WASHINGTON — Bipartisan legislation that would prohibit the use of federal funds to buy transit vehicles from state-owned Chinese manufacturers appears closer to passing after the White House voiced its support in a letter to Congress.
Both the House and Senate attached similar amendments to the annual defense authorization bill, which must be enacted by Oct. 1, 2019. They differ only in that the House version applies strictly to rail vehicles while the Senate version also includes buses.
“It is critical that such prohibitions cover procurement of all rolling stock transit vehicles to ensure the Nation’s economic and national security and to prevent the use of Federal dollars to support foreign state-controlled enterprises,” states the letter from Russell Vought, acting director of the Office of Management and Budget, endorsing the Senate’s broader language.
The key target of the legislation is Chinese railcar maker CRRC Corp. [See “Railcar manufacturer CRRC a target in U.S.-China trade war,” Trains News Wire, June 25, 2019], which currently has contracts with the Massachusetts Bay Transportation Authority, the Southeastern Pennsylvania Transportation Authority, the Chicago Transit Authority and LA Metro. Those contracts would be grandfathered in.
Of greater concern to those transit agencies is the continuing viability of CRRC to maintain its business in the United States, says the MBTA’s general manager, Steve Poftak. [See “MBTA chief discusses challenges, progress,” Trains News Wire, July 30, 2019]. Warranty issues, future upgrades or other continuing needs could be compromised if the company left the U.S.
Steelworkers, the steel industry, freight car manufacturers and the Alliance for American Manufacturing have spent heavily to lobby Congress for the ban.
In passing the Senate bill, Sen. John Cornyn said, “China poses a clear and present danger to our national security and has already infiltrated our rail and bus manufacturing industries.”
CRRC manufactures railcars, starting from steel shells imported from China, at plants in Chicago and Springfield, Massachusetts. Marina Popovic, legal counsel for CRRC Sifang America, the company’s Chicago subsidiary, tells Trains that “it takes very seriously the fact that it needs to be in the United States to be a U.S. manufacturer.”
The legislation also requires transit agencies to develop cybersecurity plans and identify hardware and software that should be tested by an independent third party.
A House-Senate conference committee will meet soon to finalize the appropriations bill before sending it to the president for his signature
It has been the need of American investors to get such a high return on their money that curtailed building rail, particularly passenger and transit rail, in the US. Thus off shore manufacturers have been the only source. Legislation such as that here forcing buyers to “buy American” only is disingenuous to the buyers because they have no control over who the manufactures are but run up the costs to public agencies who purchase.
I’m reminded of years back when the push was on to “buy American”. One municipality went so far as to say that anything they bought had to be 100% American made and built. Their police department then had to buy the only vehicle that fit that criteria. The police department found the only vehicle that fit those standards was a Volkswagen so that is what they bought for police cars.
There was a day when we would have built them. Too bad that time and mentality has passed.
Gotta watch them thar Chinese rail cars. They’ll infect our cyberstructure and bring it to life and not in a good way. Haven’t you seen the Terminator movies?
The above comments are generic in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. Go find your own paranoid rabble rouser.
GERALD – Excellent post and the further you get toward your last sentence the better your post gets.
If this is a real issue that people truly care about, then everyone should stop buying Walmart crap, as most is made in China. And iPhones, androids, electronics, etc. The transit market pales in comparison to those, yet Drumpf can chest thump and make headlines. Sad!
It’s quite apparent from some posts that a few people on here(Jim Norton, Robert Drake) live under a rock and don’t understand today’s world. There are no borders when it comes to commerce(no matter what you might think, eventually, some how American products are getting into North Korea as we speak, just like they are Iran).
Railroads and rail car manufacturing fall under the Global commerce and we will never be able to compete globally with the way the American tax structure is set up. The corporate tax reduction from last year was not a bad idea, just the implementation was off base. The best way to have done that would have been to apply the reduction to goods and services produced within the United States, and at the same time raised the tax rate on those goods and services produced overseas and imported into the U.S.(while also stipulating that at 20% of savings must be passed on to workers, and not executives or Wall Street).
That’s a simplified version but that would still have helped the railroads and all other forms of transportation(without inflating our debt to much).
If Congress and the White House thinks China needs buses and rail cars to wreck havoc on us I have beach front property and a bridge to sell them for cheap.
Next the budget hawks will be saying we can’t afford transit because the vehicles and parts are too expensive!
@Mr Landey.. The problem with today.. People want to eat
their cake too..Let’s add this.. If that’s the case then we need to ban supplying defense equipment and vehicles to foreign nations, but nobody is quipping about that..
Per the late Gov. George Wallace, there isn’t a dime’s worth of difference between the Republicans and the Democrats. Neither party understands the economic necessity of free trade or free markets. The only thing either party (both parties) understand is economic stagnation and downturn, most of which is created in and flows from inside the Beltway.
Most politicians and most Americans think we should restrict buying from other countries while encouraging other countries to buy from us. Only an idiot would think that possible but we are a nation of 350 million idiots who elect idiots to office.
Face it people, you each spend thousands of dollars each year buying Chinese-made products because these are cost-effective, but then you turn around and expect our economy to develop a cost-competitive railcar industry. It doesn’t work that way.
Good move. Besides, China is blowing us out of the water with passenger rail projects. They should have enough business to keep them very busy at home.
If the parts, materials, manufacture and assembly were all from a foreign run government entity, I can see the issues involved.
If the entity is simply a US subsidiary and everything is sourced, supplied and assembled here, then the issues are moot.
Hopefullly the day is near when we will manufacture our own railcars again