Steelworkers vs. China

 

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The United Steelworkers union has a leveraged cry for help in a complaint that says China unfairly subsidized clean-energy companies.

The 5,000-page complaint, reportedly filed Thursday, gives the Obama administration up to 45 days to respond, which means the White House would be forced to take a stand on the complaint just before the November election.

With that in mind, union President Leo Gerard said, "We're going to mobilize around this," which means an 850,000-member union has vowed to get very vocal about China's allegedly unfair trade practices just before a midterm election in which Obama's credibility is often cited as a pivotal issue.

In the background of this Main Street shootout:

-- Obama's dependence on union support.

-- At least a dump truck load of timid rhetoric from the White House and the Treasury Department concerning China's currency policy in the past year and a half.

-- Trade balances that put the United States about $40 billion behind every month, and China about $30 billion ahead.

-- A lot of presidential bravado about how the United States should turn its green technology into jobs for Americans before someone else swipes those jobs away.

-- A wavering economic recovery that was solidly based on sweat equity when it was going well, which is to say, it was based on a recovery in the manufacturing sector.

-- A series of executive dings against China's trade policies that have targeted specific goods, such as steel wire strands used in concrete construction.

Also in the background are job erosion over several decades in manufacturing and the long-established trends that have made Asia the manufacturing base for the developed nations of the world. Toss in the massive U.S. Treasury debt held by China, which subsidizes U.S. lending -- everything from cars to homes -- and, it could be said, there is plenty of fodder for rumination.

On the whole, this mega-macroeconomic trend is precisely what Obama's team has targeted during Group of 20 economic summits. But now the Steelworkers are saying, within 10 days before the next election, put your money where your mouth is.

The specific complaints include low-interest loans China provides for green-technology companies and land given to companies so they can construct factories at bargain-basement prices.

That undermines the ability for U.S. companies to compete in construction of wind turbines, solar panels and even light bulbs, the union says.

Interestingly, before Obama took office, Congress had already passed a clean energy bill that demanded more of the average light bulb -- so much so that Thomas Alva Edison's invention will become obsolete within the next five years. Yes, the bulbous, tear drop-shaped glass item that is recognizably a light bulb will give way soon to the spiral-shaped fluorescent light bulbs -- Soho meets Yankee ingenuity -- that are more efficient, were developed at General Electric and required so much hand labor to make that China now makes the lion's share of them.

In international markets Friday, the Nikkei 225 index in Japan gained 1.55 percent and the Shanghai composite index in China rose 0.26 percent. The Hang Seng index in Hong Kong gained 0.43 percent and the Sensex in India added 0.71 percent.

The S&P/ASX 200 in Australia fell 0.48 percent.

In midday trading in Europe, the FTSE 100 index in Britain fell marginally, down 0.02 percent while the DAX 30 in Germany dropped 0.19 percent. The CAC 40 in France fell 0.14 percent and the pan-European DJ Stoxx 50 lost 0.34 percent.