Post on 26-Mar-2015
The economic foundation of the USA is being eroded by a trade
deficit of $2 Billion a day, factories are moving offshore and decent
jobs are disappearing….
In 2005, for the first timein over a hundred years,
our nation imported more food products
than it exported.
Oneida Ltd• For years, Revere shipped copper coils about 20 miles to another
manufacturing company named Oneida Ltd.
• Oneida cut and formed the copper
• Then plated silver on the form to produce...
…a silver bowl designed by Paul Revere
That’s as American as apple pie? Right?
WRONG…
…ON TWO COUNTS!
The Paul Revere silver bowl
• Now made in China
• Today, Oneida buys the silver bowl, silver flatware and other products from China
• How can China produce that silver bowl over there and ship it over here and compete?
The American Apple Pie• America now imports apples from
China
• So you really can’t say “…as American as apple pie…”
• How can apples from over there be refrigerated, shipped and still compete with apples grown just down the road?
It’s the cheap labor, right?
WRONG
First, let’s first look at the benefits of producing that silver bowl
in China vs. USA
…as China manipulates its currency…
The Paul Revere Silver Bowl
Assume production cost of 元 100
if made in China
@ manipulated exchange rate of 元 7 to $1, the production cost
in China is $14.28
@ free market exchange rate of 元 4 to $1, the production cost
in China would be $25.00
Currency manipulation
works the same way
for apples grown in China…
In other words, the government of China manipulates its currency to subsidize the
cost of manufacturing and farmingin China
The manipulation of its currency reduces the competitiveness of every other product, good
and service in the world when compared to its production in China.
It’s not only currency
• Tax structure • Health care • Environmental Stewardship• Government loans not repaid• Piracy of intellectual property/ reverse engineering• Other Subsidies
Currency manipulation on top of
these subsidies can reduce costs as much as 80%
when producing in China
This happens without even considering
the cost of labor
That’s how China competes…
…AND THAT’S AS CHINESE AS APPLE
PIE !
CENTRIFUGAL CHILLER COST COMPARISON
Material Labor
0
20
40
60
80
100
USA China
WITHOUT 40%CURRENCY MANIPULATION
0
20
40
60
80
100
USA China
Material Labor
WITH VAT REBATEOF 17%
0
20
40
60
80
100
USA China
Material Labor
Some Countries Using VAT Tax to Support Factory, Farm &
Service Jobs
Australia
Austria
Belgium
Brazil
Belgium
Canada
China
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Iceland
India
Ireland
Italy
Japan
Korea
Luxembourg
Mexico
Netherlands
New Zealand
Norway
Poland
Portugal
Russia
Singapore
Slovak Republic
Spain
Sweden
Switzerland
Thailand
Turkey
United Kingdom
Notes: 139 countries have a Value Added Tax (VAT) or border adjustable tax which discriminates in favor of domestic production of goods & services. One province in India boasts of a VAT tax over 50% in promoting itself as a prime location for jobs.
Countries Not
USA
VAT Hikes Keep Aggregate European Trade Barrier Constant
0%
5%
10%
15%
20%
25%
30%
1968 1973 1988 1996 2006
Total EU Trade Barrier Average EU VAT Rate Average EU Tariff Rate
Total EU Trade Barrier
Avg. EU VAT
Avg. EU Tariff AMTAC
Traded Products & ServicesVAT Impact at $100 Value
USAVAT = 0
MexicoVAT = 15%
GermanyVAT = 19%
$119$81$85
$115
$85
$81
So you can appreciate that
this is more than
a currency problem.
This results in a price war that
American factories and farmers
cannot win.
How can a US producer compete
if it must carry the burden
of the health care costs of its workers
and its foreign competitor does not?
Revere’s fabricating costs
• In 2007, about 10% of Revere’s fabricating costs were for the health care of its people and their families
• If you buy a product made from Revere copper or brass, you are paying for the health care costs of our people
• If you are buying a foreign product, you are not paying for any US producer’s health care
What about Revere’s exports?• Of course, the cost includes the health care
costs of Revere people
• The foreign country’s VAT imposed on Revere’s exports helps pay for the national health care cost of that nation
• So, in order to compete, Revere people have to cover their own health care cost and those of the foreign workers they compete against!!!
• That’s just as true for farm products whether you are considering taxes or health care…
Creation of a national health care system funded by a VAT is critical to the health of farming and manufacturing in the USA.
Worst Practices for Global Warming
• The world is working to make carbon emission worse
• The Kyoto Treaty and Regional/National Greenhouse Gas Initiatives exclude China
• They drive manufacturing to countries that have lower environmental standards
• Causing carbon emissions to increase
Pollution in China makes it difficult to see containers being loaded for export…
or live in a city…so imagine near a factory…
China’s Pollution Flow
Almost 25% of the particulate matter that falls on California originates from China and Southeast Asia.
Policy making
• The international trade & tax policies of the USA are destroying the best jobs in the USA
• The correct policies are not protectionist but a balanced response which recognizes the degree to which trade is managed by every country in the world but the USA
• National & international environmental policy making is contributing to global warming due to its biased impact on international trade and the relocation of production capacity
But this is more than an economic battle.
The importance of a strong domestic manufacturing base to national security and
national defense cannot be overstated.
Revere was founded with $10,000 loan from the US Navy to supply copper sheets to sheave
the USS Constitution
When the Revolutionary Army needed cannon, Paul built a factory. When it needed gunpowder, he built a factory.
Personally I admire the culture of China
…and it’s people
But make no mistake about it,
China is waging a mercantile war on the world
and the world is sleeping.
WALL
STREET
MULTINATIONALS
They still talk America first,
they just don’t walk it.
Their protests are crocodile tears
The workers they support are in China
…not in the USA!
They have to choose between
their company
and
their country.
What goes around comes around…• Wall Street is failing because of the credit
crises which was initiated by sub-prime mortgages not being paid
• Main Street is failing because people are out of work (6%), got discouraged (4%) or accepted part time employment (5%)
• That’s 15% unemployed and under employed!!!
• Mortgages are not being paid by Americans because of outsourcing (excuse me, globalization) of work
U.S. Manufacturing Jobs vs. Trade Deficit (2000-06)
14000
15000
16000
17000
18000
Ma
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Ju
n-00
Se
p-00
De
c-00
Ma
r-01
Ju
n-01
Se
p-01
De
c-01
Ma
r-02
Ju
n-02
Se
p-02
De
c-02
Ma
r-03
Ju
n-03
Se
p-03
De
c-03
Ma
r-04
Ju
n-04
Se
p-04
De
c-04
Ma
r-05
Ju
n-05
Se
p-05
De
c-05
Ma
r-06
U.S
. E
mp
loye
es
in
Ma
nu
fac
turi
ng
(0
00
’s)
0
100
200
300
400
500
600
700
800
900
U.S
. T
rad
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efi
cit
in
Bil
lio
ns
of
Do
lla
rs
(Ov
er
Pre
vio
us
4 Q
ua
rte
rs)
Manufacturing Jobs
Trade Deficit
Trade deficit
Manufacturing J obs
Notes: We do know that 3 million manufacturing jobs have been lost since 2000. Previous recoveries averaged about 1 million job losses.
Who should America listen to for advice
on tax and trade policy?
Obviously, none of the above…
So, the looming question is, “What should be done to
counter this offensive and protective behavior
by China and other nations?”
Sounds like our nation needs advice from the real world…
Joint Coalition Meeting
• Coalition for a Prosperous America (CPA) {farming, ranching and manufacturing}
• AFL-CIO• Alliance for American Manufacturing • American Manufacturing Trade Action Coal.• Copper & Brass Fabricators Council• Steel Manufacturers Association• Tooling, Manufacturing and Technologies As.• United States Business and Industry Council• Economists, foundations, universities
MAKING
THE GLOBAL ECONOMY
WORK FOR
ALL AMERICANS
MAKING THE GLOBAL ECONOMY WORK FOR ALL AMERICANS
1.SUPPORT policies that promote American interests by requiring full reciprocity, fairness, and transparency in all U.S. trade agreements.
MAKING THE GLOBAL ECONOMY WORK FOR ALL AMERICANS
2.SUPPORT actions to combat the illegal, mercantilist practice of prolonged currency misalignment, including legislation to make it actionable under US trade law.
The only legislation with real teeth designed
to address currency manipulation is the
Stabenow Bunning Bayh bill in the Senate
and
the Ryan Hunter bill in the House.
If the use of CVDs does not lead
China and other nations
to stop manipulating their currency,
then the USA must take stronger measures
even if this means stepping outside WTO rules.
MAKING THE GLOBAL ECONOMY WORK FOR ALL AMERICANS
3. SUPPORT aggressive enforcement of U.S. laws to halt foreign illegal trade activities such as dumping, subsidies and intellectual property theft. In addition, U.S. policy must ensure that all goods sold here meet U.S. food and product safety standards.
MAKING THE GLOBAL ECONOMY WORK FOR ALL AMERICANS
4. SUPPORT the elimination of tax disadvantages which undermine the competitiveness of U.S. producers both at home and abroad or which discourage investment in America.
MAKING THE GLOBAL ECONOMY WORK FOR ALL AMERICANS
5. SUPPORT reduced U.S. dependence on imported energy.
MAKING THE GLOBAL ECONOMY WORK FOR ALL AMERICANS
1. SUPPORT policies that promote American interests by requiring full reciprocity, fairness, and transparency in all U.S. trade agreements.
2. SUPPORT actions to combat the illegal, mercantilist practice of prolonged currency misalignment, including legislation to make it actionableunder US trade law.
3. SUPPORT aggressive enforcement of U.S. laws to halt foreign illegal trade activities such as dumping, subsidies and intellectual property theft.In addition, U.S. policy must ensure that all goods sold here meet U.S. food and product safety standards.
4. SUPPORT the elimination of tax disadvantages which undermine the competitiveness of U.S. producers both at home and abroad or which discourage investment in America.
5. SUPPORT reduced U.S. dependence on imported energy.
Putting Domestic Energy in Context
• Environmentally sound
• Economically competitive
• Timely
Powering toward a cleaner competitive environment
• China is planning 40 new nuclear power plants, Japan is building 10 more, France relies on nuclear for 80% of its electricity.
• Why? Nuclear power is clean & low cost if siting/environmental concerns are managed.
• Nuclear waste is dangerous but can be contained in
areas much smaller than appreciated. Thirty years of nuclear waste from a 1,000 MW plant would fit in an area the size of a high school gym.
• The USA needs substantial additional low cost, clean
electricity to compete and clean up the environment. The USA should use a BRAC type process to site new nuclear generation throughout the country.
Conclusion
This will require an alliance offarm, factory, service and national security
representatives.
Wake up, America!
Visit: reverecopper.com and learn more
Please carry the message…
Thank You.