And there’s bipartisan agreement that significant change is needed to get the job done.
Members of Congress from both sides of the aisle agree: The coronavirus crisis proves it is time to get to work and bring America’s critical manufacturing home.
Republican Sens. Marco Rubio (Fla.) and Josh Hawley (Mo.) joined Democratic Sens. Tammy Baldwin (Wis.) and Sherrod Brown (Ohio) on Thursday for the Alliance of American Manufacturing’s “Crisis Brings Consensus” digital conference. The two-hour online event examined why it has been so difficult for the United States to respond to the pandemic, and what lessons the U.S. embrace moving forward.
Despite the efforts of many individual U.S. manufacturers to make of critical personal protective equipment (PPE) and other medical supplies need by health care workers and essential employees, the United States was woefully unprepared to ramp up production of the things we needed most. That almost certainly cost lives.
But every crisis also can lead to opportunity, and Thursday’s event made clear that this moment may be when the United States decides to get serious about reshoring critical manufacturing.
“The coronavirus pandemic and the crisis it has caused has really opened people’s eyes to our dependence from a production, manufacturing perspective, on China,” Hawley said. “I haven’t been in the Senate very long… but I’ve heard more talk in the last four weeks about the need to bring back production in this country than I have in the last year and four months put together.”
Rubio, the new acting chairman of the Senate Intelligence Committee, agreed that there’s a growing drive on Capitol Hill to bring manufacturing back. Part of that effort must center on rebalancing our trade relationship with China, he said.
“Our problem is that the Chinese communist party… is undertaking an effort to dominate the world in key sectors that are going to be critical to the 21st century, and our policies are letting them do it,” Rubio said.
The issue with China goes much deeper than “how much we sell them and how much they sell us,” Rubio said.
“It’s about the things that are made in China that we depend on for our national security… we cannot have so much of the things that we depend on, the manufacturing of it, concentrated in a country that has clear plan to undermine us,” he added.
Baldwin pointed out that China is very good at finding ways to use our systems to benefit its own needs. For example, Baldwin was among the Senators who sponsored legislation that was passed into law last year to ban Chinese state-owned, controlled or subsidized companies from building U.S. rail cars and buses.
These companies were severely underbidding others for taxpayer funded transit contracts, then building rail cars and buses in China and shipping them to the U.S. for minimal processing. This completely undercut the free market and was part of China’s attempt to control the entire global industry.
“We can’t let them look for the loopholes. We’ve got to be savvy,” Baldwin said.
Hawley, who has garnered attention for his stance that the World Trade Organization should be abolished, said that he would like to see new international institutions emerge to handle 21st century issues. The problem, he said, is that the WTO simply wasn’t set up to handle an “imperialist China.”
“There’s nothing that’s more American… than fighting for an economy where producers, where workers, can support themselves and their families,” Hawley said. “We need to get a global trade order and an international security system that permits that, and facilitates that.”
Another point of consensus among the Members was the need for the United States to rethink its decades-long strategy of offshoring manufacturing. Brown noted that companies are actually given tax incentives to close down U.S. operations and ship production abroad – something that has got to change.
“That’s why we didn’t have the protective equipment we need,” he added.
It’s time to align trade and tax policy with our national interest, creating jobs and ensuring we have the things we need in a crisis like this, Brown added. It’s just too enticing for American companies to offshore.
“Always look at this through the eyes of workers. If you do that, you’re going to pass better trade policy, you’re going to pass better tax policy,” Brown said.
Even Rubio, a vocal supporter of free market policies, noted that the current crisis should “open our eyes to how far apart Wall Street and the economy are.”
“You can have a great day at the stock market and it absolutely reflects not whatsoever on the vast majority of the economic lives of most Americans,” Rubio said.
He later added: “It may be more efficient to rely on China for the active ingredients in pharmaceuticals… it is not in our national interest for that to be the case.”
Also joining the Members for Thursday’s event were Drew Greenblatt, president and owner of Marlin Steel Wire Products; Emily de la Bruyere, a cofounder of the research firm Horizon Advisory; Roxanne Brown, international vice president at large of the United Steelworkers; and Kim Glas, president and CEO of the National Council of Textile Organizations.
Stay tuned next week in this space, where we will share our thoughts on many of the questions posed by audience members during the conference that we didn’t get a chance to answer during the event itself.