One of the biggest jobs bills to clear the Senate this session — one that could create or save two million jobs at no cost to taxpayers — passed with strong bipartisan support more than 200 days ago.
Now, it’s time for the House of Representatives to act.
And when countries like China don’t play by the rules, it drives American companies to go out of business, and it harms our economy. U.S. exports are more expensive, and cheap imports flood our markets, ultimately costing American manufacturing jobs.
Too many jobs.
Last year, the U.S. trade deficit with China reached a new record, of $295 billion. In April alone, the deficit was $24.5 billion, nearly one billion each day. A report released last year estimates that our trade deficit with China, exacerbated by Chinese currency manipulation, has caused the loss of more than 2.8 million American jobs since 2001 — including more than 1.9 million manufacturing jobs. Ohio alone has lost more than 100,000 of those manufacturing jobs just as a result of the Chinese trade deficit.
Currency manipulation provides an unfair subsidy to Chinese exports — of up to 40 percent, by most economists’ estimates — and represents the most protectionist policy of any major country since World War II, according to economist C. Fred Bergsten of the Peterson Institute. And when American manufacturers try to sell their products to China — our nation’s fastest growing export market — they are hit with the same percentage in what amounts to an unfair tariff. The cost advantages enjoyed by Chinese manufacturers cost American jobs.
That’s why I introduced the bipartisan Currency Exchange Rate Oversight Reform Act of 2011. This bill, which cleared the Senate by a 63-35 vote, would ensure a fair and level playing field for American manufacturers.
The centerpiece of the bill, which I worked on with Sens. Olympia Snowe (R-Maine), Charles Schumer (D-N.Y.) and Lindsey Graham (R-S.C.), treats currency manipulation as an unfair subsidy and an illegal trade practice — providing our government with the tools to impose duties on these products flooding our markets.
It’s clear that Chinese currency manipulation undermines American manufacturing and our very own job-creating efforts. Last year, a report by the Economic Policy Institute showed that addressing currency manipulation could support the creation of 2.25 million American jobs.
Jobs can be created when trade laws are enforced. In Ohio, for example, following the International Trade Commission (ITC) ruling in 2010 in response to a petition by Ohio seamless steel tube producers, V&M Star announced it would build a new facility in Youngstown, Ohio, creating 700 jobs and more than 400 good-paying permanent jobs.
Unfairly subsidized imports harm our ability to innovate and compete. Allowing Chinese currency manipulation to also be treated as an export subsidy would allow more industries — from autos to clean energy — to petition the Commerce Department and the ITC to stand up to unfair foreign imports. It could mean jobs for a number of industries, and no more foot-dragging by our government when it comes to standing up for American manufacturing.
Our bill also includes new ways for the administration to combat currency manipulation. By improving oversight of currency exchange rates, the bill would ensure that the Treasury Department properly identifies countries that undervalue their currencies and act accordingly. It would also establish new criteria to identify countries manipulating currency — and trigger tougher consequences for those that engage in such unfair trade.
Our bipartisan bill is a jobs bill. It would help level the playing field for Ohio businesses and manufacturers and help spur our economic recovery.
Workers and manufacturers have endured years of talking and no action. Now, it’s time that the House stands up to the Chinese, and helps fight the war waged on American manufacturing.
Brown is the senior senator from Ohio and serves on the Senate Appropriations Committee.