US looks for industrial boost

US manufacturing is at a standstill

The US Government has outlined plans to safeguard manufacturing jobs by making American heavy industry more competitive in global markets.

In a speech to the Detroit Economic Club, Commerce Secretary Don Evans said he would set up a team to probe hurdles to fair trade, notably what some see as unfair Chinese currency practices.

With a presidential election now just over a year away, there has been mounting concern over the 2.5 million manufacturing jobs lost since President George W Bush came to power in 2000.

Many US industry lobbyists contend that cheaper developing economies, especially in Asia, have an advantage because of the relatively strong dollar.

Despite a generally resurgent US economy, industrial output grew by just 0.1% in August, held back by a decline in the manufacturing sector.

Looking for ideas

US industry is an increasingly important political topic, with both parties scrambling to win votes in the manufacturing heartland.

Mr Evans is in search of a solution

Democrat lawmakers, concerned at their failing grip on blue-collar opinion, on Monday said they would back Republican legislation to provide manufacturers with lower rates of tax.

The government, meanwhile, is looking for a concrete plan to stimulate manufacturing, and has been in consultation with industry leaders this year to garner ideas.

Mr Evans ideas are still in the preliminary stage, and he plans to elaborate on them later this month.

In addition to the "Unfair Trade Practices Team" within his department, the administration would also establish an Office of Industry Analysis to examine the economic impact of new rules and regulations.

And another post - assistant secretary for trade promotion - will be created to oversee all the Commerce Department's export-promotion efforts.

Targeting China

Mr Evans also threw his weight behind American criticism of China, which many feel has been winning too much business with its cheap exports.

He repeated the administration's call for China to move to a system in which its currency, the yuan, is freely set by market forces.

US manufacturers allege that China has gained an unfair trade advantage by pegging the value of the yuan at about 8.3 to the dollar - the most glaring example, they say, of undervalued Asian currencies.

Treasury Secretary John Snow traveled to Beijing earlier this month to urge China to change its policy, a trip that met with mixed results.