tv Washington Journal CSPAN April 9, 2016 2:32am-3:15am EDT
for the third prize winner. c-span dixons a things to our cable partners. every reading this month, be sure to watch one of the top entries before washington journal. next, a discussion about the state of manufacturing in the united states. from washed injured, this is 40 minutes. -- from washington journal, this is 40 minutes. joining us now is scott paul, the president of the alliance for american manufacturing. he is joining us today to discuss the state of the manufacturing sector in react --
and react to the most recent trade numbers. guest: it is a pleasure to be with you this morning. host: who do you represent? guest: aam is a partnership between the united steelworkers union and some domestic manufacturing partners. it is kind of unique, as you washington,e, in where it is business and labor working together on common public policy goals. we are nonpartisan, we have been around nine years. our mission is to strengthen the opportunity for americans to have factory jobs. host: can you give us an theview of what you think state of manufacturing and trade is in the united states right now? guest: it is a good question. as always, the truth lies somewhere in the middle of what the extremes say it is.
some say there is a manufacturing resurgence and a lot of jobs are being restored. that are others who say manufacturing has been completely destroyed. that is also not true. if you look over the last year, the news has been pretty shaky for manufacturing. it has been buffeted by massive changes underway in china. the dollar is overly strong, which has an impact on our ability to export. manufacturing job growth over the last year has been very weak. we have lost about 40,000 jobs over the last year. if you take it back to the end of the great recession, we have added 847,000 manufacturing jobs , which sounds like a great number. and it is a pretty long streak of job growth. but then you take it back further to the beginning of the great recession and manufacturing is the only session -- sector that has not
gained all the jobs back that it lost during the great recession. the rest of the private sector has recovered about 160% of the jobs. manufacturing has only recovered about 40% of the jobs lost during the great recession. the real challenges for american manufacturing, which is always cyclical depending on business cycles, is started with the onset of china coming into the world trade system. at that point, in about 2000, since that time, the united states has shed about one third of its manufacturing jobs. 5.5 million jobs. that is something that is felt in a lot of communities. as we have heard during the election cycle, these issues keep coming up. host: we are talking to scott paul from the alliance for american manufacturing. viewers can add to the conversation by calling in. we have a republican line, (202)
784-8001. the democratic line, (202) 748-8000. our line for independents, (202) 748-8002. we also have a special line if you work in manufacturing --(202) 748-8003. let's talk a little bit about andu.s. trade deficit here take a look at some of the numbers from that. inwidened to $47 billion february. that is up 2.6% from january. exports increased by 1%. that is the first increase since september. imports were up 1.3%. $225 billion. despite a drop in oil imports. at 2015 trade deficit stands
$540 billion, an increase of six point two percent. what do those numbers tell us? guest: a lot of people look at that and my eyes glaze over, what do while these numbers mean? it translates into jobs at the end of the day and our ability to generate new jobs for the american economy. the trade deficit, as a primer for listeners, is the difference between our exports and our imports. if we have a deficit, it means we are importing more than we are exporting. look, this happens from time to time. the united states was running trade deficits for a while because we were importing a lot of oil. since the onset of more global competition, we have seen the trade deficit in manufacturing goods go up. what it means is products that used to be made here for this market, a lot of those are being made overseas. there are a lot of factors that lead to that. some of it is the value of the doctor.
it actually makes our exports more expensive overseas. a strong dollar is a great deal for a tourist trying to book a room in europe. you are going to get a great deal. it is a good deal for wall street. for exporting firms, it is a real challenge. we also face an array of competitors that are supported by their governments. we have a massive trade deficit with china. , itstate is heavily engaged is subsidizing and protecting its firms. it is not really run on a free market system. china is deficit with over $360 billion per year. that is an exceptionally mindnumbing amount. a lot of stuff we used to do here is being done in china.
host: what can happen on the american side? here to stemone that increase? guest: it is a really good question. it is important to know that public policy plays a key role in a couple of different ways. first, there is monetary policy. 1990's, we have had a policy to keep our dollar strong. one of the drawbacks is that it makes our exports less competitive. if we have a more competitively valued dollar, that would probably help. is our trade policy. we need to continue to try to open markets overseas because 95% of america's customers are outside of our borders. at the same time, we still have the richest consumer market in
the world and we should make access to that conditioned on playing by the rules. we have a number of trade partners who don't necessarily play by the rules. china is one of those. finally, what can we do domestically to strengthen our competitiveness? we need to make sure that the tax code encourages jobs coming back to the united states. president obama has taken actions on in versions, but there are other things we can do. we need to make sure that our infrastructure is in good shape. that dramatically impacts the competitiveness of manufacturing. our infrastructure makes a terrible grade from the civil engineers who looked at it. inneed a stronger investment that. we need to invest in the skills and training of our workforce. it used to be that a manufacturing job might not take much more training than a high school degree. that is not necessarily the case
anymore. we need to make sure we have a system in place that will allow young people who want this opportunity to be skilled, to get the training they need to fill these jobs. host: we are talking with scott paul about manufacturing and trade. our first call on our republican line is from rick in ohio. am i saying that right? thank you. what is your question? caller: my question is about imports from china. tools we import all these that have harmful metals on them and on the back of them it says "may cause cancer" -- we should start making tools in the states that are controlled by epa policies. that is my question. guest: it is a good question. i think rick points out something that is frustrating to
a lot of people. we see a lot of recalls from made in china products. the system for regulating health and safety standards certainly is not what it approaches in the united states or western europe. there are some tools that are made in the united states. apon, they do face very stiff competition from chinese competitors that are aided by the fact that they are not necessarily complying with the same kind of regulations that we take for granted as protecting consumer safety and andenvironment and workers clean water and air here. they also receive subsidies from their government and some protection. it needs to be a priority to congress and the white house to push back on this. , i think that there has been a reluctance to
do that in any systematic way and that has had an impact on the choices that consumers have in terms of everything from hardware to toys to closing. host: can you talk a little bit about how currency manipulation effects the trade deficit? guest: sure. currency manipulation is a tool that some governments use to make their exports artificially more competitive or to protect their currency. a central government will by buying up federal , holdes or treasury bonds hundreds of billions of dollars of u.s. debt -- another signal
is that that country is running a persistently high trade surplus. if you look, you see something that china and japan have done that. this matters because these countries are not supposed to do it. the international monetary fund, to which they belong, as well as the united states, says you should not be doing this. says, you should not be doing this. .ur own domestic law says it unfortunately, it is dependent upon two things. the administration needs to designate a country as a currency manipulator. ,resident obama has not done it but president bush did not do it either. there is a lot of criticism to be shared there. laws,our domestic trade you can file a trade case for relief which comes in the form of usually
but you can't do it for currency minute relation yet and so that is a change in law that we have been seeking for some time. there's a lot of support for it, but unfortunately, we have almost gotten over the hurdle a couple of times come up but there is always one body at the last minute who has held back and that has been a challenge. host: you talk about the designation as traded never later. what would that do it the united states does designate a country? guest: if they are designated as a currency minute later, it would trigger a set of negotiations and shift a set of priorities. towards begin correcting this behavior for it there could be sanctions available if a country did not or have acompliance plan to come into compliance.
again, the reason it matters is where losing jobs for no other reason than other countries are intervening in a way that distorts the free market and our government instead of pushing back, has done nothing. you see that frustration coming through a lot i think there are reasonable people who suggest we push back without starting a trade war and there are other countries that stand up much more than the united states. lot of to wait until a and theas been done systems come much too late to grow jobs back. host: we're talking to scott aboutrom aam manufacturing and trade.
he is a trade lobbyist for the afl and cio. our calls are randy -- is ready. caller: good morning. host: good morning. caller: i'm calling from the classroom right now. classroom.pan in the questions. ask a few my students right now are learning about the great depression and herbert hoover's response. tariffserrorists -- hurt or help the economy? and second, my students are newly arrived immigrants to the united states and they have heard a lot of talk from donald
trump about how the united states is being beat up on foreign trade. to theou speak candidates? i personally support john kasich because of what he did with ohio's deficit. how he turned the economy around. could you please address the impact of tariffs on the american economy and who you think would be the best candidate for the next president ? thank you very much. guest: thank you for the question, randy. i'm glad your students are learning about history and current events as well. musical onbig broadway. he was the father of american industrial policy.
225 years ago he wrote a report to congress on manufacturers. he and present washington discovered that america did not make much of anything. they depended on france or smuggling to get a lot of their equipment. tariffs thathave would not be too high or too low. we would develop our infrastructure and we would depend on a flow of recently thesed immigrants to fill manufacturing jobs. this is an economic philosophy that did not become a reality until after the civil war. tariffs have been a part of u.s. policy for a while. as paul krugman has said, their
on accelerating or deepening the great recession is overstated. he has probably studied this more than anyone else. i want to make clear i'm not likeng for a 45% tariff donald trump is or anything like that. just to give you an example of where tariffs have come into play in recent policy, there is a type case on steel -- of steel that is working its way through the system right now. president obama's a ministration someministration has set of these tariffs at over 200% which sounds like a lot. president reagan intervened in two ways, to save harley-davidson motorcycles facing competition from japan
grandso to create a bargain on currency. even in modern days, you have seen the use of tariffs as economic purposes being a valuable thing. which presidential candidate do i support? i am gladpartisan, so these issues are being raised. waysl say that i think the donald trump has raised them does not do anybody service. there are serious economic reasons why you would want to change our trade policy cap -- a couple of degrees. clinton had a manufacturing roundtable in new york and bernie sanders talks about trade agreements in every speech he gives on the campaign trail.
john kasich is the governor of a manufacturing state and he has talked about the need to enforce trade loss. in my syrians has not been particularly helpful on these issues, was up in wisconsin saying how he would stand up for american trade policy and the blue-collar worker. respond to this during the election and the key is actually changing policy once they get into the white house. randy,ur next call from our democratic line in maryland. randy, are you there? ok, we will move on to jim. he is calling on our independent line from wisconsin. what is your question? tax.r: my question is on
tariffs are very tricky and they can be dangerous. what if they just eliminated the corporate income tax on manufacturing? on, appropriate taxes could be applied. at the beginning, we should completely eliminate the upper income tax on and factoring. i think it's an interesting question. my concern about completely eliminating the corporate income taxes is that you lose an incredible revenue stream. forink that taxes manufacturers who are in global competition and kind of a unique -- let's say retail stores and wall street is not
come about manufacturing can be done anywhere. you have to look at the right incentives to invest in your workforce. you have to look at the right incentives to modernize your plant. you can do that through the tax code. , most of the cut benefits would go to wall street or the retail sector that is not face this kind of global competition. i think this target approach works much better. i will say that the other thing that we have to take a look at his most of the rest of the world has something called refundable exports. it is something that our exporters face, where there is no discount in the tax code for their exports. other nationry they are in competition with, the exporters are getting this
type of discount which provides them with some type of an advantage. host: let's take a look at what the "new york times" said. he writes trade deficits are not inherently good or bad. they can be either depending on circumstances. what's more, eliminating the trade deficit wouldn't, on its own, make america great again, as trump suggests. and trying to do so could mean giving up some of the levers of power that the united states get its way and international policy. china -- and want with north korea in a way to mitigate some of its nuclear goals and so we won't push back on trade policy.
you see this uprising. you see this -- these political revolutions on the right and left. i think because of this type of dynamic. exports, and that is another fancy way of saying trade deficit or trade surplus, we -- if we balanced our trade accounts and i think there is a moreo do that by investing in energy to messick lead that would reduce our energy imports. if we had policies that would boost our exports, that would bring our imports down a little bit. insteadntage would be
of struggling to get 2% growth every year, our economic growth 3%the top would be between and 4%. they would be a lot more people getting jobs and if you letting .- accumulating wealth unfortunately, the benefits of the trade deficit right now are accrued mostly to wall street or to our foreign policy. americans,le-class who want good paying jobs. host: our next call from the republican line, mary jane. you are on with scott paul. outer: i wanted to find what areas of manufacturing are going to be promoted in this latest agreement -- trade
agreement. guest: that's a good question. tpp, which is a trade agreement between the united states and about 11 other countries including mexico and canada, who we already have a trade agreement with. the biggest would be japan, from an numberia -- an economic scale. this agreement has been reached. legislationt inc. has not been introduced and would need to be passed by congress. there is a debate about this. donald trump says he opposes it. ted cruz, hillary clinton, and bernie sanders all oppose it. i don't think john kasich has spoken out on it recently.
when you look at the potential benefits for manufacturing, frankly, they are limited sector.of the tech even the analysis that is used by the administration to make the case for the tpp, it is an by an appropriate think tank here if their .stimat -- for manufacturing specifically, they estimate the tpp would increase our manufacturing and trade deficit by about $55 billion and the estimate keeps going up. .irst it was 120,000 that is precisely because these
countries have policies that lie outside trade agreements that would make it difficult for us to export and make it easier for them to import. their conclusion is we would lose a lot of manufacturing jobs. the question is, is this worth pursuing? -- a may be a tiny benefit tiny economic benefit, but a pretty big challenge for manufacturing as we move forward. host: let's talk about expansion of manufacturing in other countries. this report from the "wall street journal" shows that a new carsry in mexico for small --
how does this expansion effect manufacturing and trade? guest: that is a very good question. that has been in the news. the auto industry, first of all, has been a bright spot in manufacturing since the end of the great recession. actually work.t three car companies stabilize. made a lot ofave investments in the united states. they are selling a lot of cars because people have been holding onto their cars for a long time. gas prices are low. and also because interest rates are low. you can get an interest rate on , sow car for 1% or less it's a great time to borrow to do this. now, when it comes to locating production, you are seeing some
shifts of smaller car production to mexico. there is less of a margin -- of a profit margin of these cars and that is driven by japan's currency policies. the primary competition for the detroit three in the united states are these japanese sedans. the japanese government heavily intervenes. even though it has risen and the last couple of days, over the last year and a half, it has been going down and down. for no other reason, but this currency differential, the japanese automakers make or money per car -- make more money per car than the detroit three. importanterall it is to note there is a lot of investment in the u.s. auto
manufacturing sector. i worry about its future once the auto replacement has run its course and interest rates begin to rise again. i think we need to find ways to make it competitive. it is not simply a factor of wages and mexico are less than they are in the united states. there's a lot to go into it. with policy shifts, we could make it more competitive. host: we're talking about manufacturing and trade with scott paul, president of aam. honor democratic line, we have bruce from georgia. -- on our democratic line, we have bruce from georgia. --if it has no quality,
it should not be sold in america. 90% of stuff we buy today, it won't last a year. my wife has a brand-new car and the shifter cable fell off. it just deteriorated within five years. that shouldn't be. ok let's let scott paul respond. guest: it is something i call the consumer paradox. .mericans love to bargain everyone likes to think they are getting a good price on something. when they go to the store, the purchase is often satisfying in the short term and so this is something all of us face. you can get the great bargain now or pay a little more for something that is going to last longer and your cost over five
years is going to be less. there's a lot of complex consumer behavior that goes into this. i think the immediate gratification that everybody wants -- and again you see this on wall street. goinge as consumers, i'm to get that bluelight special or and then if you invest in quality, you're actually going to be spending less over five years or something. thatuy a pair of shoes cost $10, they might fall apart in a year. of that.course periiod you might [no audio] [no audio] [inaudible]
-- goods in particular , if you're looking for consumer electronics or clothing, good luck finding an american-made product. that there is a cost differential that makes it really difficult to manufacture in the united states and i'm not someone that says we have to make everything here. we need global trade. i do think there are some advantages you see that effect the competitiveness. labor rates, there is a big differential. it is going to be hard to compete with that right now. we don't want to compete with that necessarily because there
would be a race to the bottom of wages, but there are some other factors that we discussed that i think our government could address. host: on our independent line, rene is calling in from san jose, california. you're on with scott paul. caller: good morning. considered in the middle class, i more in the lower class and i'm struggling with zero credit and i would -- was idea wouldhat your be if consumers have more ability to buy things and go on payment plans. i do most of my shopping online. i usually get the bargain like
the previous caller was saying. i was wondering if a person that myself one of to start my own business, we all need credit. play into thet consumer and people trying to develop it? think we are talking about a dual challenge here. creating jobs that allow for more disposal income so you're not living paycheck to paycheck and there is a virtuous cycle there. when you have more manufacturing jobs, you have more of that disposable income. they tend to pay better than the private sector. regards to credit, i think that is a complex topic. that we'rehing
struggling with. there are a lot of people who der-banked and it is a challenge that we have seen consistently. i think it is important to address that. if we were able to find pathways -- and this is an example i like to use. $1give a millionaire million, they're probably not going to buy another car. personre able to find a and give them a livable wage, car and going to buy a that has extraordinaire benefits for the american economy. host: in today's "new york u.s. isit says the control.ina's internet
it says the u.s. trade officials have for the first time added china's system of internet filters and blocks to an annual list of trade impediments. the entry says that over the last decade, the limits have posed a significant burden. can you talk to us about this cyber factor in trade? documente underlying it is referring to is about this , but it is important. i'm glad that he pointed this out. talks about the dilemma that a lot of our tax companies face, like facebook and mark zuckerberg. he is eager to get into china. he is learning chinese and spending a lot of time there.
but, what is the trade-off for a that wants to do business in china? contact,to censor your surrender your intellectual property? there are a lot of companies that have to decide on these trade-offs. you've seen some companies that have made the right call, which is we are not going to sacrifice our principles. you see others that have been thinkg to go along and i it is a moral dilemma that a lot of these companies face, but as this article points out, it also has economic consequences because there is real, untapped potential among chinese consumers who tend to like american brands to some extent. i think they want access to some of that and our government will give that to them. from chadnext call is d.c.ing from washington,
on our independent line. i just wanted to get your opinion on america's trade situation with canada, given the that isn presidency going to be coming, do you see an area of concern that we are taking a step forward or backward with that change in presidency? thank you. guest: that's a very good question. candidate in many ways is our largest trade partner. that are a lot of goods flow back and forth between our borders. i talked about the auto industry earlier and its supply chain is heavily integrated into north america. that means there's a lot of influence going back between the united states, canada, and mexico. trudeauthink the
government is going to radically alter its policy towards the united states. i know one thing we would like to see is for canada to open up system a little more than it is right now. i often hear canadian complaints . our laws are very mild compared to some of the restrictions canadian provinces have on procurement. i think that is a small issue, but overall i don't anticipate there is going to be much of a shift in these relationships and i think the trudeau government is supportive of the tpp. i don't view the u.s.-canada relationship as being a major trade impediment as we move forward.
japan are china and probably much more key to our economic success right now. host: scott paul, president of the aam. >> on the next washington journal, david cooper and james sherk discuss our recent increases in the minimum wage at state and local levels have impacted local economies and businesses. and christian weller looks at whether americans are efficiently saving for retirement. you can join the conversation on facebook and twitter. live at 7 a.m. eastern on c-span. next, proposals to eliminate federal student aid programs and to replace them with direct federal funding to the state. with higherscussion education leaders and scholars was hosted by new america.