Posts from Scott Paul

OPINION: Trump Is Right on China Trade, But So Far Has Little to Show For It.

Scott Paul Director, AAM

President Donald Trump is shortly flying to Japan to represent the United States at a G20 summit. While there he’ll meet with Chinese leader Xi Jinping on the gathering’s sidelines to restart trade talks, dormant since the White House accused China of backsliding from already negotiated commitments.

The stakes are appropriately high. These are bilateral talks between the world’s largest economies, after all, and securing a better deal for American industry than what his predecessors could achieve was one of Trump’s most emblematic 2016 campaign promises. Whether he’s successful will surely affect his 2020 reelection.

His administration was right to push back against China’s unfair trade practices. China for years has used these tools to benefit its homegrown industries over those of other nations, but previous White Houses and the multilateral approach they endorsed did very little to curtail them.

Now at least the parties have come to the table, even if they are temporarily standing away from it. The image of a tough negotiator that Trump cultivated for years – from The Art of the Deal to the Celebrity Apprentice to McDonald's commercials – has been buoyed by some real-world heft: Thanks in part to a forceful negotiating strategy led by U.S. Trade Representative Robert Lighthizer and billions of dollars of tariffs raised on Chinese imports (not to mention the justified threat of billions more), the Trump administration has Beijing’s attention.

But we still don’t have a deal, and Trump doesn’t seem any closer to get us a good one. This agreement must rebalance a lopsided bilateral trade relationship, grant the U.S. industrial base the time to recover lost ground, immediately halt state-sponsored intellectual property theft, and address persistent overcapacity in export-oriented Chinese industries.

Few of us think about the impact of these Chinese policies on our nation. But it’s time to tune in.

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The Opportunity for a Chinese Trade Deal Is There, If Trump Can Seize It.

Scott Paul Director, AAM

As negotiations enter the finer points of the deal next week, it’s vital that Trump leverage the momentum his administration has cultivated in the trade talks and truly address China trade cheating.   

Alliance for American Manufacturing President Scott Paul writes in the Washington Examiner:

Trump, meanwhile, has prepared the ground to make it more favorable to U.S. negotiating positions. The threat of lasting tariffs on most Chinese exports into the American market has made an impression; it has added billions in costs to Chinese businesses, and therefore has drawn the Chinese side to the bargaining table.

It’s no easy feat to persuade China’s economic managers to make structural reforms to a wildly successful mercantilist model that would result in more parity for U.S. trade interests. It remains to be seen how far a deal will go.

Most likely, it won’t go far enough. U.S. Trade Representative Robert Lighthizer has been working diligently through a prescribed set of issues with his Chinese counterparts. Based on some reports, they’ve been able to make more progress on some issues, such as forced technology transfers and IP theft, than on others, such as scaling back state-owned enterprises and improving enforcement mechanisms. Those unaddressed issues may be the most important results of what will eventually come out of this.

And still, the window of opportunity is open. The time to deal is now.

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The Case for Tariffs

Scott Paul Director, AAM

There is growing bipartisan agreement that China cheats at trade. We’re now faced with a new question: Do we continue to ignore China’s cheating or do we finally act decisively to stop it?

The only progress the U.S. has ever made with serial trade cheats has been the result of extraordinary pressure applied by Congress and the White House, including, but not limited to, the threat of tariffs. We must therefore stick together. Now is not the time for Washington to demonstrate to the governments of China, Russia, or other mercantilist nations that our resolve is anything less than strong and unified.

The past 20 years of endless dialogue with China and other nations show that polite requests to curtail state-driven industrial overcapacity or to refrain from forced technology transfers and joint ownership partnerships in exchange for market access do not yield meaningful results.

China is not holding up its end of the bargain, at the WTO or via its bilateral relationships, and kicking the can further down the road is simply not a smart trade policy strategy.

This is true particularly in the steel sector, where the United States has for years worked at the OECD and for the last two years at the Global Forum on Steel Overcapacity to address these serious problems and achieve enforceable multilateral disciplines. But these efforts have not produced meaningful results and we cannot afford to wait any longer.

As time has passed, our bilateral trade deficit with China has surged to unthinkable levels. The theft of our intellectual property has inflicted serious injury and dampened our future economic outlook. China’s industrial overcapacity has spread like a virus through global markets, putting at risk our ability to produce essential materials like steel and aluminum for our national security and domestic preparedness requirements.

Regrettably, our trading partners have refused to act.

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Trump’s Trade Team Must Stay Tough During High-Level Talks in China

Scott Paul Director, AAM

For almost a year, Donald Trump’s steel and aluminum tariffs were less of a reality than a question of whether he would implement them at all. And his broader China trade strategy could have been described as “speaking loudly but carrying a small stick,” the Teddy Roosevelt philosophy stood on its head.

He then began the process of keeping some of these promises, roiling Republican party leaders and free-trade ideologues elsewhere who were surprised that a president who campaigned on a blatantly aggressive trade policy would do such a thing.

Now comes another question: Will he stick by these tariffs?

It’s hard to say with a president as mercurial as Trump. But we’re about to see his commitment to them tested, as a “Magnificent Seven” of Trump administration trade officials head to China to discuss with their counterparts the tensions of which these tariffs are a part. If his commitment to them crumbles, it will say a lot about what this administration can accomplish in its stated goal of resetting our trade relationship with the world’s second largest economy.

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Jobs Are Coming Back to Steel Towns

Scott Paul Director, AAM

For years now, America’s steel and aluminum workers have faced an onslaught of foreign imports that caused tens of thousands of layoffs. Factories across America closed – 10 steel furnaces were even shut down. Blue collar communities were devastated.

But because of people like you, places like Granite City, Ill., now have hope. And there will be more steel jobs on the way.

After a nearly year-long investigation, President Trump took action on Thursday to curb steel and aluminum imports. America’s steel and aluminum workers and companies will stabilize after years of unfair competition, regain market share and even hire more workers.

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Trump Administration Begins to End Nation's Surrender on Trade

Scott Paul Director, AAM

President Trump is right to call for tariffs on steel and aluminum imports. Tariffs are often used as a last resort, but the domestic steel industry has reached that point. Rather than attacking the president for his proposal, all Americans should applaud him for beginning to end our nation’s wholesale surrender on trade.

The president’s action is already producing results, as U.S. Steel announced Wednesday that it will restart one of its idled blast furnaces in Granite City, Illinois and create approximately 500 jobs.

I have visited communities deeply affected by steel imports.

Coatesville, Pennsylvania is home to the oldest continuously operating steel mill in the country, and is among the last places in America capable of supplying the military with steel armor plate that meets exacting defense specifications.

In 2007, when the Pentagon escalated the war effort in Iraq, Coatesville’s sister mill in nearby Conshohocken turned its production on a dime to fulfill military orders for the steel needed in mine-resistant, ambush-protected vehicles.

Today, both mills teeter on the brink of collapse. So workers there listened intently when candidate Trump promised to rearrange trade agreements and bring factory jobs back to this country.

The president’s announcement last week of a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum is precisely what he promised. Enacting these tariffs will restore some needed sanity to the global trade in the metals markets, which is in imbalance because of the actions of China’s government.

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Metals See Job Losses as National Security Investigations Lag

Scott Paul Director, AAM

The manufacturing sector grew by 15,000 jobs in January, according to the latest employment data from the Labor Department. Primary metals, furniture, and motor vehicle parts all saw losses.

Said Alliance for American Manufacturing (AAM) President Scott Paul: 

"Factory jobs overall saw growth, but losses in primary metals are particularly striking.

"Soaring steel and aluminum imports have flooded the United States since President Trump announced the Section 232 national security investigations into those sectors, and at least three steel mills in Pennsylvania and Kentucky have announced layoffs.

"Unless the president takes quick action on these investigations, job losses are likely to continue."


Reposted from AAM

New Record Set for U.S.-China Trade Deficit Under Trump’s Watch

Scott Paul Director, AAM

The goods trade deficit with China reached its highest annual level ever according to the latest data from the Commerce Department. The goods deficit with China hit $375.2 billion last year, surpassing the previous record set in 2015. 

News of the expanding deficit comes as American metal workers face more layoffs. In the past year, steel imports from all nations into the U.S. rose by more than 15 percent, and at least three American steel mills announced closures.

Said Alliance for American Manufacturing (AAM) President Scott Paul: 

"I share President Donald Trump’s disdain for trade deficits. I can’t imagine the record goods deficit with China in 2017 is anything he’ll be crowing about. But he can and certainly should do something about it.

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Trump’ State of the Union Address: Trade Rhetoric Heavy, but Not Many Accomplishments to Speak Of

Scott Paul Director, AAM

President Trump, in his first State of the Union address, mentioned both trade and manufacturing policy, but did not delve into specifics despite outstanding trade cases like the Section 232 investigation into steel imports. 

Said Alliance for American Manufacturing (AAM) President Scott Paul: 

"While I’m pleased the president touched on trade and manufacturing in his State of the Union address, rhetoric alone doesn’t translate into policy. For instance, we’ve been waiting since April for relief from steel imports. President Trump could act on the Section 232 investigation tomorrow.

"Meanwhile, China has yet to make a meaningful concession on its state-led mercantilism, despite two meetings between presidents Trump and Xi. This speech won’t change China’s behavior and defend American jobs. Only action will. It’s time for the president’s policies and actions to match his talk."


From the AAM

Trump’s American-made Pipeline Memo May be Gone, but It’s Not Forgotten

Scott Paul Director, AAM

Today marks the one-year anniversary of President Trump’s Made In America pipeline memorandum.

You’re forgiven if you missed the date; the news cycle spins on overdrive these days. But it made a lot of noise in 2017 when the memo was released — and was well-received by the domestic manufacturing sector Trump had championed on the campaign trail.

The memo to the president’s Commerce Secretary, Wilbur Ross, instructed him to:

“develop a plan under which all new pipelines, as well as retrofitted, repaired, or expanded pipelines, inside the borders of the United States … use materials and equipment produced in the United States, to the maximum extent possible and to the extent permitted by law.”

It was a bold, encouraging first step for the brand-new president. But that plan’s due date came and went months ago, without the public seeing its details.

Presumably the president saw it. But what came of it? Would procurement policies be tightened? Would new ones be proposed? The pipeline memo’s disappearance was akin to the third child added (and quickly subtracted) to Married…With Children, or the replacement doctor on the U.S.S. Enterprise in Star Trek: The Next Generation. With little explanation, it has vanished.

Still, we shouldn’t declare it legally dead just yet. A lot of the president’s trade policy decisions, seeded in his first year, are ripe for harvest in 2018 — and the goals outlined in that pipeline memo could be among them.

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