Foreign Predatory Practices Are Destroying American Industries

When you have a $763.6 billion trade deficit, much of which is with one country that unfairly subsidizes many of its industries what do you do? You fight back.

This is the story of the United States and China, a story of one way free trade, unfair government subsidies by the Chinese, and the American paper industry that has suffered from it. And this is a story of the US government finally starting to wake up.

China has been subsidizing its key industries for years in total violation of WTO agreements, giving them an unfair predatory edge and making it near-impossible for US industries to compete.

John Engler, president of the National Association of Manufacturers, was quoted in a recent CNNMoney article talking about the subsidy practices of the Chinese, “Many manufacturers tell me that Chinese products sell for less than the cost of the raw materials in the product, meaning that they are likely being subsidized.”

China wielded its unfair trade advantage in the open access it had to the US market, which imported 20% of its paper products in 2005. As such, American industries including Dayton, Ohio based NewPage took notice and demanded that a tariff be put on the estimated $224 million of paper goods from China coming into the US, to make the trade fair.

U.S. Commerce Secretary Carlos Gutierrez announced at the end of March that a tariff of 10.9 to 20.35 percent would be put on “coated-free” paper coming from China into the US. The tariff aims to ‘level the playing field’ between the unfair practices in China towards the US and reverses a 23 year old non-tariff policy on cheap goods coming from non-market countries, CNNMoney reports.

More importantly this is a first step. American industry can not compete with unfairly subsidized industries from countries like China. The result of further inaction would see US industries being put out of business due to unfair predatory foreign competition as well as a continued growing dependence on foreign creditors purchasing American debt to finance the booming trade deficit.

Contact your local Congressman and let them know that American industries, just like the paper industry, are worth protecting from unfair overseas competition. America has to get beyond just talking tough about China and implement a tit-for-tat policy plan that reprimands China for their unfair actions.

Any new policy will be tough to get off the ground however, due to China's influence via their US debt holdings, their powerful lobby within the business community, and 1.2 trillion in US currency reserves- by which they can buy any American company that gives them much competition. As a result of this, America at every level is finding it extremely difficult to compete. Ask your congressmen what they are going to do about it.

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