Politics Now

         As worries increase over a possible recession this year, fair trade groups in Washington are making new calls for greater watchfulness on unfair trading practices by China and other competitors.

          Among these groups is the U.S. Business and Industry Council, which represents small and medium-sized manufacturers. A recent USBIC study shows that American manufacturers are not only losing ground to imports in such labor-intensive areas as toy manufacturing and apparel, but in "advanced" or high-tech industries as well.

       Alan Tonelson, senior analyst for USBIC said the "report shows that, even in so-called high-tech industries, where we're supposed to have a natural advantage, U.S.-based manufacturers can't compete effectively on their home turf.  And if they can't prevail at home, how can they compete effectively abroad?"

        "This report shows that dozens and dozens of our key industries are facing the same kinds of import floods that have pushed the U.S.-owned auto industry close to bankruptcy," Tonelson said.

           The fault, he says, lies with the failure of the Bush administration to deal with currency manipulation by Communist China, theft of intellectual property, and the willingness of American companies to move even their most capital intensive production overseas.

          Another group, the Alliance for American Manufacturing, says China's central and provincial governments "have been boosting China's steel production with massive, hidden energy subsidies that include supports for" coal, electricity and natural gas. These subsidies are illegal under China's commitments to the World Trade Organization.

            With the help of these subsidies, China shipped 5.4 million tons of steel to the U.S. in 2006 --more than double the amount in 2005.

               Overall, China accounted for nearly $26 billion of the U.S. trade deficit last October--a five-fold growth in six years. Peter Morici, the University of Maryland economist, says China still devalues its currency by 50 percent.

             Despite this, the Bush administration refuses to cite China as a currency manipulator, an action that would bring about sanctions against U.S. imports of Chinese goods.

           Morici says "apologists for Chinese currency and trade practices point out that U.S. consumers benefit from less expensive products at Wal-Mart and other purveyors of subsidized imports.But these bargains come at high cost--we are saddling our children with debt to foreigners and slashing economic growth."

           So far, the presidential candidates of both parties have said little about China's behavior, about trade deficits, or possible American responses. The exceptions are Rep. Duncan Hunter, R-Calif., and Rep. Ron Paul, R-Texas.

            Both these men have finished far behind the leaders in the Iowa caucuses and the New Hampshire primary, indicating the American people are not much interested in economics. Are you?

                    --Douglas Turner