Why are 23 million Americans unemployed, underemployed, or so discouraged that they have given up looking for work? Why are 47 million Americans – including 1.7 million Ohioans – on food stamps? Why have median household incomes dropped more than $4,500 since President Obama took office?
The American economy is complex and, no doubt, a variety of factors are in play. But we should not discount the role of China’s unfair trade practices and President Obama’s inability to address these barriers.
Since President Obama took office, as Mitt Romney has rightly been pointing out, the United States has lost over half a million manufacturing jobs, while China has seen a 25 percent increase in its own manufacturing. Indeed, in 2011, China became “the world’s top manufacturing country,” surpassing the United States, which had been world’s largest producer of goods for more than a century.
How did this happen?
A large part of the answer is that the United States has acquiesced to China’s unfair trade practices and policies. China’s discriminatory and distorting industrial policies prevent U.S. companies from competing on a level playing field. These longstanding problems include heavily subsidizing Chinese companies; blatantly stealing U.S. intellectual property rights; discriminatory regulations; a lack of regulatory transparency; artificially valuing their currency; and many other barriers. President Obama has not done enough to compel China to address these serious problems.
China does not have a freely convertible currency. What that means is that the Chinese government sets the rate at which the renminbi is exchanged for the dollar. By setting the rate lower than the actual market rate would be, goods manufactured in China become cheaper than goods manufactured elsewhere.
But China has signed international agreements that forbid it from engaging in this kind of manipulation, and the United States government possesses tools to discourage China from doing what it has been doing. One such tool is to have the United States Treasury Dept. declare China a “currency manipulator.”
On seven occasions, President Obama could have declared China a manipulator. In semi-annual reports whose publication is required by law, the Obama administration has repeatedly found that China’s currency is “substantially undervalued” with the dollar. But even so, on each of the seven occasions, the President has declined to act. And repeatedly, the Obama Administration has missed the legal deadline to submit those reports to Congress.
China’s many unfair trade practices have gone on too long and have proved too costly to American manufacturers and American workers. These practices cost American jobs and slow our economic recovery.
Fortunately, there is a different way to approach this problem. It requires bolder leadership. It requires a willingness to confront China. Mitt Romney has outlined a plan that will bring our trade relations with China back into balance. He does not want a trade war, as he has repeatedly said, but that does not mean we should accept a trade surrender.
If China refuses to adjust its currency to a market rate, he will move forward, where President Obama has not, and finally declare China a currency manipulator. He understands that Chinese companies are stealing our technological secrets and pirating our trademarked and copyrighted goods. He will demand that this will stop or the consequences will be more costly than the benefits of such theft. He will combat the cyberwarfare that Chinese corporations, backed by their government and its military, are waging against our enterprises, private and public.
In short, he will approach China from a position of strength and with a willingness to exercise American diplomatic and economic power. That will be a welcome contrast with the current ineffectiveness of President Obama. We only have a few more months to wait.
U.S. Congressman Pat Tiberi is currently running to represent the 12th Congressional District of Ohio in the U.S. House of Representatives. The newly redrawn district will be made up of Delaware, Licking and Morrow Counties and portions of Franklin, Marion, Muskingum, and Richland Counties. Congressman Tiberi serves on the U.S. House Ways and Means Committee which had jurisdiction over tax, trade, Medicare, and Social Security issues.