In the eyes of the U.S. Business & Industry Council, tariffs are a primary tool needed to resurrect American manufacturing.
``Everybody in the world can't get rich by exporting to the U.S.,'' USBIC President Kevin Kearns said at an Oct. 25 appearance in Cleveland. ``There has to be a limit.''
With this goal in mind, USBIC - a Washington-based group representing the interests of family-owned and privately held businesses - has proposed several ``emergency measures'' for the federal government, including trade equalization tariffs on countries that run ``large, chronic'' trade surpluses with the U.S.
USBIC - which has more than 1,500 member firms - also has proposed stiff tariffs on countries that manipulate currencies for trade advantage.
The stakes are high for Ohio and other large manufacturing states. Ohio ranks second nationally in plastics jobs, trailing only California. Ohio's plastics industry includes more than 2,800 facilities and 140,000 workers, generating $49 billion in annual sales and paying its workers $5.6 billion in wages.
On their visit to Ohio, USBIC executives met with several plastics firms, according to USBIC research fellow Alan Tonelson. Among those firms was Akron-based compounder Diamond Polymers Inc. and its sister firm, resin distributor Network Polymers Inc.
Tonelson said he was concerned with Ohio's manufacturing economy for several reasons, including:
* An 8 percent drop in the state's goods output between 1997 and 2005. Tonelson said Ohio is one of few the American states that produced such results. That drop also doesn't reflect current and future softness in the automotive sector, he added.
* Jobs created in Ohio in the last few years pay, on average, less than the jobs lost paid. ``The losses have been in manufacturing and the job gains have been in services,'' Tonelson said. ``That can create a shrinking tax base and increased demand for public services.''
* Many of the service jobs that have been created in Ohio have come not from the private sector, but from state and local government, which Tonelson described as ``the least productive, least dynamic sector of any economy.''
In spite of these setbacks, Tonelson agreed that both in Ohio and on a national level, business owners have been relatively positive in 2005 and 2006 and also are optimistic for 2007. He chalked this good feeling up to government-created low interest rates, deficit spending and a national housing bubble.
``The problem with this growth is that it hasn't been record growth in spite of receiving record stimulus,'' Tonelson said. ``Much of the benefit has been going overseas.''
He added that from 1997-2004, U.S.-based manufacturers lost market share to foreign-owned firms in 108 of 112 manufacturing sectors tracked by the federal government.
``I can't conceive how anyone could argue that a sector that's losing market share can be considered healthy,'' Tonelson said. ``This has been the result of very deliberate actions taken in Washington.''
Nationwide, the plastics industry has felt this blow in the closing of more than 500 plants and elimination of almost 70,000 jobs from 2002-04, according to data gathered by the Society of the Plastics Industry Inc. The United States also had a trade deficit of $4.7 billion for plastics products in 2004, according to Washington-based SPI.
Manufacturing losses even have affected the U.S. defense industry and, as a result, have impacted the country's war effort.
``There are problems in our defense base, even though Iraq and Afghanistan are small wars by historical standards,'' USBIC senior fellow William Hawkins said. ``We thought we were prepared, but within months we had to import ammunition from Canada and Israel and other places.''
Currently, federal standards require only half of a weapon's value to be produced in the U.S. Legislation has been introduced that would increase that amount to 65 percent, but it's doubtful that the U.S. manufacturing sector can meet that goal, Hawkins said. The change also has been opposed by Defense Secretary Donald Rumsfeld.
``People are saying we can't [meet the 65 percent] because we've outsourced too much business,'' Hawkins said. ``Our machine tool industry, in particular, is gone.''
Yet the U.S. continues to spend four times as much on military research and development than all of the other countries in the North Atlantic Treaty Organization combined.
``We want to invent the technology here and make it somewhere else,'' Hawkins said. ``We want to buy on the cheap. That's not the best long-term defense strategy and it's undermining our long-term security.''