Unfair Chinese Automotive Tariff Equalization Act

Mr. Speaker, I would like to submit in its entirety for the Record a letter from the United States Business and Industry Council at the conclusion of my remarks, but I will be reading from parts of this letter.

Mr. Kildee and myself have introduced H.R. 4808, the Unfair Chinese Automobile Tariff Equalization Act. I am going to read several paragraphs from this letter that I will submit. It is a letter to me from Mr. Kevin Kearns, President of the United States Business and Industry Council.

``Dear Representative Jones: On behalf of the 1,500 U.S. companies comprising the U.S. Business and Industry Council, I am writing to express our strong support for H.R. 4808, the Unfair Chinese Automobile Tariff Equalization Act.

``Equalizing U.S. and Chinese tariffs on passenger cars, as the bill would require, is an important and greatly overdue step toward restoring equitable competition in both U.S.-China trade and global automobile trade. Such competition in turn is essential to restoring the health of the U.S.-owned automotive sector, which makes us such a large share of our economy and which has undergirded the American middle class for so many decades.''

I am going to skip on with paragraphs, Mr. Speaker. Again, I have asked that this entire letter be submitted for the Record.

``In fact, according to the latest data available, imports have grabbed two-thirds of the domestic U.S. auto market in 2004, up from 50 percent just 7 years earlier. Small wonder that Ford and GM are downsizing as fast as they can.

``Much of the blame clearly falls on incompetent trade policies, many of course supported by Detroit itself in a triumph of shortsightedness. Presidents of both parties have signed numerous free trade agreements over the years. But despite the promises made to sell them to an increasingly skeptical public, they have manifestly failed to open foreign markets for U.S. producers, or even to limit predatory foreign commercial practices such as subsidizing, dumping, and exchange rate manipulation.

``In fact, the trade flows clearly shows that the main new accomplishments of these trade agreements have been to help U.S. and foreign-brand automakers alike supply the American market from low-wage export platforms like Mexico.

``As symbolized by the ludicrously unequal auto tariffs left in place by U.S. negotiators of China trade deals, U.S. policy on automotive trade with China is speeding down the same road and will likely produce the same results. The United States still runs a small trade surplus in autos with China, but since 2000, Chinese auto exports to the United States have outpaced the United States vehicle exports to China by a four-to-one ratio.

``The Unfair Chinese Automotive Tariff Equalization Act can begin reversing this process and help put the U.S.-owned auto industry and the domestic manufacturing base as a whole back on the path of high- wage growth not low-wage stagnation. And the time to pass it is now, before the Chinese export drive takes off.''

Mr. Speaker, the close on this letter is, ``We strongly urge prompt House and Senate passage, and we will do everything we can to help make it the law of the land.''

Mr. Speaker, I also want to mention that the Chair of the caucus known as the House Automotive Caucus has urged Members of this House to support 4808 that is signed by Mr. Kildee and Mr. Upton, and we are asking just fairness in this trade issue. That is all we are asking, is that the Congress send a message to the trade negotiators that we in this Congress want our manufacturers and our workers to be treated fairly. That is all we are asking in 4808 is to send a message.

If we could get this bill to the floor of the House and pass this legislation, we would say to our trade negotiators that we need you, the trade negotiators, to make sure that we have fair trade as it relates to the American worker and the American manufacturers.

With that, Mr. Speaker, I want to thank you for this time, and I want to close by asking God to please bless our men and women in uniform, and to ask God to please bless the families and to ask God to please bless America.

United States Business

and Industry Council,

Washington, DC, Mar. 9, 2006.

Congressman Walter Jones,

House of Representatives,

Washington, DC.

Dear Representative Jones: On behalf of the 1,500 domestic

U.S. companies comprising the U.S. Business and Industry

Council, I am writing to express our strong support for H.R.

4808, Tbe Unfair Chinese Automotive Tariff Equalization Act.

Equalizing U.S. and Chinese tariffs on passenger cars, as

the bill would require, is an important and greatly overdue

step toward restoring equitable competition in both U,S.-

China trade and global automotive trade. Such competition in

turn is essential to restoring the health of the U.S.-owned

automotive sector, which makes up such a large share of our

economy, and which has undergirded the American middle class

for so many decades.

For many years, America's trade performance in passenger

cars has been nothing less than disastrous. Despite the

proliferation of foreign transplant factories throughout the

country, the United States ran a $101.8 billion trade deficit

in autos and light trucks in 2005. U.S. imports of these

products last year, which totaled more than $126 billion,

represented fully 84 percent of two-way global U.S. vehicle

trade.

In fact, according to the latest data available, imports

had grabbed two-thirds of the domestic U.S. auto market in

2004, up from 50 percent just seven years earlier. Small

wonder that Ford and GM are downsizing as fast as they can.

Much of the blame clearly falls on incompetent trade

policies (many, of course, supported by Detroit itself in a

triumph of short-sightedness). Presidents of both parties

have signed numerous free trade agreements over the years.

But despite the promises made to sell them to an increasingly

skeptical public, they have manifestly failed to open foreign

markets for U.S. producers, or even to limit predatory

foreign commercial practices such as subsidization, dumping,

and exchange-rate manipulation.

In fact, the trade flows clearly show that the main new

accomplishments of these trade agreements have been to help

U.S.- and foreign-brand automakers alike supply the American

market from low-wage export platforms like Mexico.

As symbolized by the ludicrously unequal auto tariffs left

in place by U.S. negotiators of China trade deals, U.S.

policy on automotive trade with China is speeding down the

same road, and will likely produce the same results. The

United States still runs a small trade surplus in autos with

China. But since 2000, Chinese auto exports to the U.S. have

outpaced U.S. vehicle exports to China by a four-to-one

ratio.

Yet it is vital to realize that the development of China as

an automotive export platform has only just begun. Vehicle

makers from all over the world (Japan, Europe, the United

States, and China itself) are building far more auto

production capacity in the People's Republic than the Chinese

market can possibly absorb. And since China desperately needs

to create jobs to keep politically explosive unemployment in

check, Beijing has no interest in preventing or even slowing

this production glut. Indeed, to reduce joblessness, it has

every interest in encouraging overproduction and exporting

the surplus. The United States, the world's largest single

national automotive market, and the most open major market by

far, is the most promising destination.

Chinese auto makers, who frequently steal U.S. know-how

outright or force their U.S. partners to transfer it, have

already announced plans to sell hundreds of thousands of

vehicles in the United States by 2012. And foreign auto

makers in China (including U.S. multinational companies) will

jump on the export bandwagon as well.

The bottom line is that, without dramatic changes in U.S.

trade policy, China's inevitable emergence as an auto export

power will either further undermine U.S.-owned, U.S.-based

auto production, or it will permit such production to survive

only on a greatly reduced scale, and with a dramatically

lower pay structure.

The Unfair Chinese Automotive Tariff Equalization Act can

begin reversing this process, and help put the U.S.-owned

auto industry and the domestic manufacturing base as a whole

back on the path of high-wage growth not low-wage stagnation.

And the time to pass it is now, before the Chinese export

drive takes off.

We strongly urge prompt House and Senate passage, and we

will do everything we can to help make it the law of the

land.

Sincerely,

Kevin L. Kearns,

President.

Mr. Speaker, on March 1, Mr. Kildee of Michigan, a Member of Congress, joined me in a bill, H.R. 4808, which would prevent imports of passenger cars from China until the United States and Chinese tariffs on these items are equal.

Mr. Speaker, I think we all know that our trade deficit with China is well over $200 billion. We all agree that we live in a world where we have to work with each other and trade with each other. The problem is that under the current agreement, these cars that will be coming in from China put us at a disadvantage, our workers and our car companies.

Let me just share with you that if we ship a car from America to be sold in China, the Chinese Government slaps a 28 percent tariff on American-made cars. If those Chinese cars come into America, we charge them a 2.5 percent tariff on their cars. That is not a level playing field.

I think China has enough advantages, quite frankly. They manipulate their currency, violate intellectual property rights, utilize heavy equipment, government subsidies, pay their workers just pennies a day, and they do not have to worry about the labor and environmental standards that Americans must abide by. The tariffs just give China another unfair advantage, an advantage that threatens the job of every worker in the United States auto industry.

I hope that my colleagues on both sides of the aisle will join us in this fairness issue. That is all this is about, fairness, because our workers work hard to produce a quality product. When we send it to China, they, again, put a 28 percent tariff on our cars going to China, while we only put a 2.5 percent tariff on passenger cars coming to America.

Mr. Speaker, there is something else that we fail to realize. With that $200 billion trade deficit, in The Wall Street Journal this week it said: ``China defends outlay to increase by 17.4 percent, the most in 4 years.'' The Chinese are making money off the American people, and they are taking that money and, in many cases, they are putting it into their military.

Now, I am not so concerned about China and America going to war, but I do know this: China is trying to build one of the strongest militaries we have ever seen in this world, and what they want to do is to dominate Southeast Asia.

What Mr. Kildee and I are asking for is just a simple matter of fairness. If we are going to sell their cars, let us charge them the same tariff they are going to charge us to sell our cars in China. I would hope that my colleagues, both Republican and Democrat, would join us in this effort. This, again, is nothing but an issue of fairness.

In fact, the Economic Policy Institute has said that since 1989 through the year 2003 we have lost 1.5 million jobs to the Chinese. Here, again, on this floor tonight I am announcing H.R. 4808, a bill introduced by a Democrat and Republican, that says that we need to charge the same tariff for American cars going to China as Chinese cars coming to America. We should all pay the same. That is a simple matter of fairness.

So tonight, Mr. Speaker, I shall be speaking on this issue quite a few times, but I will tell you that we need to be aware of what is happening to the jobs that have been going overseas, and particularly those jobs going to China. So I hope tonight that my colleagues will look at the letter that is signed by Mr. Kildee and myself asking our colleagues in the House to join us on H.R. 4808. All it is is a tariff fairness issue.

I will close by saying this again: American cars that go to China to be sold have to pay a 28 percent tariff, Chinese cars coming to America later on this year will pay only a 2.5 percent tariff. That is not fair to the American workers.

Mr. Speaker, I ask God to please bless our men and women in uniform; to please bless their families; and, God, please continue to bless America.

Madam Speaker, recently Congressman Dale Kildee and myself have introduced H.R. 4808.

We both are very concerned about the jobs that continue to go overseas, ``outsourcing'' some people call it. And with this bill what we are speaking to is the tariff situation that will exist between China and America.

In 2008, the Chinese will be selling in America Chinese cars that are made in China. These cars obviously will be made by people who make in many cases less than $1 an hour, $1.25 an hour, no benefits, but yet they will be selling these cars in this country.

What Mr. Kildee and I have done, along with other Members in both parties, is to say, we want to see fairness in this arrangement. If we try to sell an American car in China today, tonight, tomorrow we would pay 28 percent tariff. When the Chinese sell their cars in this country in the year 2008, they will pay 2.5 percent.

What this bill does is simple. It says fairness, fair trade. What is good for the Chinese economy should be good for the American economy. What is good for the American economy, let it be good for the Chinese economy. But for this country, we have lost so many manufacturing jobs in my own State of North Carolina. Since NAFTA was enacted, we have lost over 200,000 manufacturing jobs. Just the past 4 years, between 2001 and 2005, we have lost 2.9 million manufacturing jobs in this country.

This Nation cannot and will not remain strong if we do not have a manufacturing base. So this bill that Mr. Kildee and I have put in is very simple. I will repeat it again and then I will close very shortly.

That is, if we are going to accept Chinese cars to be sold in this country in 2008, and right now they will pay a 2.8 percent tariff while we are selling American cars in China and American cars have a tariff of 28 percent.

Madam Speaker, I will tell you this, I think the American people are tired and really kind of fed up, if you will, with the fact that we have not done a better job in this Congress, both sides, of trying to protect the American worker. This really is a bill that we are trying to send a message. With the WTO and the relationship we have, it would be very difficult for this bill to be signed by the President, but Mr. Kildee and I believe that the Congress, on the floor of this House, should debate H.R. 4808 and let the American people, or as good as the American people, let the negotiators know that the Congress does care about fairness in these trade agreements.

With that, Madam Speaker, I will close by saying that I appreciate the honor of serving in the House. I hope that we will always do our best to protect American jobs and the American worker.

I also want to close by asking God to please bless our men and women in uniform. And, God, please bless the families of our men and women in uniform. And, God, please bless America.

Mr. Speaker, the United States national

debt is $8.2 trillion. More than 25 percent, or $2 trillion of that national debt, is owned by foreign countries. China owns $300 billion of our public debt in bonds and Treasury notes. Our trade deficit with China is $200 billion alone.

Between 1989 and 2003, the United States lost 1.5 million jobs to China. According to the Wall Street Journal, China plans to increase its military spending by 14.7 percent, the biggest increase in its defense budget in 4 years.

A U.S. Government report issued in July said China is building up its military to be able to project power beyond Taiwan. The Pentagon budget issued this January stated that in the future China will have the greatest potential to compete militarily with the United States of America.

Mr. Speaker, China has taken proceeds from our trade deficit and budget deficit and used the money to fund its military buildup. America has done nothing to address the problem as our trade policy continues to give every advantage to China's state-owned companies who continue to take American jobs and sell cheap goods that American workers used to produce.

Mr. Speaker, I have joined with Republican Dale Kildee of Michigan and other Members of Congress in both parties to sponsor legislation to say that trade should be fair. What is good for America should be good for China. And what is good for China should be good for America.

H.R. 4808, the Unfair Chinese Automotive Tariff Equalization Act, does not require U.S. tariffs on passenger cars to be raised or Chinese tariffs to be lowered. The bill simply states that until tariff rates are equal, no Chinese-made cars may be imported into America.

Mr. Speaker, right now if America sells cars in China, they pay a 28 percent tariff. But the United States tariff on Chinese cars will only be 2.5 percent. That is unfair and unacceptable. I hope that the House of Representatives will bring H.R. 4808 to the floor, and, by passing this legislation, say to the trade negotiators, both Chinese and American, all we want is fairness for the American workers.

Mr. Speaker, with that I yield back my time, but I will close by also saying that I pray to God that He will bless our men and women in uniform and their families, and I ask God to continue to bless America.