In Wooing of Nissan, a Lesson for Tech Jobs?
But it became clear at the meetings that there were differences of opinion over how best to bring manufacturing home, according to people familiar with the discussions who did not want to be named because the sessions were private. Everyone shared the same goal: establishing a level playing field and creating as many jobs in America as possible. But the debate centered, in part, on choosing among different tactics the American government has used in the past: penalties like tariffs against foreign countries that do not play by the rules or incentives like tax breaks to encourage more domestic manufacturing. On one side were officials like Ron Bloom, until earlier this year the president’s senior counselor for manufacturing policy, who favored more aggressive stances to counter policies used by Asian countries. He argued that the United States should fight China’s efforts to keep its currency weak. If China’s currency were stronger, American companies might find it costlier to make their goods in China and could have greater incentive to manufacture more in this country.
Aligned on the other side at times were two powerful voices, Lawrence H. Summers, the top economic adviser to Mr. Obama until 2010, and Treasury Secretary Timothy F. Geithner. Along with many economists, Mr. Summers argued that an overly aggressive trade stance could hurt manufacturing — by, for instance, pushing up the price of imported steel used by carmakers — and over time, drive companies away.
Mr. Geithner thought diplomacy was more effective than confrontational tactics like labeling China a currency manipulator. “He told us, ‘It’s going to be a trade war if we go there,’ ” according to a person who attended the meetings. But this person countered that China would respond only to pressure. “What doesn’t work is the quiet stuff,” he said.
Mr. Summers, in a recent interview, declined to discuss his role at the White House. But, speaking more broadly, he said protectionist measures might incite new domestic manufacturing in the short run, but it would come at a high price. “People will pay more for the product because it’s produced in a place that can’t make it at the lowest cost,” he said. “It burdens exporters because they pay more for their inputs. And it removes the spur of competition.”
A spokeswoman for Mr. Geithner said that “a multidimensional approach to tough yet smart engagement with China is the most effective way to level the playing field.” This strategy has had some success in persuading China to increase the value of its currency, she noted.
One of the president’s economic advisers also said that, despite some differences, Mr. Obama’s team, including Mr. Geithner and Mr. Summers, united to preserve manufacturing jobs in a critical area, by bailing out the auto industry in the wake of the financial crisis.
But the divisions within the White House have often frustrated those who wanted a sharper focus on manufacturing. “The critics would say we didn’t really fight for manufacturing policy,” said another former high-ranking official who took part in many of those meetings. “They have a strong point.”
Now, with unemployment high and a growing debate over outsourcing of jobs, manufacturing is on the political agenda. In March, Gene B. Sperling, director of the White House’s National Economic Council, outlined initiatives — including tax breaks for building factories here, infrastructure investments and going after “unfair trade practices” — to reinvigorate manufacturing. In May, the Commerce Department announced tariffs on Chinese solar panels for selling below fair-market value. The White House has challenged China’s trade practices on tires and rare-earth metals, and has established an “interagency trade enforcement center” to combat unfair trade.
Washington, however, has generally shied from addressing the protectionist measures of countries like China with countermeasures, as politicians once did against Japan.
After the Senate last year passed legislation imposing tariffs on nations whose currency is undervalued — a salvo aimed at China — the bill went nowhere in the House of Representatives, and the White House indicated it did not like the proposal.
However, champions of “in-sourcing” legislation — which takes away benefits from companies moving jobs abroad and provides incentives for those bringing jobs back — said the tenor of the debate is changing. “The public by and large has been betrayed by large American corporations that outsource. I think Congress is catching on to that,” said Senator Sherrod Brown, Democrat of Ohio.
Still, he does not advocate tariffs or quotas. Senator Debbie Stabenow, Democrat of Michigan, also favors tax breaks, rather than penalties. “I love my iPad,” she said. “And I want it made in America.”
One reason for the difference today: Unlike in the 1980s, when Japanese auto imports upset many voters, there has been little public outcry over imported cellphones and computers.
Back then, American workers were losing jobs as imports from Japanese companies cut into sales of the Big Three automakers.
But consumer electronics are different. Though some jobs have moved to Asia, many were never here to begin with. And the biggest technology importers — like Apple, Hewlett-Packard, Dell and Microsoft — are American companies.
Today, many consumers do not know or care where their smartphones are made. “Where it was built, what it means for politics, how it affects the economy,” said Raymond Stata, a founder of Analog Devices, one of the largest semiconductor manufacturers, “that’s not something people think about when they buy.