On one side of Baltimore harbor, Ellicott Machine Corp. is
putting the final touches on a package of heavy-duty dredging
equipment to make Chinese ports navigable. Sales to China, says
chief executive Peter Bowe, are a key to the future for the company,
which once made equipment to dredge the Panama Canal.
Across the harbor, Ronald Allowatt sees it differently. "The more
we compete with people making 20 cents an hour, the more we're going
to be out of work," says the president of the United Steelworkers
As Congress prepares to vote - perhaps as early as Wednesday - on
permanently normalizing trade with China, these contrasting views
frame a national debate over whether the action will help or hurt
the US economy.
To those who see globalization as an irresistible force, pulling
1.2 billion Chinese into the world market can only open
possibilities for US businesses. Others say the US economy is so
big, relative to the amount of additional goods sailing for
China, that the overall effect will be small - and possibly not
worth the loss of hundreds of thousands of American jobs.
"It's all baloney. The [export] numbers are not worth anything,"
says Clyde Prestowitz of the Economic Strategy Institute, a
Washington think tank. Even if the US doubles its exports, he says,
the new business will have a negligible impact on the $8 trillion
Important sectors of the work world, meanwhile, are polarized
over the China trade vote. Unions, led by the AFL-CIO, say imports
of Chinese goods, everything from toys and shoes to light electrical
machinery, will put its members on the unemployment line. They have
an ally in the textile industry, which says it could lose more than
"There are a lot of industries that ship parts made in the US to
China and then re-export it [from there], such as
telecommunications, semiconductors, and hardware," says Bill Rhodes,
an investment strategist who's seen a list of US companies that plan
to relocate plants to China. "Now they'll close those factories, and
the whole item will be manufactured in China," says Mr. Rhodes,
chief investment strategist for the Williams Capital Group, a New
York investment bank.
But some captains of industry dream of vast new opportunities.
Citrus farmers envision a huge new market for orange juice. The
telecommunications industry sees big potential for cellular phones.
Lawyers and insurance companies talk about setting up offices in the
hot spots of Chinese commerce. The US government reasons that
because China will be required to reduce tariffs on many products,
export opportunities will expand.
If Congress approves the trade bill, estimates are the move could
pare the US trade deficit with China, which is running at $60
billion annually, second only to Japan. Goldman Sachs, a New York
investment bank, estimates US exports will grow to $27. …