The Obama Administration continues its misguided focus on poorly negotiated trade deals, like the Trans-Pacific Partnership (TPP), while ignoring market distorting factors that are harming U.S. economic growth.
Magnetization, an iron ore producer in Minnesota, announced that it will layoff workers. Cliffs Natural Resources, another Minnesota iron ore producer, will shut down a plant. Alcoa is idling or closing two plants in Washington and New York states due to a recent thirty percent price drop for aluminum. The steel industry in the U.S. is operating at a fraction of its full capacity. However, Alcoa's production in China and elsewhere will continue.
Foreign trade cheating and mercantilism are the biggest threats to good jobs and growth in the US. Chinese industries owned or controlled by the ruling communist party continue increasing output while selling at subsidized prices. The overcapacity and predatory pricing strategies are putting efficient and competitive US plants out of business.
If the free market caused these plant closings and layoffs, it would not be a policy issue. But subsidies, predatory state-owned companies, currency manipulation and other tactics by foreign governments are distorting U.S. markets and harming our economy and communities. If importers are found to violate current trade laws, they evade the remedy by falsely labeling future shipments or disguising the origin of the shipment by trans-shipping through another country.
The U.S. Trade Representative's (USTR) office refused to resolve these modern trade issues despite repeated requests by American producers. Instead, the USTR focused upon building a massive global governance system and inconsequential tariff reduction in a 5,544 page TPP document.
Congress needs to reject the TPP and, instead, require the administration to deal with modern mercantilism and engage in a comprehensive strategy to build, grow and protect a wide array of diverse and productive supply chains in the US.