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Chinese leader's visit prompts Schumer to talk tough about unfair trade policies

On the day the president of China arrived in Washington, the senior senator from New York dispensed with the niceties of diplomatic language while in Buffalo.

President Obama must warn the visiting Hu Jintao in the sternest of terms that unfair trade practices affecting the rare earth elements that the Chinese export to companies such as Ceno Technologies in Buffalo must be amended, Sen. Charles E. Schumer insisted Tuesday.

"This is what they do over and over again, and it's about time it stopped," Schumer told reporters. "It's already a trade war, and we're losing. And guess what? The Chinese need us a lot more than we need them."

Schumer spoke at Ceno headquarters in the new Innovation Center at the former Trico complex on Washington Street.

The senator has not shied away from criticizing aspects of U.S.-China trade policy over the last few years, contending that unbalanced currency and other practices consistently batter the domestic economy.

But as he held up vials of rare earth elements such as the gadolinium used in Ceno research and a variety of defense applications, the senator said the Chinese have inflated prices three times over, threatening national defense and local industry.

And he pointed to the new high-tech start-up companies in the transformed plant as the kind of job-creating firms that will be affected.

"China is like a bully in the schoolyard, and it's about time someone stood up to them," Schumer said. "And it has to be the United States of America."

The Buffalo company formerly paid $200 per kilogram for gadolinium but now pays $600, Schumer said, as he was joined by Ceno partner Scottpatrick J. Sellitto. China controls 97 percent of the trade in rare earth elements, Schumer said, and it has slowly tightened its export quotas -- creating a scarce and expensive supply to the rest of the world.

The Chinese government has increased export taxes on rare earth elements by 15 to 25 percent, according to a Government Accounting Office report, Schumer added. While prices previously changed every month or two, he said, some producers are now facing daily price changes, or being told that the minerals they need will be unavailable, hampering their ability to plan for the future.

The result not only costs U.S. companies money, the senator said, but poses a threat to national security for products such as laser-guided bombs and night vision goggles.

"I'm asking the president to make rare earth elements a priority," Schumer said. "If [the Chinese] don't stop their unfair trade practices with rare earth elements, we should stop allowing them to sell materials with rare earth elements in the U.S. That will scare them."

Schumer also addressed an article in Tuesday's editions of The Buffalo News outlining how GOP opposition to earmarks -- congressional funding for specific projects --will hurt planned development such as on the adjacent Buffalo Niagara Medical Campus.

"The answer is reform," he said. "There are good earmarks and bad earmarks. And the way to weed out the bad ones is to bring them out in the open."

Schumer cited the infamous Alaskan "bridge to nowhere" proposal as an example of a bad earmark that never saw fruition because of media scrutiny. Members of Congress who sponsor such pork-barrel items, he said, should make them public, attach their names to them and be held accountable.


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