China's Low-Valued Currency Hurting U.S. Steel
U.S. Steel Corp. can make a ton of steel at its Edgar Thomson Works in Braddock and ship it to China for less than the Chinese can make it. But the steelmaker can't take advantage of the price differential because of China's undervalued currency, an executive said Wednesday, according to Pittsburgh Tribune-Review.
The article said "No country more than China hurts American manufacturers by its distorted currency manipulation," said Michael S. Williams, senior vice president of U.S. Steel's North American flat-rolled steel operations.
China's currency system makes the cheaper-priced U.S. Steel product more expensive for Chinese companies, Williams said.
Williams was joined by United Steelworkers President Leo Gerard and Sen. Bob Casey, D-Scranton, yesterday in calling for President Barack Obama to get tough in trade talks with Chinese President Hu Jintao, to stop Beijing from subsidizing Chinese manufacturers and undervaluing the yuan, which hurts American companies and kills jobs.
"We have to have fair and competitive global marketplace," rather than the "job-stealing dumped and subsidized imports," Williams said at a news conference at the United Steelworkers Building, Downtown.
USW President Leo Gerard, whose Pittsburgh-based union represents 850,000 workers in North America, said the U.S "keeps getting inundated by cheap, Chinese products that are subsidized." The result is a loss of U.S. jobs, he said.
Gerard said the Obama administration has been the best administration to enforce trade regulations in the past 20 years, but the existing trade laws are not strong enough.
The USW joined U.S. Steel and other steelmakers in filing numerous trade complaints against the Chinese over subsidies to their manufacturers. In October, the government vowed to investigate the union's complaint that China is providing billions of dollars in subsidies to its renewable energy companies, which has endangered U.S. companies and jobs.
"I think we already are in a trade war, and we're not fighting back," said Gerard.
The trade deficit with China is responsible for 95,700 workers in Pennsylvania either losing their jobs or being displaced from 2001 — when China entered the World Trade Organization — to 2008, according to last year's report from the Economic Policy Institute, a non-profit research center in Washington. The state lost and had displaced the sixth-highest number of jobs in that period, the report said.
In 2008 alone, the U.S. had a $270 billion trade imbalance with China. Unless China raises the real value of the yuan by at least 40 percent, and eliminates other trade distortions, the U.S. trade deficit and job losses will continue to grow rapidly in the future, the institute report said.
The Commerce and Treasury departments have the tools in place to stop China's manipulation of the yuan, Casey said. The senator was critical of the Obama administration's willingness to talk, but not to be aggressive enough in enforcing trade laws when "the facts show currency manipulation."
Beijing denies that it keeps the yuan artificially low.
The Alliance for American Manufacturing, a lobbying group of labor and manufacturers, criticized Obama, saying that China is getting good public relations from President Hu Jintao's U.S. visit without any repercussions for its actions.
"The state visit did little to change the underlying dynamic of the dysfunctional U.S.-China economic relationship," said Scott Paul, executive director.
Congress should not have to pass legislation to address China's currency manipulation, but Casey said he has joined with two other senators in announcing plans to reintroduce the Currency Exchange Rate Oversight Reform Act, which died last year in Congress.
If passed, the bill would give the Treasury Department less flexibility when it comes to citing countries for currency manipulation, and impose penalties on nation's exports.