Cracking down on China’s unfair trade

The argument that “free” trade will create more jobs here in the U.S. stands in stark contrast to the facts.  Since the 2001 trade deal with China we’ve lost 6 million manufacturing jobs here at home.

The calls for “fair” trade are growing.  Our manufacturers find it almost impossible to compete with foreign manufacturers that freely pollute and pay only dollars per day to workers toiling in substandard  conditions.  These foreign manufacturers are often subsidized by their governments in violation of World Trade Organization rules. 

Former South Carolina Senator Fritz Hollings wrote a great opinion editorial in 2010--“Wake up, American, or lose the trade war--that is a must read to understand the importance of fighting and winning trade wars instead of retreating as the U.S. does. 

In his State of the Union address this year President Obama called for tougher trade enforcement to give our manufacturers a more level playing field to compete.   I expressed my hope that he meant what he said and that we should support him.

This week the Obama Administration’s Department of Commerce announced that new tariffs were coming for Chinese solar panels.  The story from The Hill is below. 

Let’s hope there is more of this willingness to fight for our manufacturers to come.

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The Hill
March 21, 2012

US imposes tariffs on Chinese solar imports

By Andrew Restuccia - 03/20/12 03:46 PM ET

The Commerce Department said Tuesday it will impose tariffs on Chinese solar panels imported into the United States.

In a preliminary decision, the department found China is unfairly subsidizing certain solar panels. As a result, the department ordered U.S. Customs and Border Protection to impose tariffs of 2.90 to 4.73 percent in the form of cash deposits or bonds on Chinese solar panels imported into the United States.

The finding is a major victory for a group of U.S. solar panel manufacturers that alleges China is flooding the U.S. market with underpriced solar panels and subsidizing its solar industry in a way that violates World Trade Organization rules.

The companies filed a petition with the Commerce Department and the International Trade Commission last year requesting the tariffs.

“Today’s announcement affirms what U.S. manufacturers have long known: Chinese manufacturers have received unfair and WTO-illegal subsidies,” said Steve Ostrenga, CEO of Helios Solar Works in Milwaukee, Wis., in a statement. Ostrenga is a member of the Coalition for American Solar Manufacturing, which supports imposing tariffs on Chinese solar imports.

“We appreciate the Commerce Department’s hard work in bringing these subsidies to light, and we look forward to addressing all of China’s unfair trade practices in the solar industry,” he said.

The trade case has caused a rift in the solar industry, with power generators and others who have benefited from low-price panels raising concerns that the petition will drive up costs.

But Rhone Resch, president of the Solar Energy Industries Association, a solar industry trade group, said in a statement that the tariffs will likely not have a “material impact on the U.S. market.”

SEIA, pointing to the decision, called on companies to launch “global and regional dialogues on trade and competitiveness and the role of government in encouraging development of the global solar energy industry.”

The Commerce Department said Tuesday it will make a final decision on the tariffs in June. The International Trade Commission will then need to finalize its finding that Chinese solar imports harm the U.S. solar industry before a final order can be issued. An ITC decision is expected in July.

The Commerce Department is separately weighing whether China is flooding the U.S. market with underpriced solar panels. The department will make its preliminary determination on May 17.

http://thehill.com/blogs/e2-wire/e2-wire/217091-us-imposes-tariffs-on-chinese-solar-imports

White House hears calls for action

I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won’t add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust.—President Barack Obama, State of the Union 2012

A lot of people, including me in my blog on Monday, have been calling for the President and Congress to take strong action to stop the housing foreclosure crisis not only to keep hard working American’s in their homes but also to revive the housing construction industry.  Last night President Obama indicated that he has heard our message and will challenge Congress to force financial institutions to allow “responsible” homeowners to refinance at today’s rock bottom interest rates with “no questions asked”.

 That’s great news.  But now we need to see the details of the plan.  How are “responsible” homeowners defined?  We need to include as many homeowners as we can, not just ones current in their mortgages.  And we also should include investment properties not just owner-occupied housing.  It hurts the economy and property values just as much went a rental unit occupied by a working American is kicked out of the house they rent due to foreclosure. 

The bigger issue is how do we stop the big banks from killing the idea in Congress?

On Monday I said, “It is time for these private banks to give back to the country for bailing them out.  The profits they’re reeling in now wouldn’t exist if it wasn’t for the taxpayer.”  Last night the President said the program “will give banks that were rescued by taxpayers a chance to repay a deficit of trust.”

 But I doubt that our calls for the big financial institutions to grow a conscience will be effective.  That's why we must all push hard against the upcoming lobbying effort to stop this plan.  Tell your member of Congress to support the President on this issue.

A needed message in State of the Union address

One of the issues we are expecting to hear about in President Obama’s State of the Union address tomorrow night is the housing crisis.  Economists tell us that the nation’s economy won’t dramatically improve until the housing market stabilizes and demand for new homes gets back on track.  That’s how important the housing construction industry is to creating jobs.

But that industry won’t be coming back for a while if there is no effective action taken by the federal government.

As I pointed out last October, according to an analysis by McClatchy Newspapers, at that time there were 2.2 million homes whose owners had received initial foreclosure notices or notices of default but hadn’t yet been foreclosed on.  Another 1.9 million properties at that time had owners who were 90 days or more behind on their payments but hadn’t yet been served with foreclosure notices.  That’s 4.1 million homes that are soon to be put into the foreclosure bucket.  To put that into perspective the official number of all houses for sale in the nation is only 3.5 million.

The drum beat for the President and Congress to take strong action to solve this crisis to boost our economy has been growing.  Last week 27 Congressional Democrats from California asked for a meeting with the President after meetings with top Administration officials such as Tim Geithner failed to produce needed action.

For some time I’ve been advocating that we should “muscle the private banks and Fannie and Freddie to do everything in their power to keep the current home owners in their homes by letting them refinance at today’s rock bottom rates (no questions asked) and, if necessary, reducing the principle they owe.” 

There is a push in the House to have the government-controlled Fannie and Freddie write down mortgage principles for owners deep under water.  Federal Reserve Chairman Ben Bernanke wrote this month that “it might be worth the expense to lose money now in an effort to shore up the books of the government-sponsored enterprises for the long term while helping the economic recovery.”

But what about the big private banks of JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, and Ally Financial?  The states’ attorneys general have been working since the fall of 2010 to have these financial giants help the homeowners they victimized by their earlier foreclosure papers robo-signing scandal.  However this agreement is expected to compensate only about one million homeowners with principle reductions.  That will be too late for many and a drop in the bucket to really help our economy.

It is time for these private banks to give back to the country for bailing them out.  The profits they’re reeling in now wouldn’t exist if it wasn’t for the taxpayer. 

A call for principle reductions and the lowering of interest rates for both public and private mortgage holders in trouble should in the President’s speech tomorrow night.  If he really wants to get the economy rolling sooner than later, this is the course of action we must follow.

Repeal this!

President Obama received rousing applause Tuesday night in his State of the Union address when he called for bipartisan agreement on repealing one part of the Affordable Care Act:

“We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses. “

All members of Congress stood up to applaud because, while the public in general might not have understood the specific issue, Congress and many small businesses understood.

The 1099 part of the ACA requires a business to report payments made for over $600 for goods and services to the IRS using a 1099. This idea started in the last Bush administration to uncover income not being reported by businesses to avoid taxes. The concept found its way into the ACA as a way to generate about $19 billon more dollars to help pay for the provisions in the Act.

The burden for a small business, if this 1099 provision should be allowed to go into effect in January of 2012, would be tremendous. Plus, there are serious doubts that the IRS could handle the amount of information that would flood the agency for it to actually be used to identify businesses owing taxes.

Democrats, Republicans, independents, the President….everybody wants to repeal this 1099 provision. Democrats tried to put the repeal in the extension of the Income Tax Cuts legislation during the recent lame duck session but were rebuffed by GOP negotiators.

The biggest problem (other than partisan politics) in repealing the measure is money. Where does Congress come up with the $19 billion it is projected the government would lose in taxes so as not to increase the deficit?

This week Senators Reid, Baucus and Landrieu introduced a legislation to repeal the 1099 reporting requirement. So where is similar legislation from the majority party in the House?