Thursday, October 6, 2011

Schumer Bill Targeting China's Trade Practices Ready To Pass Senate

Chinese unfair trade practices and currency manipulation have resulted in .loss of over 160,000 jobs in New York state since 2001; Legislation to move in senate this week.

Chinese companies who can submit lower bids due to unfair trading practices, have outbid New York companies on projects; according to a recent report, an estimated 61,000 jobs in New York City, 23,000 on Long Island, and 27,000 in the northern suburbs have been lost due to unfair Chinese trade practices.

To fight back against unfair trade practices, Schumer introduced bi-partisan legislation to crack down on China’s currency manipulation. He expects the bill to pass in the Senate this week. The bill faces a less-certain future in the House of Representatives, where Speaker John Boehner, R-Ohio, has opposed it, saying it could ignite a trade war.

Schumer said the issues with China are currency manipulation by methods that undervalue the Chinese yuan versus the dollar and "paying workers next to nothing."

The bill seeks "tough penalties against China or any other country that undervalues their currency," he said. "If we level the playing field, New York manufacturers can compete fairly and keep jobs local."

"The U.S. government could put tariffs on imported goods from China that compete with goods here when the currency is misaligned, which it is," he said. "No longer will Uncle Sam be Uncle Sap when it comes to China," Schumer said.

 Speaking on Schumer's conference call with reporters was Brett Wallace, vice president of Brewster Plastics in Brewster, Putnam County, which employs 45 people doing injection molding of parts for industries.

 Setting up for a contract involves expensive tooling, and he said he just lost a job to a Chinese competitor who had a tooling bid of $19,000 competing with Brewster's cost of $49,000. Wallace said $19,000 "doesn't even cover the raw material to start production of the tooling, much less to fabricate it."

China is subsidizing its exports by $450 billion a year. It prints its currency and sells it for dollars, a technique to keep the yuan artificially cheap along with exports. U.S. economists believe that Schumer's bill would help.

An Economic Policy Institute report that said the U.S. lost 6 million manufacturing jobs in 10 years, 1.9 million of them due to Chinese imports and currency manipulation. New York's loss was 161,414, by Schumer's calculations.

By Peter Coyne