Posts from Matthew McMullan

Canada Erects Steel Safeguard Tariffs

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

Time for another steel tariffs update!

A few months ago, Canada was considering erecting safeguard tariffs against certain steel products after America’s broad steel tariffs caused a surge of dubiously cheap imports to wash up in the Canadian market.

It looks like Canada is done considering. Those safeguards are going up. Reports the Wall Street Journal:

The goal of the so-called safeguard measures is to prevent a surge of overseas steel imports from entering Canadian markets. Canada’s steel industry has complained in recent months that U.S. tariffs on steel and aluminum, imposed on national-security grounds and affecting most countries, have caused more shipments of cheap steel to be diverted to Canada from the U.S. …

The new measures could address concerns from the Trump administration that foreign companies are using Canada as a backdoor to move their metals into the U.S., trade watchers say. Canada is trying to convince the U.S. to lift tariffs on steel and aluminum imports from Canada, which it imposed earlier this year on national-security grounds. Canada is the largest foreign supplier to the U.S. of both metals.  

The national security tariffs on steel and aluminum were not lifted as a result of the renegotiated NAFTA, and have been received as an insult north of the border, according to Politico’s Alexander Panetta.   

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U.S.-China Trade Fight Increasingly Includes Currency

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

The last time the United States labeled China a currency manipulator was 1994. It looks like it might be preparing to do so again.

U.S. Treasury Secretary Steven Mnuchin, whose department is responsible for the biannual report (due out next week) that identifies currency distortions around the globe, didn’t flat out say so in an interview with the Financial Times, instead saying Treasury was “very carefully” monitoring the Chinese renminbi, which has fallen significantly during the past year.

But there has been speculation for some time that the Trump administration might take the plunge and place China on this list as part of the larger trade dispute between Washington and Beijing. And now other senior (and anonymous) Treasury officials are worrying about the trading value of the renminbi, too, before Secretary Mnuchin travels to a meeting of finance ministers in Indonesia.  

Naming China (or any other country) a currency manipulator via this report doesn’t immediately do anything. It doesn’t trigger sanctions, but it would require the administration to enter into direct talks with the country it accuses. And it would likely further chill relations between the Trump administration and Xi Jinping’s government in the context of the ongoing trade dispute.

While it’s hard to see how relations could get icier, currency manipulation is a big deal. By keeping a currency undervalued, a country can make its exports less expensive and imports more so. That has directly contributed to the yawning U.S. goods trade deficit with China in years past and has cost the United States a substantial number of jobs.

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The New NAFTA Has an Interesting Rule In It

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

A NAFTA renegotiation has been completed. Go put your transition shades on and head out to the Rose Garden to join President Trump for a victory lap!

It’s not a done deal, of course. Legislatures in all three countries will need to approve the United States-Mexico-Canada Agreement (USMCA), and, given the complicated politics of trade in this country, that is no sure thing.

But, as we said on Monday, there’s a lot that stands out in the text, including: stronger rules of origin for auto manufacturing, side letters on steel and auto tariffs, and improved labor protections for Mexican workers that could ultimately help workers in America. Vox explains:  

One of the biggest complaints against Mexico right now is that labor unions are largely controlled by employers, and workers are not even part of contract negotiations. So it’s no wonder why Mexican factory workers are earning so little. The average hourly wage for factory workers in Mexico is just over $2 an hour, and the country’s minimum wage is roughly $4.15 for a full day’s work. These low wages attract US companies to operate in Mexico.

The new labor rules in Trump’s pact with Mexico are supposed to remove the incentive to keep Mexican workers living in poverty. Under the new deal, the United States can use the same dispute system to resolve labor complaints that NAFTA previously allowed only for commercial trade violations (such as exceeding trade quotas).

So that’s cool. But there’s other interesting stuff in there, too. What’s this new clause all about?

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As Trade War Ramps Up, China Wonders Aloud What Trump’s Intentions Are

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

An interesting story appeared in today’s Washington Post, about China’s shifting reaction to the burgeoning trade war with the United States. Reporter Anna Fifield spoke to Paul Haenle, a former Bush and Obama administration China policy adviser, who had this to say:

“Early on, the Chinese had a very simple narrative that all this trade stuff was about Trump's short-term political objectives, about getting a tweetable victory. … Now, they’re at the other end of the spectrum. Now it’s all about the U.S. trying to block China’s rise.”

Huh. The article lists the other evidence the Chinese state media has pointed to. The revival of the “Quad” dialogue. The possibility of U.S. sanctions over human rights abuses against Muslim Uighurs in China’s west. The suspicious date of the latest U.S. tariffs, which happened to line up with the anniversary of the 1931 Japanese invasion of Manchuria! It’s beginning to look downright conspiratorial, and it’s all right in front of their noses: The United States is out to get China.  

But we should cut them some slack. Though it may be easy to roll your eyes at such commentary coming from state organs in China, a lot of people have a hard time wrapping their heads around President Trump.

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Foxconn Springs a Surprise for its Wisconsin Factory Plans

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

When we last checked in on Wisconsin’s plans to add a Foxconn plant to the southeast corner of the state, there was a lot of skepticism. None of that skepticism has abated, despite cheerleading from Gov. Scott Walker.

The governor -- currently locked in a tight race for re-election -- remains very bullish that this manufacturing facility, which could receive up to $4 billion in public subsidies if it follows through with its contractual plans to create 13,000 jobs in the Badger State, will come to fruition.

But there’s a new wrinkle to the Foxconn development saga: Foxconn might not build the type of factory it originally agreed to build! The Milwaukee Journal Sentinel reported this week:

“In a shift from its stance of two months ago, the company on Wednesday did not offer assurances that it still plans to build the type of liquid crystal display panel plant the contracts cite.

“Known as Generation 10.5 fabrication facilities, or fabs, such plants are the largest and most expensive in the display industry. They produce very large panels, such as 65-inch or 75-inch television screens, that are cut from ultra-thin pieces of “mother glass” measuring about 9.5 feet by 11 feet.

“Foxconn’s original plans last year called for building a Generation 10.5 plant, and both the state and local agreements reached with the company define the project that way.”

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The President Is Cooking Up More Beef with Harley-Davidson

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

President Trump welcomed members of a “Bikers for Trump” group to one of his golf resorts over the weekend. This must’ve had him thinking about motorcycles, because the next day, he fired off a tweet about Harley-Davidson, the Wisconsin-based manufacturer that started out Trump’s presidency in his good graces … only to run up against him after it used the administration’s steel and aluminum tariffs as an excuse to offshore some production of motorcycles to be sold to the EU.

Now, he’s suggesting a boycott.

That’s a pretty extraordinary move, for the president to single out a company like that. The company’s shares slid a little bit on Monday. Way to go, Mr. President, I guess.

Why would he do that?

Could be he read the New York Times articlethat sent a reporter to the annual Sturgis motorcycle rally and found bikers who saw through Harley’s tariff-blaming nonsense and acknowledged its plans to open factories offshore to supply growing markets in Asia and Europe (Harley sales stateside, on the other hand, have been declining for years).

Or maybe he sees a political value in it, and is trying to shore up support in the biker demographic – older, white, patriotic, often military veterans – by attacking the company and siphoning off its iconic, American-made bona fides.

That’s probably only half-right, but who knows? After all, he followed up his Harley tweet with a few denigrating a former White House aide – the one who was once a contestant on The Apprentice – with whom he currently has beef. It’s just as possible that it’s all simply stream-of-consciousness nonsense, albeit with stock-rattling consequences

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The Definitive List of 2018’s Most American-made Cars is Here

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

It’s summer 2018. You know what that means: We’ve got an updated ranking of the most American-made automobiles on the market.

Brought to you by American University’s Kogod School of Business, the Made in America Auto Index considers seven criteria – including where each car model is assembled, where its engine is produced, and where its research and development takes place – to reach its conclusions.

Frank DuBois, the academic behind the index, went into detail about them on the Manufacturing Report podcast last year.

If you’re interested in why it matters where your car is produced, it’s definitely worth a listen.

As for this year’s rankings, they were topped by an American classic: the Corvette, made by Chevrolet.

Find the entire 2018 Made in America Auto Index here.

It’s July 2018, And There’s No Movement on Infrastructure Legislation

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

Last week, House Minority Leader Nancy Pelosi joined Rep. Dan Kildee and other House Democrats for a tour of ongoing water infrastructure repair projects in Flint, Michigan.

Earlier that day, Pelosi and Kildee (who represents Flint) published an opinion that used the Flint Water Crisis as a jumping-off point. It’s title: “Let Flint serve as a warning: Congress must to do more to improve the nation’s infrastructure.”

“The hard truth is, what happened to Flint is not an isolated event. Many other America’s cities and towns are just one mistake away from a similar crisis. What happened to Flint is not an anomaly—rather, it’s a warning to other communities across the country that we must get serious about repairing our aging infrastructure.”

This is not new. It’s becoming old hat to cite the regular report cards from the American Society of Civil Engineers that turn in terrible grades for the country’s public underpinnings. And polling shows people are very much O.K. with spending public money on public transportation infrastructure – indicative of what they feel about other infrastructure, like those for energy and water. 

But there has been little political appetite to tackle our evegreen infrastructure problem.

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Senate Floor Showdown: Sen. Sherrod Brown Blocks Anti-Section 232 Vote

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

Some Senate Republicans don’t like the rationale for the Trump administration’s steel and aluminum tariffs. So much so that they’re trying to add an amendment to a spending bill that would halt any president’s ability to use that rationale without Congressional approval!

They’ve been at it for a while now, reports Politico:

[Sen. Bob Corker (R-TN) and Sen. Pat Toomey (R-PA)], with a coalition of liberal, conservative and moderate senators, were rebuffed earlier this month when trying to attach their amendment to a defense bill. GOP leaders did not want to confront the president so directly, and Corker was told his amendment had procedural problems because the defense bill wasn't a revenue bill.

Though the proposal is dividing the Republican caucus that's unsure if it wants to cross its own president, it looked like the GOP Senate leadership was gonna clear the way for a vote on whether to adopt the amendment – and add it to the farm bill. Would such a farm bill pass? Who knows! The farm bill is a huge piece of legislation. But advancing that amendment would significantly increase the chances that Republican skeptics would succeed in rolling back tariffs they don’t like.

So the Senate skeptics took the floor today ...

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Trump’s China Plans Are Muddy, but IP Tariffs Are Still the Right Call

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

The Trump administration today announced a 25 percent tariff on $50 billion worth of Chinese goods, which it has identified as having profited from intellectual property (IP) theft.

This has been an expensive problem for years. The Obama administration went to work on it; President Obama and President Xi Jinping agreed in 2015 that “their governments would refrain from computer-enabled theft of intellectual property for commercial gain,” a year after it indicted Chinese military officers for engaging in industrial espionage against American companies.

With all due respect to that administration, it hasn’t worked. Chinese-sanctioned cyber-theft, either by hacking or of the "legal" variety – when foreign firms that want Chinese market access are forced to partner with a domestic company and share IP, for example – continues.

In comes the Trump administration, making good on a tariff threat it had telegraphed for months.

While that threat has been clear, Trump’s wider approach to his China trade policy has been muddy. Many observers focus on the erstwhile steak salesman’s preference for unilateralism, but what’s more concerning is his willing confluence of trade and security.

And it’s hard to say what we’re getting out of it. Remember a couple of weeks ago? When Trump went out of his way to bail out a Chinese telecom giant his administration had just banned from purchasing American technology? A telecom giant that repeatedly broke U.S. law and is considered by the American intelligence community to be a passthrough for China’s spies? That was an enormous bone thrown to President Xi (still around, now probably president for life) and it hasn’t resulted in anything useful – and increased soybean exports don’t count.

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Union Matters

Your Vote is the Last Line of Defense Against One-Party Control

Hugh J. Campbell

Hugh J. Campbell Son of a steelworker, Philadelphia, Pa.

The bottom line of Adam Serwer’s The Guardrails Have Failed is: “As for Kavanaugh, every opinion he writes, every decision he joins, and every day he sits on the bench will be tainted with illegitimacy.” Senators who represent a shrinking portion of the population confirmed a justice more Americans oppose than support. He was nominated by a president for whom most of the electorate did not vote. Republican control of the three branches of government is countermajoritarian. With the guardrails of separated powers broken, the last remaining defense for American democracy and the rule of law is the electorate itself.

Since April 8, 2017, when Neil Gorsuch became Associate Justice of the U.S. Supreme Court, the United States Government has been controlled by one political party. Why is this important?

In his Oct. 15, 2011 Senate Judiciary Committee testimony on separation of powers, Justice Antonin Scalia tells us: The real constitution of the Soviet Union, that constitution did not prevent the centralization of power in one person or in one party. And when that happens, the game is over, the Bill of Rights is just what our Framers would call a “parchment guarantee.”

Unless the Republican party ceases to control the legislative branch of the U.S. government in January, 2019, centralization of power will continue in one party, the Republican Party, for another 24 months, and if Donald Trump has his way, that centralization of power will be in one person.

***

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Unions for All, Unions for 15

Unions for All, Unions for 15