When in Doubt, Spin It Out - The Spin and Lies of Manufacturing

The Obama administration, with much fanfare, announced a WTO complaint filed against China on auto parts.

The Obama Administration is committed to protecting the rights of nearly 800,000 American workers in our $350 billion auto and auto parts manufacturing sector.

Export subsidies are prohibited under WTO rules because they are unfair and severely distort international trade. China expressly agreed to eliminate all export subsidies when it joined the WTO in 2001. China benefits from international trade rules and must in turn live up to its international obligations.

While this action is long overdue, the realty is this administration has been complicit with China, refusing to label them a currency manipulator. Additionally the Obama administration has passed even more bad trade deals and is working on a mega bad trade agreement, the TPP.

While Chinese auto part imports have surged 25% in the last two years, so has the overall manufacturing trade deficit. Below is the percent change from a year ago in the manufactured goods trade deficit. This trade deficit has increased 14% from one year ago and 26.3% from two years ago.

manufactured goods per chg 1yr

In other words, a complaint about auto parts is almost cherry picking in comparison to all of the problems we have, especially with China.

As of July 2012, we have the highest monthly trade deficit in manufactured goods, $63,93 billion. Below is the monthly manufactured goods trade deficit, not seasonally adjusted.

manufactured goods monthly def

We can see the temporary drop in the deficit was not due to the United States finally exporting more manufactured goods, instead global trade collapsed. Exports were at an localized low, but imports imploded even more.

manufactured goods monthly imports and exports

Since the start of the Great Recession, the United States is still down 1.77 million jobs in manufacturing alone. Below we can see the great decline of manufacturing jobs since 1980. The China trade agreement was signed into law in October 2000.



Additionally, a host of manufacturing jobs are continuing to be offshore outsourced. From Business Week's Reshoring of Jobs Looks Meager:

For every company Obama praises for coming back home, there are others still shipping jobs out of the country. Honeywell International (HON) in Acton, Mass., plans to eliminate 23 positions by yearend when manufacturing of the company’s stainless steel products moves to Nanjing, China. Boston Scientific (BSX) let go about 1,100 workers when the company moved production of its medical stents from Miami to Costa Rica.

The White House stresses that manufacturers have added 495,000 jobs since January 2010, when factory employment bottomed out at almost 6 million below the 2000 level. Nearly 40 percent of those jobs were lost to other countries, either directly or because consumers chose imports over American-made products

The trade deficit with China simply continues to grow. To date, the China trade deficit has grown 8.73% from a year ago. While even the Census touts increased manufacturing exports, what most do not point out is the manufacturing trade deficit has widened as well as the reason manufacturing exports have increased is due to the global trade collapse of the great recession being over. Below is the annual manufacturing goods trade deficit and we can see to date, we are at record highs.

manufactured annual deficit

Obama's WTO trade complaint annoucement is just in time for the election. Large amounts of auto manufacturing jobs are in swing states, such as Ohio, Wisconsin and Pennsylvania. It's no surprise then, the Obama administration is taking some action, now. We believe the election is already over, so we're stuck with Obama, Redux. Pretending they are doing anything but enabling more bad trade deals, more offshore outsourcing and more U.S. worker displacement through foreign worker importation programs will only lead to more disappointment for the millions desperately needing a job.

The above graphs use the published SITC data from the Census trade statistic release, table 15. The Census publishes graphs based on NAICS data which is not available to the public. We taxpayers supposedly paid for and thus are supposed to have access to government statistics. Yet the Census is worse than Amazon.com, trying to get $300 per year, just to access trade data. Do the little guy a favor and file a complaint. How are we supposed to know what's really going on without access to accurate, detailed and up to date detailed trade statistics?



Please investigate affordable retail goods Made In Canada

Robert, I ws stunned to find, on a road trip across the long northern shore of Lake Superior, dozens of examples of shoes and clothing Made In Canada sold alongside items made in offshore sweatshops AT THE EXACT SAME PRICES, PRECISELY COMPARABLE TO PRICES IN THE US, which means we CAN make shoes and clothing in the US if the government weren't owned and operated by the ilk of the Bain capitalists protected by the Obama administration, and every administration since Reagan and his fascist friends co-opted the Democrats to go along with supply-side wreckonomics in 1981, when manufacturing was first allowed, nay, encouraged to leave the country virtually untaxed and unopposed by our now-multinationally-funded American-hating traitors occupying Congress, to be imported back here from slaves laboring in dirt cheap factories at the highest profit levels known to pigkind, so far.