Ad Watch: Michigan Democrats call James’ tough-on-China stance hypocritical. Is it?

In a digital attack ad, the Michigan Democratic Party says the tough-on-China stance Republican Senate candidate John James has taken during the campaign is inconsistent with his own business practices.

James is the president of James Group International, a logistics and warehousing company primarily serving the automotive industry, which relies heavily on extensive supply networks in China for basic components.

The Democrats’ ad cites shipping records to make the case that James is profiting from his company’s trade relationship with China, even as he criticizes China’s trade policy.

Given James’ comments — including his plea for the world to "socially distance itself from the Chinese Communist Party" and to "buy American" — the party claims James is "misleading voters by hypocritically talking tough on the Chinese government while he enriches himself from his business dealings with China."

But it’s not uncommon for U.S. business leaders to chafe at Chinese trade policies, while also seeking closer business ties and profit opportunities with Chinese enterprises, either through imports or exports. Many business leaders oppose an all-out trade war with China or a cutoff of trade ties, and argue that staying engaged in the mammoth Chinese economy through trade is ultimately good for U.S. producers and consumers.

"It need not be hypocritical to talk tough about China while also doing business with China," said Alan Deardorff, an economist at the University of Michigan who specializes in international trade.

During the campaign, James has condemned "the Chinese government’s long-term strategy to hollow out America’s manufacturing base" and called for a tough response to China’s "predatory trade practices, currency manipulation, dumping, intellectual property theft, espionage, cyber and information warfare."

But James hasn’t called for ending U.S. trade with China. In fact, he has called for helping businesses boost exports to China.

Deardorff said that if James engaged in trade with China while arguing against it, James’ criticism of China would be inconsistent with his business dealings. But that’s not James’ position.

Does James profit from doing business with China?

The logistics industry is integral to both sides of the trade ledger by helping manufacturers with factories around the world manage their supply chains and delivery schedules. For the auto industry, that could mean bringing Chinese-made parts to assembly plants in the U.S., or preparing finished, U.S.-made parts or U.S.-assembled vehicles for shipment to China and other countries. Some logistics companies, including James Group, also help manufacturers assemble parts.

James’ company is involved in shipments to China.

The Michigan Democratic Party shared records it says it obtained from ImportGenius, a database that tracks shipping activity, showing shipments from James’ company to China. The records include hundreds of shipments over a decade sent from James Group International’s address to Changan Ford, the joint venture between Ford Motor Co. and China’s Changan Automobile Co. that makes small cars in China.

Almost every shipment is listed as containing new auto parts. Ford confirmed that it uses Renaissance Global Logistics — a James Group subsidiary — to export U.S. auto parts to Ford plants located outside the U.S.

The Michigan Democratic Party also shared audio reportedly from a 2017 GOP fundraiser. In the recording, James can be heard discussing the shipments. "We build those parts in Michigan, we consolidate all of the goods for Ford Motor Company with production parts from all over the United States and we put them in containers and we ship them."

James goes on to explain that this arrangement benefits American workers. "We say, ‘No China, we’re going to give you the parts. You can do what you want to America to build our cars, but we’re going to make money on it. We’re going to keep our jobs here.’"

James’ company also appears to handle goods imported from China, although these shipments seem to make up a much smaller share compared with the export side of the business.

The Michigan Democratic Party shared images of several containers that it says were found at the company’s lot. PolitiFact Michigan could not independently confirm the authenticity of the photographs. The party also shared shipment reports from Panjiva, a global supply chain tracker, that show Renaissance Global Logistics’ involvement in 33 shipments from China between 2017 and 2019.

These include shipments to Renaissance Global Logistics from an auto brake manufacturer based in China and shipments to General Motors’ customer care and after-sales headquarters in Grand Blanc, Michigan.

James Group International did not respond to a request for comment. Its website notes that it makes 11.6 million shipments a year and serves 25 countries. So the 33 shipments from China listed by Panjiva over two years seem to constitute a fraction of the company’s shipping activity.

The shipping records shared by the Michigan Democratic Party come from third-party data sources rather than James' company and may not represent a complete picture of the company's business dealings.

Are James’ business dealings consistent with his public stance toward China?

James, for his part, has argued that exports to China are good for the U.S. economy.

In a deleted video from James’ 2018 campaign against Sen. Debbie Stabenow the Michigan Democratic Party shared with PolitiFact Michigan, James talks about how the Republican-backed 2017 tax law can "support those in the automotive industry so that we export the parts and not the jobs to places like India and China."

Stabenow herself made the same point during a debate against James in 2018. "I want to make sure we’re exporting our products, not our jobs," Sen. Stabenow stated.

While James’ campaign has focused on the export side of the company’s business, the import business isn’t necessarily a political liability, Deardorff said. "Could the Chinese value-added have been done by workers here? Perhaps," he said. "But if costs are lower there than here, then doing it here would raise the costs and thus the prices of cars," he added. This would make the U.S.-made products less competitive with foreign products.

But the Michigan Democratic Party maintains that James’ position on China is disingenuous and that he tried to cover up his business dealings, citing the deleted video sharing his thoughts on the 2017 tax law and another that shows James walking around his company’s warehouse where Chinese flags can be seen in the background. "James’ hypocritical move to say one thing and do another, and then try to hide the evidence, shows Michiganders that they can’t trust him," said party spokesperson Elena Kuhn.

The party points out that in a Fox News opinion piece, James discussed the "danger of America’s supply chain being reliant upon other nations, notably communist China, for the critical goods and services we need."

In this piece, James was referring not to basic consumer goods, but to critical medical supplies such as personal protection equipment, ventilators and pharmaceuticals. James’ company does not appear to import these products from China.

Deardorff said that other companies likely share James’ stance toward China. "I'm sure that many companies that operate in China would also be critical of China's policies," Deardoff said. "They might be reluctant to be openly critical, since their Chinese hosts might be unhappy, but it wouldn't be hypocritical."