One of the biggest threats to our industry and the U.S. economy in 2012 will be the increased use of trade barriers and the greater cost for U.S. companies to trade with the world.
Politicians view our stagnant economy as a problem that can be fixed only within Washington, while they fail to look at the real issues.
The Currency Exchange Rate Oversight Reform Act of 2011, although perhaps well-intentioned, is one example. First, this isn’t a jobs bill. It will do nothing to create jobs in America and in fact more jobs will likely be lost if this bill is passed. The bill, seeking to punish the Chinese through increased duties on their exports to the U.S., will serve as a tax on Americans who rely on low-cost consumer goods. Let your mind stroll the aisles at Wal-Mart, Kohl’s or Macy’s and consider how much is really made in China.
The U.S. manufacturing base has enjoyed increased exports due to the weak U.S. dollar, but China already has responded with threats of retaliation should this bill pass. For the employees of U.S. manufacturers selling to China, their jobs and those of second- and third-tier suppliers are now threatened by the supporters of this bill.
Supporting this bill will be politicians choosing to take the easy way out and give the impression that they are looking tough in the face of China’s currency manipulation, when in reality they will be hurting their constituents and America. Politics and special-interest groups shouldn’t be what drive this issue and future issues affecting trade.
I hope all of us as stakeholders in our economy do more in 2012 to engage our elected officials and prove to them that international trade is part of the solution and should not be the target.