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Major Issues in International Trade

Major Issues in International Trade. Currency manipulation China and other Asian countries keep the value of their currencies artificially low to make their exports cheaper and imports more expensive Subsidies

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Major Issues in International Trade

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  1. Major Issues in International Trade • Currency manipulation • China and other Asian countries keep the value of their currencies artificially low to make their exports cheaper and imports more expensive • Subsidies • China has provided billions of dollars in subsidies, directly and indirectly, to its steel industry • Attempts to weaken the trade laws • Multinational corporations that want to be able to rely on dumped and subsidized merchandise • Climate change • Some solutions would encourage U.S. manufacturing to move to China and elsewhere, leading to greater greenhouse gas emissions

  2. U.S. Dollars per Chinese YuanExchange Rate (1993-2008) Source: Pacific Exchange Rate Service

  3. Illegal and Abusive Subsidies • Discounted Land Costs • Discounted Energy Costs • Low Cost Loans • Debt Forgiveness • Lack of Environmental Compliance

  4. Chinese Steel Production1996-2010 Estimated 647 mmt by 2010 Total Production of Crude Steel – International Iron & Steel Institute (IISI), Steel Statistical Yearbook 2007 and Crude Steel Statistics 2007

  5. U.S. Trade Deficit1997-2008 China will account for over 28% of the U.S. Trade Deficit in 2008! U.S. Trade in Goods with World (Seasonally Adjusted) in Billions of Dollars through June 2008 (projected through Dec. 2008); U.S. Census Bureau

  6. Trade Deficit Manufacturing Jobs Source: U.S. Census Bureau, U.S. Bureau of Labor Statistics

  7. U.S. Manufacturing Jobs(in thousands) March 1998 17.6 Million Jobs August 2008 13.4 Million Jobs Over 4 million manufacturing jobs have been lost since manufacturing peaked in 1998

  8. North Carolina Manufacturing Jobs Nearly One of Every Three North Carolina Manufacturing Jobs Has Been Lost in the Last Decade.

  9. Endangered Manufacturing Industries 41% 38% 45% 46% 52% 50% 59% 44% Source: U.S. Bureau of Labor Statistics, Current Employment Statistics Survey, Not Seasonally Adjusted

  10. The State Crisis: Manufacturing Jobs LostJune 1998 to December 2007

  11. The Multinationals’ View • Large multinational manufacturers and trading companies (“MNCs”) generally oppose any strengthening of the trade laws • Their chief focus is maximizing worldwide profits, not achieving maximum production and employment in the United States • These companies have a vested interest in bringing dumped and subsidized imports into the United States • Because of their size, they have substantial political clout

  12. U.S. - China Direct Investment(2000 – 2007) $28.32 Billion $1.1 billion Source: The U.S. Bureau of Economic Analysis, Direct Investment, Direct Investment Position on a Historical-Cost Basis

  13. Major Issues in International Trade • Currency manipulation • China and other Asian countries keep the value of their currencies artificially low to make their exports cheaper and imports more expensive • Subsidies • China has provided billions of dollars in subsidies, directly and indirectly, to its steel industry • Attempts to weaken the trade laws • Multinational corporations that want to be able to rely on dumped and subsidized merchandise • Climate change • Some solutions would encourage U.S. manufacturing to move to China and elsewhere, leading to greater greenhouse gas emissions

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