Who is protecting American workers from the Communist Chinese predatory trade war? No one! War is a struggle with others for victory or supremacy. Chinese leaders have stated that they want to be "the world's manufacturer."
To accomplish this, the Chinese government grossly undervalues its currency, pays slave wages, rebates value-added taxes on exports and imposes a value-added tax to imports, offers Chinese manufacturers pervasive subsidies and permits intellectual property theft. No American company can compete and win with all the advantages the Chinese government provides Chinese companies.
In 2006, the United States had a trade deficit of $233 billion with China. In 2007, if it continues at the present rate, the trade deficit will be more than $300 billion. If other countries are counted, the U.S. trade deficit will be close to $800 billion.
Former Presidents George Bush and Bill Clinton, when selling us on NAFTA, concluded that for every $1 billion of exports, 20,000 jobs were created, therefore, with $800 billion of U.S. imports 16 million jobs will be lost. We will continue to lose jobs and industries until we change our free trade policy.
China has one political party -- Communist. It believes in mercantilism, that is, protecting home industries through tariffs and other methods. The Chinese expand their economy by exporting and thereby accumulating other countries' debts and/or assets. China owns more than $1 trillion of our debt.
The United States has two major parties -- they both believe in free trade. Free trade means no tariffs or duties at the border.
The theory is that free trade allows access to low-cost consumer goods and therefore improves the standard of living faster than wages increase. Also, that workers who lost their jobs to imported foreign products would quickly find other jobs and that the trade deficit would decrease. That is, we are better off and have a higher standard of living due to free trade. Wrong! None of this has happened in America. We have been misled.
The truth is, the free trade theory works only when climate, natural resources and physical features are major factors. When wage rates, capital and technologies are the major factors, the country with the lowest prices has the advantage. For free trade to benefit both countries, both must be free traders. When one country is mercantilist and the other is a free trader, the free trade country will lose its wealth, its ability to feed itself and its ability to manufacture the products it consumes.
Free trade does not affect all people equally. The elite, politicians, managers and company owners are doing quite well. They benefit from free trade. The working class suffers from lower wages; loss of jobs, pensions and health care coverage; and a lower standard of living. In the long term, all Americans lose because our wealth is transferred to another country. Our agricultural and manufacturing industries and middle class are destroyed along with our ability to defend ourselves.
Our federal elected officials all take an oath to preserve, protect and defend the Constitution. We the people established the Constitution for common defense and to promote the general welfare. One definition of welfare is a state of health, happiness and prosperity (a job). Our elected officials were elected to promote the welfare of all the people.
Elections in America are expensive. The wealthy elite contribute more dollars, therefore, they have greater influence over those running for office than the voters. Elected officials who vote for free trade agreements after having their campaign coffers filled by the transnational elite break their oath to the people.
We can make Congress do something it prefers not to do. We the people rose up and made a big impression on the senators and they fell short of the votes needed to pass the Amnesty Bill. Two weeks earlier, the bill was supported by more than 60 senators.
They did listen to a massive "we the people" protest, with millions of telephone calls, millions of e-mails, millions of letters and vocal town meetings. Our elected officials are much like us. They don't like being confronted with disagreement. They like their jobs and they need our votes. Use every legal means possible to get their attention. Don't ask politely -- make demands. Demand no more free trade agreements, no more trade deficits. Remind them that they took an oath to protect the people.
This is our country, our life, our children's future that is being attacked and destroyed by China's predatory trade war.
Jack Davis is president of I Squared R Element Co. in Akron.