Posts from Elizabeth Brotherton-Bunch

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.”

A big step in the right direction.

The House of Representatives on Friday passed the annual spending bill for the Defense Department, and the legislation included language to block federal transit dollars from being spent on electric rail cars made by Chinese state-owned companies.

The provision included in the National Defense Authorization Act (NDAA) passed by the House prohibits federal tax dollars from being used to award a contract or subcontract for the procurement of rail cars to be used in public transportation by state-owned or controlled companies from non-market economies like China.  

Although the NDAA passed on party lines, this specific legislation enjoyed bipartisan support, as it was originally sponsored by Reps. Harley Rouda (D-Calif.), Rick Crawford (R-Ark.), Scott Perry (R-Pa.), Kay Granger (R-Texas), Tim Ryan (D-Ohio), Eleanor Holmes Norton (D-D.C.), Randy Weber (R-Texas) and John Garamendi (D-Calif.).

The NDAA now heads to conference with the Senate, which previously passed its version of the defense authorization bill that included a similar provision that applied to both rail and buses. Sens. John Cornyn (R-Texas), Tammy Baldwin (D-Wis.), Mike Crapo (R-Idaho) and Sherrod Brown (D-Ohio) served as the original sponsors of the Transit Infrastructure Vehicle Security Act in that chamber.

Here at the Alliance for American Manufacturing, we encourage lawmakers to put forth a final NDAA conference report that includes the Senate version of this provision, as it applies to both types of public transit.

President Trump is back from his big weekend trip to the G-20 summit, where he met with world leaders and even made a quick stop in North Korea!

There’s no shortage of headlines from Trump’s trip, and there’s certainly a lot to unpack. But some Members of Congress are homing in on one in particular: Trump’s announcement that he will loosen restrictions on U.S. companies doing business with Chinese technology giant Huawei.

Schumer and Rubio — not a couple of guys you expect hang out much — aren’t alone in their criticism. A growing list of Republicans are speaking out against Trump’s decision, as are 2020 Democratic presidential contenders like Tim Ryan.

Political pundits don’t seem all that impressed, either. Over at Bloomberg, technology columnist Tim Culpan wrote that “as far as deals go, this is set to be one of Trump’s worst.”

Oof. Apparently feeling the heat, Trump administration officials are already scrambling to downplay Trump’s decision, with White House economic adviser Larry Kudlow saying that the easing of restrictions on Huawei will be for “general merchandise, not national security sensitive” products like chips and software.

There’s a lot of political posturing happening here, and if you aren’t completely tuned into this ongoing saga, you might be justifiably lost. Let’s break things down.

If you’ve visited the Internet sometime over the past two-and-a-half years, you almost certainly have come across a diner story.

You know the one. A reporter from a big fancy news outlet with its headquarters in New York City or D.C. flies out to a working-class town in Ohio or Michigan or Pennsylvania or maybe even Wisconsin and stops at the local diner — or maybe a sports bar. There, the reporter talks to people over pancakes and coffee or chicken wings and beer about their political opinions and why they think Donald Trump got elected president, then files a story and immediately flies home.

There were so many of these stories in recent years — full disclosure: we shared them and even are featured in some — that predictably there was pushback. One of the criticisms is that these pieces aim to figure out the white working-class voter but leave out the voices of people of color who also live in these places.

While some folks have taken pains to capture diverse voices — Chris Arnade comes to mind — there are examples where this criticism is valid. Slate was among the outlets that critiqued The New York Times for visiting Youngstown, Ohio, but failing to capture the voices of the majority-minority city, which is 43 percent black.

And Slate went a step further, sending reporter Henry Grabar to Buckeye State to get the perspective of “the people in Youngstown, Ohio that the national media usually ignores.” Grabar’s report highlights the unique struggles that the black community in Youngstown has faced over the past several decades, writing that whatever “went wrong for the white working class here went even worse for their black counterparts.”

It’s not just Youngstown. Back in 2016, Gerald D. Taylor — himself a Youngstown native! — highlighted some of these issues in the report Unmade in America: Industrial Flight and the Decline of Black Communities. As Taylor notes, manufacturing in the mid-20th century allowed many black families the opportunity to begin to build a nest egg, own their own homes and move into the middle class.

Earlier this month was World Environment Day, a global United Nations event defined as the “’people’s day’ for doing something to take care of the Earth.”

There’s a host nation each year for the event — this year it’s China, LOL — but also Dave Matthews is a celebrity ambassador, so it’s pretty legit.

In any case, the Alliance for American Manufacturing has long held that American companies and workers have a role to play in reducing carbon emissions and improving the environment. Many already are leading the way, from individual companies like Aardvark Straws, which is helping Americans ditch harmful plastic straws, to the 1,200 U.S. factories and 288,000 American workers who are building clean, fuel-efficient vehicles.

Then there’s steel company ArcelorMittal, which recently unveiled its Climate Action Report, the company’s game plan for cutting its global emissions in line with targets adopted by world leaders in the 2015 Paris Agreement.

ArcelorMittal is the world’s largest producer of steel, and it has an extensive presence in the United States, employing more than 18,000 people at 27 operations in 14 states and Washington, D.C. As such, it’s a leader for the entire steel industry, which accounts for 7 percentof total global emissions worldwide (although it’s worth pointing out that China — which has a steel overcapacity problem to begin with — is driving quite a lot of those emissions).  

But I digress.

Two big manufacturing stories we’ve been following closely over the past few months are converging.

First, there’s the U.S.-China trade negotiations, which are… so not happening right now. President Trump, emboldened from his recent tariff spat with Mexico, is playing hardball with China, and the Chinese are not backing down, either.

That means that businesses are looking at long-term strategies on how best to survive a trade war between the two nations before things really get out of hand.

One of those companies is Foxconn, which makes a ton of tech but is perhaps best known for manufacturing iPhones in China. Most of the factories that produce the iPhone and its various parts are in China, and Foxconn employs 350,000 people to make them at a massive factory complex in Zhengzhou called “iPhone City.”

Working conditions there are just great and people are very happy.

But I digress. If Trump does indeed follow through on his current plan to place a 25 percent tariff on Chinese imports, the iPhone and other Apple gadgets would take a hit. As The Verge noted, one-third of Apple’s iPhone revenue comes from products imported to the United States from China, so it’s a big deal for the California-based company’s bottom line.

Apple would have to decide whether to pass the cost increase onto consumers, which could raise the price of the already expensive iPhone by up to 16 percent, according to Bloomberg. Demand for the iPhone could then decrease by up to 40 percent. Either way, Apple is in a bad place.

So Foxconn — which relies on Apple for about half of its revenue — is now looking at ways to make the iPhone outside of China and avoid the tariffs. Foxconn executives already have made a big deal about how it is “totally capable of dealing with Apple’s needs to move production lines,” possibly to plants in Brazil, Mexico, Vietnam or... Wisconsin?