China illegally subsidizes its state-run businesses

(Photo: AFP/Getty Images )

To say industry is important to Indiana would be an understatement: More than 484,300 Hoosiers work in the manufacturing sector, and it contributes nearly $84 billion to our gross state product annually.

But manufacturing in Indiana — and the United States — competes in a global marketplace. And that marketplace is a rough-and-tumble arena where U.S. goods aren’t doing well. America ran a $456 billion trade deficit in 2013, $318 billion of which came from trade with China alone.

This doesn’t happen naturally. China illegally subsidizes for its state-run businesses to encourage these deficits. And it manipulates its currency to make its goods cheaper and competing American goods more expensive.

China has been doing so for years, despite promises to reform. In the decade after the United States helped China join the World Trade Organization in 2001, we lost 2.4 million middle-income factory jobs. According to the Economic Policy Institute, Indiana lost nearly 56,500 jobs as America’s trade deficit exploded during that same period.

A new report from the Economic Policy Institute says that ending currency manipulation would do a lot. It would cut our nation’s budget deficit by $266 billion and create up to 5.8 million American jobs, including 152,600 in Indiana. It’s important to note that Indiana ranks No. 2 in the amount of jobs that can be created; second only to Wisconsin by share of total employment. Surely that should be enough motivation to act on this unfair trade practice.

There are bipartisan bills in the U.S. House of Representatives (HR 1276) and the U.S. Senate (S 1114) that would give American manufacturers damaged by currency manipulation the ability to hit back at foreign governments that won’t keep their hands off the scales.

Currently only two members of our state’s congressional delegation – Rep. Pete Visclosky and Rep. Andre Carson — and one senator, Joe Donnelly, have signed on. To the rest of our lawmakers: Manufacturers expect you to do something when another country cheats at trade. These businesses and their workers are counting on your support.

Brett Voorhies

president, Indiana AFL-CIO