Halt currency abuse to boost U.S. manufacturing
In the past decade, America lost 5.7 million manufacturing jobs and 15 of 19 manufacturing sectors dwindled. Although many manufacturers are reshoring to the U.S., a consistent glaring hindrance to American manufacturing is the illegal trade practices and currency manipulation of China and other countries.
The artificially low currency of these countries has accounted for a trade deficit in every year since 1976. To protect diplomatic ties with currency manipulators, many lawmakers apathetically view these illegal practices as taboo to change.
“It is imperative that we take action because they (currency manipulators) don’t believe there are any consequences for violating trade law,” said Robert Baugh, executive director of the AFL-CIO Industrial Union Council.
Although the World Trade Organization has veto power over the U.S. Court of International Trade, according to Alan Tonelson of the U.S. Business and Industry Council, “Complex WTO cases make it easier to use the U.S. trade law system.”
One solution is initiating a very specific trade case against a manipulator using the U.S. trade law system.
“Once the U.S. wins one argument, the same trade case will be applicable to many other cases, serving as a drumbeat across the illegal trade practices through precedent,” said Baugh.
To deter unlawfully subsidized exports, the U.S. should use countervailing duties to neutralize the subsidy. Lawmakers can promote American manufacturing through the juxtaposition of accumulating trade cases and countervailing duties to inhibit currency manipulators. The reduced trade deficit will revitalize the manufacturing sector and create more middle class jobs.