of anybody in the race, and his rivals on Wednesday didn't hesitate to attack him on it on all fronts, including trade. And Biden made news, announcing he would "renegotiate" the Trans-Pacific Partnership (TPP) trade deal, which President Trump pulled the United States out of on his first day in office. You'll recall, of course, that the TPP was negotiated under the Obama administration — which was when Biden served as vice president. So, Biden's flip-flop is a big f—ing deal.

Read on for more on what Biden said about trade and other manufacturing issues, as well as the remarks from all the other candidates who took part in Wednesday's debate.

Sen. Michael Bennet (Colo.): Moderator Dana Bash asked the Centennial State senator about technology's role in job displacement, and Bennet responded that the real issue is "how are we going to remain competitive? It's not just about trade... it's about whether we're going to invest in this country anymore." He then argued against the recent tax cuts and trillions of dollars spent in the Middle East, noting that "for all the money I've just described, we could have fixed every road and bridge in this country. We could have fixed every airport... We could have fixed not just Flint, but every water system in this country."

Former Vice President Joe Biden: On trade, Biden's record is mixed. As former President Barack Obama's vice president, he was a vocal supporter of the Trans-Pacific Partnership (TPP), but on Wednesday he said the deal must be renegotiated. And in 1993, he voted for the passage of NAFTA. But Wednesday night, Biden dodged a question about the Trump administration's efforts toward a NAFTA renegotiation, and backtracked on his earlier advocacy for the TPP. That flip-flopping aside, it is clear Biden thinks the United States should remain open to trade.

We have a few ideas for what moderators should ask the candidates during this week's debates.

The House Select Committee on the Climate Crisis – a special Congressional panel established in 2019 with the mandate of exploring ways to address climate change – held a hearing on Tuesday that caught our eye.

Now, astute readers of this blog know that the Alliance for American Manufacturing is supportive of efforts to clean up our environment.

We think manufacturers can and should do their part to lower greenhouse gas emissions, and thankfully many already are stepping up to the plate. And we’ve also sounded the alarm about the link between trade and climate change, pointing out that when we depend countries like China for products big and small, we essentially are importing our pollution.

But anyway, back to the hearing, which examined how heavy-duty public transportation impacts the environment.

We were excited to see that Ryan Popple, the president and CEO of zero-emission battery-electric bus maker Proterra, Inc., was among the panelists. Founded in Colorado in 2004, Proterra is now headquartered in Silicon Valley and manufactures its buses at factories in the City of Industry, Calif., and Greenville, S.C. Proterra employs more than 500 people, and has made buses for communities in 36 states, the District of Columbia and even two Canadian provinces.

Proterra is an example of an American manufacturer that is tackling a problem head-on, working to reduce carbon emissions while also supporting job growth and local economic development. But that’s not what got our attention.

What did were the opening remarks from ranking member Garrett Graves. The Louisiana Republican echoed Chair Kathy Castor (D-Fla.), who said America “can lead the world with well-paying jobs as we transition to clean energy.”

And Graves also pointed out what we shouldn’t be doing:

“We had hearings in the transportation committee, where I also serve, where BYD, a Chinese bus manufacturer, was coming in -- and it appears to be a state-owned enterprise -- coming in and knocking out domestic bus manufacturers, and being subsidized by the Chinese government. Coming in and assembling buses in California, in some of our own communities, only to undercut price, knock out domestic production of those same types of vehicles, therefore giving China an advantage.”

AAM President Scott Paul testified at that hearing, and he noted that BYD’s business model is to assemble its buses in the United States, but heavily rely on imported parts and components. (Compare that to Proterra, which sources more than 75 percent of its materials in the United States, supporting jobs up and down the transportation supply chain.)

BYD now has set its sights on dominating world auto sales by 2025, which as Scott Paul noted “would threaten over 5,600 parts suppliers spread across the nation, employing 871,000 workers, the very heart of American Manufacturing.”