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Barbs Exchanged Over Trade

posted on September 21, 2012


Hello, I'm Mike Pearson. As the nation moves into its fourth year of economic recovery there are some signs things are improving.

Recently released Census Bureau data shows nearly 40 million people moved to new homes last year -- about 12 percent more than the year before.

According to the National Association of Realtors, existing home sales in August were the strongest in nearly two years rising 7.8% last month.

New home construction is also on the increase. The Commerce Department reported nearly 30 percent more homes were started last month when compared to a year ago.

Wall Street moved slightly higher on the news but retreated at the end of the session.

Despite the somewhat encouraging economic announcements, Americans seeking unemployment benefits fell only slightly last week to a seasonally adjusted 382,000.

As jobs and related manufacturing moved overseas in the past few years, trade disputes have followed in their wake. The United States and China clashed on trade policy this week as both countries filed challenges with the World Trade Organization, or WTO. 

Barbs Exchanged Over Trade

The U.S. alleges that China is illegally subsidizing exports in their automobile and auto parts sectors – putting American parts manufacturers at a competitive disadvantage and encouraging the relocation of production to China.

According to the Obama administration, employment in the U.S. auto parts sector has shrunk by roughly half over the past decade, while U.S. imports of auto parts from China has increased seven-fold.

Another case brought against China in July also is expected to escalate. The U.S. accuses the Asian country of imposing unfair duties on more than 80 percent of American autos exported to China.

China filed a World Trade Organization case of its own Monday, challenging U.S. anti-dumping measures on billions of dollars of goods complicating tenuous trade relations in a time of weakening global demand. 

According to the Chinese Ministry of Commerce, the U.S. measures being challenged cover 24 types of products worth $7.2 billion.

Mitt Romney: "Now the president may think that announcing new trade lawsuits less than 2 months before the election will."

 China and the U.S. weren’t the only ones trading jabs this week on trade policy. The economic issue has become a “flashpoint” in the upcoming presidential race between incumbent Barack Obama and Republican challenger Mitt Romney.

Both have accused each other of supporting policies that move U.S. jobs overseas.

Mitt Romney: "If I'd known that all it took to make him take action was to run an ad citing his inaction on China's cheating, I'da run one a long time ago."

Mitt Romney, Democratic Nominee: “If I’d known that was all that it took to take action was to run an ad citing his inaction on China’s cheating I’d have run one a long time ago.”

The Obama administration has, in fact, filed a series of WTO cases challenging not only China’s trade policy on autos, but on rare earth metals and other goods.

Campaigning Monday in Ohio -- a swing state with a large manufacturing base -- the president announced the new WTO challenge and counter-punched his Republican challenger. 

President Obama: "We've brought more trade cases against China in one term than the previous administration did in two. And every case we've brought thats been decided, we've won!" 

President Obama: “We don’t need folks who during election times suddenly are worrying about trade practices, but before the election are taking advantage of unfair trading practices.”


Tags: agriculture auto parts Barack Obama China jobs Mitt Romney overseas trade United States WTO

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