Manufacture This

The blog of the 188bet苹果版Alliance for American Manufacturing

This is disappointing.

We've been closely monitoring trade talks between the United States and China,and we've gone on record to note that there are acouple of ways things could go.两国要么达成一项历史性的协议,要求中国遵守全球竞争规则,要么这项协议将是徒劳的,making a few superficial changes but mostly maintaining the status quo.

Well,现状得分1分。

Reutersreportsthat"U.S.negotiators have tempered demands that China curb industrial subsidies as a condition for a trade deal after strong resistance from Beijing.""

Instead,谈判代表们把注意力集中在他们认为更可行的问题上,金宝搏苹果版including ending forced technology transfers,strengthening protection of intellectual property and opening up China's markets.

Look,addressing technology transfers and intellectual property is vital,美国谈判者专注于他们是正确的。Ditto for further opening up China's market.

但通过在这些会谈中放弃工业补贴问题,the United States is giving a green light to China to continue to cheat the global trading system and put countries and companies that play by the rules at a disadvantage.

Case in point: Steel.

President Trump put a 25% tariff on steel imports in April 2018 in response to surging foreign imports.Now,you've probably heard about those"第232节”tariffs — they've garnered a lot of criticism from theAcela Corridor布景——但谈话中经常缺少的是,尽管特朗普咆哮着,there was a very legitimate reason why he issued those tariffs.

China's government heavily subsidizes its steel industry,中国的钢铁产量远远超过其自身的用途。But Chinese companies need to do something with all that extra steel,and so they dump it onto the global marketplace at rock-bottom prices,far below what companies operating in a free market can afford.

This gives China a huge advantage — its heavily subsidized companies don't have to worry about making money,因为他们的业务由政府补贴。As a result,中国钢flooded the global market,and a whole lot of that subsidized steel made its way to U.S.shores.

At one point,the flood of cheap Chinese steel imports exceeded the amount U.S.factories produced in an entire year.Tens of thousands of U.S.工人被解雇了,and dozens of U.S.钢铁设备关闭。

The Obama administration recognized this problem andissued tariffs on specific steel productswhile also urging China to stop subsidizing its industry.China even pledged to cut its steel production!(Spoiler:China did not.)

Enter Trump,世卫组织决定通过发布25%的关税来发送信息。Since then,,things have stabilizedfor the American steel industry,leading to an uptick in domestic production,12,000 new jobs,and $18.2 billion in announced investments.

But the underlying problem remains: China is still subsidizing its steel and other key industries.

The tariffs might have stopped the flood of steel imports,但这只是暂时的解决办法,something United Steelworkers President Leo Gerardpointed outin March during the annual Congressional Steel Caucus hearing:

"中国产能过剩的根本问题继续困扰着世界市场,是一把笼罩在我们行业和其他市场经济体未来的人口宝剑。不得中断232关税,and they should be coupled with renewed efforts to reach multilateral disciplines on overcapacity,largely fueled by China which,十月,had the highest production levels on record.""

Which brings us back to the U.S.-China trade talks.

As AAM's own Scott Paul recently wrote,Trump isfacing a brief window in history当他有机会做一件大事的时候。The domestic economy is doing well,他与中国的贸易战所带来的冲击相对较小,其中不仅包括对钢铁的行动,还包括价值2500亿美元的中国货物进口。all things considered.

Trumpfancies himself作为世界上最伟大的交易撮合者,and his willingness to play hardball brought China to the table.现在他需要坚持到底。

There's a lot at stake in this deal,特朗普团队有权要求更多的市场准入和强制知识产权,along with things like stronger labor standards for Chinese workers and stricter environmental controls.

But the deal will be incomplete if China is allowed to continue to subsidize its key industries,as now appears to be the case.If this is how we end up,it will turn out that Trump isn't much of a dealmaker after all.