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washington journal continues. host: i'm joined now by scott paul. we will be talking about competitiveness with china. welcome to the program. guest: thank you. it is good to be with you. host: let's talk about your program. who are the members and how is it funded? guest: we have been around for about 15 years. we are pretty unique in washington, in that we are a partnership between a labor union, the united steelworkers, and some of its domestic manufacturing partners. we focus on manufacturing policy, trade policy, we advocate for public policies that will strengthen our economic policy and manufacturing in america. host: an funding comes from the members? guest: absolutely. it is derived through public -- through public bargaining. in this case, we bring everything to the table. it gives a sale is more power that way. host: i will just remind our

viewers that you can give us a call if you would like to ask a question or make a comment. our lines are by party affiliation. we do have a line set aside for if you work in the manufacturing sector. be sure to call in if you work in the manufacturing sector on a special line, which is (202) 748-8003. you can also use that line for sending us texts. earlier this month, you testified for the house select committee. he said our hubris and neglect aided russia's invasion, hollowed out our middle class. explain that to us. guest: sure, thank you. the concern that this committee has is with the policies of the chinese coming as party and how

they made -- how they may threaten security, a variety of concerns. i want to contribute also that we made missteps along the way in the united states. the way in which we invited china into the world trade system was basically a blank check and trust that china would fulfill its obligation. that did not pan out. we must make ourselves more competitive. i think that has changed recently, but i think the policies of the chinese coming as party and the fact that we were not prepared lead to some devastating consequences. basically, stuff we were once making in the united states was made in china. host: devastating consequences like what? guest: for example, in the midwest, we lost tens of thousands of factories over a short amount of time, when that

this -- within the span of a decade. major employers of these people did not particularly have four-year degrees. these were full effects show people weren't spending at the grocery stores or country meeting to taxes. in many ways, these community suffered and they're still digging out of the hole. research has been done princeton and m.i.t. that showed that the job loss and the wage loss also contributed to some devastating social consequences. more depths of despair, higher divorce rates, lots of really profound impact for these communities in the heartland. i think we saw this manifest in politics over the last seven or eight years. let's talk about manufacturing host: host: -- let's talk about

manufacturing jobs. an average of 33,000 jobs were added per month in 2022. that doesn't sound like a bad thing. guest: this is a good thing. the last couple of years, we have seen a reversal. the pandemic brought to light that if we don't want a massive amount of shortages or supply chain disruptions, we need to invest in america made vectoring again. i think many in the private sector have woken up to that fact. i think public policies are starting to reflect that as well. we are seeing big investments in american manufacturing. there were a couple of decades where there weren't a lot of announcements or ribbon cuttings. now, we are seeing all sorts of plant opening announcements in high tech, steel, lots of other stuff as well. i think the pandemic brought

into focus that we can't depend on china or other countries alone to supply the goods that we need, particularly in a time of crisis. we are starting to turn around the ship, but i think the focus on china is still important because there is still a lot of work that needs to be done. host: let's talk about semiconductors, because that has been a big problem within the supply chain and not having enough conductors. let's take a look at the chips act. it says 53 billion doarin grants for semiconductor manufacturing an research invested in support and research for semiconductor manufacturing through 2026. give us an overview of how that chips act is supposed to work and if anything has been happening so far. guest: i think a lot has been happening and it's good news. the initial round of funding

has, i think, spurred a lot of private sector investment. you have seen firms, some with brand names that people recognize, like intel and texas instruments, announced that they are expanding and building new semiconductor manufacturing facilities in the united states. all over the place. a lot of these are in high tech semiconductor manufacturing. but we will also see investments in the supply chain as well. this is happening in arizona, idaho, new york, ohio, lots of places. the idea is we will be able to supply more semiconductors that we consume in the united states. we got to a point a generation ago in the early 1990's, when made about one-third of the world's semiconductors and consumed about that much. just last year, when aid -- we made about 7%. consumption stayed very high. we have built up a big deficit,

major dependence on china and taiwan and elsewhere in asia. that is starting to come home and we are seeing the fruits of that. within the next couple of years, i think that will give the united states a lot more capacity, a lot more ability to be resilient. we need to make sure we can build automobiles and washing machines, all the gadgets we append on, things we saw months and months of delays on years ago. host: they are calling this policy where taxpayers are picking winners and losers. kentucky gop republican andy barr spoke out against those calling on those to adopt this against china. [video clip] >> the ccp is entering the final phase of its 100-year marathon

to replace the united states as the world's global superpower. an underappreciated dimension of this strategic competition between the united states and ccp, one of the reasons why the cp -- ccp is arguably ahead of schedule in that marathon is that the ccp's economic aggression against the west. but i believe very strongly that the united states should not mimic the chinese industrial policy, should not copy the chinese command and control system. we should not embrace overly broad measures that would raise questions about our commitment to a market economy, which is a key source of strength to the united states in contrast to china's communist central planning policies. in other words, as this committee does its work and as we consider policy responses to

the threats from the ccp, i would submit to my colleagues and policymakers in this country , we should not try to counter china by becoming more like china. host: scott, what do you think of that? he says we're going to become more like china. guest: in that hearing, i agreed with about 99% of the things said by everybody, which is where to find in a hearing. i did not agree with that. i felt he was setting up a straw man. the chips act is so far away from beijing's command-and-control of economy, i could not draw more distance to that. these are private-sector firms that are using the lower caste -- lower cost of capital in the united states. i think it is extraordinary. the government is not going to run these factories, tell them how to produce, what to make, anything like that. there will be conditions for getting that capital, but it is going to give them a head start.

it is nothing like what we see, or the government literally owns hundreds upon hundreds of water called state owned enterprises that manufacture. they have no profit motive. all of these american companies are going to have profit motive. the other thing i would add is that we tried, i think, the purest approach, the free-market hands-on approach, for couple of decades, in terms of trying to compete with china. we have had lots of deregulation. none of that has made us in a more competitive position. he made corporations a lot richer. they are returning some of that to the united states, investing in factories here. they are going to give us a leg up. i agree with congress must -- with congressman barr, we should not be like china. the chips act is as far from that as we can possibly get. host: ylet's take a look at thes

act. itays 53 billion dollars in grants for semiconductor manufactur renewed focus on chid competitiveness with china? guest: i think a couple of things have produced a harmonic convergence of events. first, as i mentioned, before the pandemic, it brought into focus how dependent we are on china for things, ranging from edison to ppe, to semiconductors. i think that caused a bit of shock to the system. i remember this ship being stuck in the swiss canal and having to fly back and forth across the world, maybe we can simplify this a little bit. i think the theory changed a little bit as well. i will say, i have known for some time and policymakers are

making up -- are waking up to the fact that the commonest party, xi jinping, he wants to use the west and our technology, use our consumer base. he wants no other part of western values. he wants to re-create a chinese state that is both powerful, driven by the party, not aligned with market forces, and he kind of got what he wanted out of american companies, which was their technology, trillions of dollars in investment. now, he is saying, we are going to do this our way and send you to the highway. i think that also has driven some of this concern. host: and it's not just investment, its intellectual property he got from american companies. guest: that's exactly right. in some cases, it was given away, in terms of technology transfer and joint ventures. in other cases, it was stolen through industrial espionage or

a lack of enforcement. piracy of intellectual property. that added up to $600 billion in losses for the u.s. economy, which is a profound amount. but i think that is a big concern. something i heard during that hearing was that that's an issue that both democrats and republicans still definitely want to tackle here. host: we are going to start taking calls, but i have one more question about the bipartisan infrastructure law. what have we seen with that? what impacts have we seen to manufacturing capabilities? guest: that's a great question. as i was asked leaning before, one of the things we did not do a good job of is making our economy more competitive for the last couple of decades. the infrastructure act is a piece of that. we will be more efficient, have better broadband, transit, shipping. we will have that are logistic supply chain abilities within the united states. all of that is great. we have seen new orders come

into material suppliers for infrastructure. you have seen president biden, democrats and republicans, some of whom do not support this bill, are at ribbon cuttings for a lot of these projects. we are seeing a lot get done. there will be $1.2 trillion investment over the next five or six years to come out of the infrastructure bill. that is going to lift our efficiency, our competitiveness up in the manufacturing sector in a way we have not seen for many decades. host: let's go to the phones now. peter is up first in new york on the republican line. caller: good morning. esther paul, i saw you testify before congress. i had a couple of things to comment on. this issue about outsourcing started back in the 1970's, when i was a young man. this was bipartisan, republicans

and democrats. they allowed american companies to outsource their factories to china and other companies -- other countries because it was cheaper for them to produce goods and services -- i mean, goods, in these foreign countries and ship them to the united states rather than manufacture them here. the problem with the way we do business is that subsidizing manufacturing over here, i guess for example with the chips bill, is not the complete solution here. we tried that during the obama administration, making solar panels here in the united states. they went out of business because they could not compete with china. i think we need to adopt a policy that japan has, where companies who are manufacturing here in the united states cannot close down the manufacturing here. if they want to open up companies in other countries, fine.

they could possibly use the profits they make their to subsidize their companies here. that's fine. and if they decide to close down and go overseas, then we tax whatever they ship into the united states, so that companies that are producing here can make a profit. also what was not discussed during your testimony was what environmentalists played into this problem. with all the environmental regulations and every thing else that goes with it, it makes it more expensive to do business here in the united states. host: ok, peter. let's get a response. guest: thanks for the question. i think it's a good one. during the testimony, i did articulate, i think, how we have what is called the china price. it is an impossibly low price. if american firms cannot compete on a level playing field, then that's right, jobs are going to go overseas. but particularly with the case

of china, a lot of the advantage built up was artificial and unfair, partly because of a lack of enforcement of their labor rights laws or their own environmental laws. if you have seen the smog in beijing, we definitely don't want to stoop to that level. it is very bad. we saw currency manipulation that made their goods artificially cheaper coming into the united states, made our goods more expensive. we saw these trillions of dollars of government subsidies that may chinese factories more competitive. peter, i agree with you that investing in our semiconductor industry or any other industry alone is not going to do it. we also have to have a trade solution to that. part of what i think is helping drive some of this manufacturing back to the united states are the tariffs that are in place. >> we're going to leaf this program, you can watch it in its entirety at c-span.org. we take you life to the -- live to the house, considering