China's Export Boom: Latest Trade Deficit Numbers. Free Trade and Deepening Deficits

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1 Contact AMTAC! American Manufacturing Trade Action Coalition AMTAC Phone: (202) th Street, NW Suite 410 Washington, DC Fax: (202) Visit our website at: Free Trade and Deepening Deficits Trade with NAFTA Countries (in billions) billion MEXICO Net Change of 46.4 billion billion CANADA Net Change of $51.8 billion billion billion Source: US Department of Commerce San Diego Union Tribune May 1, 2005 Latest Trade Deficit Numbers U.S. trade deficit in 2004 was $617 billion, an increase of 24% over 2003 s deficit of $561 billion. For Jan-Feb 2005:? Trade deficit was $127.2 billion for Jan-Feb 2005 Already $28 billion above the Jan.- Feb.2004 s record of $99.5 billion.. Puts the country on track to reach a trade imbalance topping $750 billion.? Autos, Trucks and Parts trade deficit was $137 billion in 2004, $10 greater than in 2003 deficit.? Aerospace trade surplus peaked in In steady decline since Source: MBG Information Services US Trade in Advanced Technology Traditional Large Surplus now Equally Large Losses China's Export Boom: Iron, Steel and Fabricated Products MBG Information Services 1

2 China's New Iron/Steel Surplus Iron, Steel and Fabricated Products MBG Information Services US Global Trade in Autos/Trucks/Parts: Unprecedented Losses AMERICAN MANUFACTURING TRADE ACTION COALITION Telephone: (202) Fax: (202) Colorado After the Bubble: Sharp Loss of Good Jobs Colorado Key Votes On Trade Morocco FTA (2004) Australia FTA(2004) Singapore FTA (2003) Senator Allard (R) YES Senator Allard (R) YES Senator Allard (R) YES Senator Campbell (R) YES Senator Campbell (R) YES Senator Campbell (R) YES CO 1 DeGette (D) YES CO 1 DeGette (D) YES CO 1 DeGette (D) YES CO 2 Udall (D) YES CO 2 Udall (D) YES CO 2 Udall (D) YES CO 3 McInnis (R) YES CO 3 McInnis (R) YES CO 3 McInnis (R) YES CO 4 Musgrave (R) YES CO 4 Musgrave (R) YES CO 4 Musgrave (R) YES CO 5 Hefley (R) YES CO 5 Hefley (R) YES CO 5 Hefley (R) NO CO 6 Tancredo (R) YES CO 6 Tancredo (R) YES CO 6 Tancredo (R) NO CO 7 Beauprez (R) YES CO 7 Beauprez (R) YES CO 7 Beauprez (R) YES Chile FTA (2003) Fast Track (2001) Africa/Caribbean Basin (2000) Senator Allard (R) YES Senator Allard (R) YES Senator Allard (R) YES Senator Campbell (R) YES Senator Campbell (R) NO Senator Campbell (R) YES CO 1 DeGette (D) YES CO 1 DeGette (D) NO CO 1 DeGette (D) YES CO 2 Udall (D) YES CO 2 Udall (D) NO CO 2 Udall (D) NO CO 3 McInnis (R) YES CO 3 McInnis (R) YES CO 3 McInnis (R) YES CO 4 Musgrave (R) YES CO 4 Schaffer (R) YES CO 4 Schaffer (R) YES CO 5 Hefley (R) NO CO 5 Hefley (R) YES CO 5 Hefley (R) YES CO 6 Tancredo (R) NO CO 6 Tancredo (R) YES CO 6 Tancredo (R) YES CO 7 Beauprez (R) YES 2

3 Key Trade Votes Continued MFN with China (2000) WTO (1994) NAFTA (1993) Senator Allard (R) YES Senator Brown (R) NO Senator Brown (R) YES Senator Campbell (R) NO Senator Campbell (D) NO Senator Campbell (D) NO CO 1 DeGette (D) YES CO 1 Schroeder (D) YES CO 1 Schroeder (D) YES CO 2 Udall (D) NO CO 2 Skaggs (D) YES CO 2 Skaggs (D) YES CO 3 McInnis (R) YES CO 3 McInnis (R) NO CO 3 McInnis (R) YES CO 4 Schaffer (R) YES CO 4 Allard (R) YES CO 4 Allard (R) YES CO 5 Hefley (R) NO CO 5 Hefley (R) NO CO 5 Hefley (R) YES CO 6 Tancredo (R) NO CO 6 Schaefer (R) NO CO 6 Schaefer (R) YES Factory Closings/Layoffs Mean: Decline in tax revenue for federal, state and local governments. Budget crises. Increase in social costs for unemployment welfare, training, food stamps, crime, etc. Multiplier effect in reverse. Every manufacturing job gained or lost creates or destroys 3 jobs. Loss of utility revenue, tax revenue, health insurance raises rates for survivors. Share of Global Outsourcing. Total Contract Value Manufacturing Cost of Dell Printer Rest of the World Japan 7% 2% Other Europe 13% Britain 20% France Germany 4% 13% Source: The Economist Print Edition, March 5, 2005 United States 41% Total Cost Tooling Costs Materials Labor $ $ $11.96 $11.50 $ $ $ $ Dell Model # 5100CN Printer (250,000 units) USA China The cost of manufacturing in China is 2/3 that of the United States. Source: Current Analysis, Inc via Electronic Engineering Times. January 24, GRAPHIC 7E7 Dreamliner Nuts-and-Bolts Savings 3

4 National Debt $412,000,000,000 Budget deficit, 2004 $7,600,000,000,000 National debt (7 trillion) U.S. government past liabilities paid for with borrowed money still outstanding ($20,000 for every man, woman, and child) $33 trillion national debt for future U.S. gov t liabilities already incurred - pensions, healthcare, SSA ($100,000 for every man, woman, and child) Source: U.S. Comptroller General Foreign Central Bank Currency Reserves (In Billions of Dollars) Taiwan South Korea EU China Figures for China, and EU are as of 12/31/04; other countries are as of 2/28/05. Sources: the bank of Tokyo, Mitsubishi; Bloomberg Japan Instruments of Debt - Mortgages Year-end debt levels, in billions Ratio Soars of Household Liabilities to Assets Fannie Mae - Federal National Mortgage Assoc $ $ $962 Freddie Mac - Federal Home Loan Mortgage Corp $ $ $745 Federal Home Loan Banks $231 $592 $741 Sources: Wall Street Journal, Ofheo, Federal Home Loan Banks Personal Liabilities Soar vs Disposable Income Declining Dollar Means: Rising global price of commodity inputs like oil, steel, copper and grain hurt America s global competiveness. Rising interest rates in the U.S. Rising cost of consumer imports. Impact heaviest on fixed-income retirees. 4

5 94.2% of FDI is Merely to Acquire The Global Assets of US Firms Foreign Ownership Means: FDI to Acquire Existing US Businesses Choice of suppliers in the hands of foreign owners less likely to Buy American. Profits, technology gains, client base belongs to foreign owners. Repatriated Profits add to our current account deficits. FDI to Establish New US Businesses Foreign interests gain political/economic power in U.S. policy making process. I.R.S. Says Americans Income Shrank in 2001, 2003 The New York Times Top Ten Categories of Expected US Job Growth 2002 through 2012 Registered nurses* Postsecondary teachers* 623, ,000 ACTION STEPS Connect the dots between trade policy and the steep losses to the U.S. manufacturing base, and spread the word. Retail salespersons Customer service representatives Food preparation Cashiers Janitors and cleaners General and operations managers* Waiters and waitresses Nursing aides, orderlies, and attendants 596, , , , , , , ,000 Find trustworthy sources of expert advice on trade-related legislative and policy issues that impact your company. Network with other manufacturing companies and local institutions to increase you influence and political clout. Sensitize candidates for public office on all levels about the significance of their position on trade issues. Seven of these only require on-the-job-training. All are in non-tradable sectors. Source: U.S. Department of Labor 5

6 Actions Steps Continued... Meet with Congressmen and Senators as a group. Be prepared with a specific agenda and very specific requests. Follow up persistently until a result is achieved. Get your employees registered and facilitate their vote. Rally your local communities institutions to join the effort. Engage the local and national media to gain attention to the issue. ACTION AGENDA DDemand a moratorium on Free Trade Agreements, especially with countries that maintain significant advantages in terms of low labor and production costs, while having little purchasing power for U.S. products. Preserve U.S. Industrial Tariffs as part of ongoing World Trade Organization trade negotiations, the Doha Round. Strengthen the current Defense Department Buy- American purchase requirements, known as the Berry Amendment and expand them to other national security agencies, namely the new Homeland Defense Department. Insist upon tax reform that rewards true domestic manufacturing and removes tax credits and incentives for the overseas outsourcing activities of U.S. corporations. ACTION AGENDA Cont. Strengthen U.S. trade remedy law against predatory import competitors. Anti-Dumping, Countervailing Duty laws, China Surge Safeguards, Sections 301 (steel) and 201 and action against currency manipulation by China are not being vigorously pursued. Strengthen Country of Origin labeling requirements so that consumers know where their products are made. Work on Buy- American or consumer boycott campaigns. Insist that State and Local governments Buy American. Hold candidates responsible for their votes in favor of free trade. Election results trump all other agenda items. AMTAC Tool Chest Plant Poster Voting Drive, Registration Drive Billboards, Media Campaign Candidate Questionnaires Buy American Initiative State Committees Examining Trade Policy Product-Specific Safeguard Petitions - China Organized Group Visits to Legislators Fielding Candidates Running on Trade Policy 6

7 Stop Sending Jobs Overseas Contact AMTAC! American Manufacturing Trade Action Coalition AMTAC th Street, NW Suite 410 Washington, DC CHANGE TRADE POLICY NOW! Register... Vote! Phone: (202) Fax: (202) Visit our website at: 7