China Practices Threaten 1.6 Million Auto Jobs, Reports Say

About 1.6 million U.S. jobs in the auto-parts industry are threatened by China’s illegal trade practices and federal action is needed to protect the recovery for carmakers, the Alliance for American Manufacturing said.

China’s violations of World Trade Organization rules have already cost more than 400,000 jobs since 2000, according to a report released today by the group. China imported $62 billion in auto parts since 2001, increasing an auto-parts deficit with China by 850 percent, according to the group.

“It’s essential that federal action be taken to challenge these abuses before they completely undermine the job recovery underway in the U.S. auto industry,” Scott Paul, executive director for the Alliance, said in a statement.

China will invest $1.5 trillion in “new energy” vehicles and parts in a drive for global leadership by 2030, according to research by law firm Stewart and Stewart cited by the alliance. China’s manufacturers are targeting batteries, electric motors, electronic cooling systems and fuel cells, according to the report.

The alliance, which includes manufacturers and the United Steelworkers, is challenging China’s policies a day after U.S. companies said jobs would be threatened by additional tariffs on Chinese solar-equipment imports. More than 60,000 U.S. jobs could be lost if tariffs are imposed, as sought by American companies, according to a study released yesterday.

A worker operates on the vehicle battery assembly area of Wanxiang Group's electric automobile division in China, on Friday, March 25, 2011. Photo: Qilai Shen/Bloomberg Close

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A worker operates on the vehicle battery assembly area of Wanxiang Group's electric automobile division in China, on Friday, March 25, 2011. Photo: Qilai Shen/Bloomberg

U.S. manufacturers are stepping up their push for action against the Chinese prior to the Feb. 14 visit of Xi Jinping, China’s vice president, to Washington for meetings with President Barack Obama on bilateral and regional issues.

Obama Complaints

Obama has brought trade complaints against China at a faster rate than his predecessor, the U.S. Senate has voted to punish China for maintaining an undervalued currency and Republican presidential candidates have pledged to label China a currency manipulator.

U.S. auto-parts companies make tires, engines, electrical and electronic equipment. Obama has imposed duties on Chinese- made tires, which he said has created 1,000 U.S. jobs.

Midwest U.S. states are most at risk of losing auto-parts jobs to China’s imports, including 250,000 in Michigan and 189,000 in Ohio, according to the alliance. Lawmakers including Democratic Senators Sherrod Brown of Ohio and Debbie Stabenow of Michigan were join the alliance event in Washington, according to a statement.

To contact the reporter on this story: William McQuillen in Washington at bmcquillen@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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