Democrats on the Economic Growth, Energy Policy, and Regulatory Affairs Subcommittee—of the House Committee on Oversight and Government Reform—are united against tariffs. That was evident in the April 29 hearing titled “Made in the USA: Igniting the Industrial Renaissance.” For these Members, it was a lost opportunity to weigh in on the subject at hand: how does America build the factories of the future so that it can reshore? What policies are needed to protect the government’s investments in things such as the ‘CHIPS Act,’ or are we eventually going to have to sit back and watch as companies like Intel decide it’s cheaper to make advanced chips in Mexico and Asia, all coming at great loss to American know-how and high-skilled labor. Instead, words like “chaos” and talking points like “the Trump tariffs” were repeatedly thrown around to criticize the barrage of trade policies the White House announced on April 2.
Rep. Ro Khanna (D-CA-17) was especially disappointing. In numerous hearings, Khanna has been a stalwart in favor of reshoring. Steve Bannon, a Trump acolyte and host of the popular War Room podcast, praised him during a sit-down interview with California Governor Gavin Newsom in back March.
“For too long in this country we have seen industries go offshore, Wall Street profits double, manufacturing gets halved, and places in Pennsylvania and Ohio get decimated while wealth piles up in Silicon Valley,” Khanna said. “I think Steve Bannon and others are correct—we should not have allowed unfettered globalization,” he toldCNN in March.
But on Tuesday, Khanna came out guns blazing against any sort of protective measures for American manufacturing. Instead, he berated three witnesses into saying whether or not they agreed tariffs were a good idea.
“We are not impacted by tariffs because our entire supply chain is onshore,” said Chris Power, Founder and Chief Executive Officer of Hadrian. “I think we are going to start to see tariffs work over the next 90 days and—I support tariff policies,” he said, all the while navigating three interruptions by Khanna.
“We are focused on building companies here in the U.S. We represent private companies who are doing just that, and are not here to talk about theories on tariffs,” Austin Bishop, Chief Executive Officer of New American Industrial Alliance (NAIA) pushed back until Khanna’s time ran out on him. [Testimony]
In his opening remarks, Subcommittee Chairman Eric Burlison (R-MO-7) gave a quick history lesson on U.S. manufacturing. “We left World War II the richest country on Earth in part because of our industrial prowess but as time went on and the Cold War ended, unprecedented globalization took hold,” he said. “Instead of manufacturing innovation, we sold off our birthright as a manufacturing hub and shipped it off to foreign countries and lost our manufacturing base. We also overregulated industry and created enormous obstacles to permitting new factories. And our share of global manufacturing fell to 16% from 40% in the 1950s and we lost millions of skilled labor jobs and communities across the country were harmed.”
According to an October reportby the United Nations Industrial Development Organization, the U.S. share of global manufacturing output will go from around 25% in 2000, down to 11% by 2030. China’s meanwhile will go from 6% in 2000, up to a whopping 45% of world manufacturing output by 2030.
Elected officials have been talking just like Burlison basically since the 1980s, when outsourcing was going ahead full steam, and yet nothing was done to curb it. Free trade was suddenly the remedy for everything, as if competing with a billion-plus workers in Asia for labor was the no-brainer idea for the future of American industry and its labor force.
Tariffs became part of the modern day lexicon to tackle China back in 2017 under President Trump. Then on May 14, 2024 then-President Biden kept “the Trump tariffs” in place for another four years while adding new ones as high as 100%. As present-day politics in America go, Democrats loved the move at the time naturally. The Financial Times columnist Rana Foroohar called them smart. Today, she is sayingChina is “laughing all the way to the bank.”
Who Will Lead the Fourth Industrial Revolution?
Back to the hearing—besides the partisan arguments made against blanket tariffs and in favor of things like the ‘Inflation Reduction Act of 2022’ (IRA), which helped domestic solar producers, the main takeaway from the hearing came from each of the witnesses.
Their primary message was this: We are now in a fourth industrial revolution. New automated, software-driven factories are going to power it. It is not only important what the factory makes. It is just as important what machines are being used to make a product out on the factory floor, and also who are the manufacturers of those machines? Think of Star Wars-like factories with lasers and robots and automated guided vehicles (AGV). That’s now happening. China is building them, relentlessly. Some of their companies are becoming world leaders in AGVs. If they beat the U.S. on manufacturing these automation tools, China will not only have pricing power over the U.S. because of labor, they will be more efficient and productive, too.
Then the UN would have to revisit their numbers; the U.S. at 11% of global manufacturing might look generous if the country is not building the factories of the future. The kicker: you only get to build factories of the future if you make things here in the first place.
“I founded Divergent because I saw what happened to America’s industrial core. We didn’t just outsource jobs—we outsourced our national strength,” said Kevin Czinger, Founder and Executive Chairman of Divergent 3D. [Testimony] Divergent engineers and builds 3D printed manufactured goods for the defense and the luxury automotive industry, to name a few niche sectors. “We gave China the lead. Now, we need a fix. This can’t be done through traditional, incremental steps,” Czinger told the Committee. “We must fundamentally rethink manufacturing. This is our chance to reindustrialize with purpose.”
Why Automation is Necessary
Automation, as they put it, is not about replacing workers, but about giving them more opportunities to work in a thriving, modern manufacturing plant. China is automating, which helps them scale up production quickly. Automation will also help the U.S. overcome manufacturing labor shortages.
In just the last five years, more than 17,000 companies left the defense business, and the U.S. Department of Defense found that the number of small suppliers in our defense industrial base has fallen by over 40% in just the past decade. This erosion of industry has made China indispensable, said Chris Power, CEO of Hadrian, a contract manufacturer focused on building these factories of the future.
“China made industrial capacity the centerpiece of its national strategy. They have scaled manufacturing on a breathtaking level across sectors from shipbuilding to electronics. And they are now the world’s sole manufacturing superpower, accounting for roughly three times the manufacturing output of the United States,” Power said. [Testimony] “In shipbuilding, China’s capacity dwarfs ours—by one estimate, China has over 5,000 commercial ships flying its flag versus fewer than 100 for the United States,” Power said, adding, “Beijing’s strategic playbook is clear: build, build, build.”
Democrat Witness: Strategic, Protective Tariffs Work
Even though the Democrats were largely against tariffs, citing the usual studies about how tariffs will cost Americans $4,900 per year, their main witness was Adam Hersh, Senior Economist at the Economic Policy Institute (EPI) [Testimony], who said that tariffs work. Hersh was critical of the rollout of the new tariff policy, which was fair enough, and kept with the long-standing EPI position that protective tariffs were an important tool. “I guess I’m the only one up here who supports tariffs in theory and when the tariff is targeted and strategic it can be an effective tool for supporting industrial development,” Hersh said.
For years, Washington has issued reports on the pros and cons of free trade, and how to support U.S. industries with more government spending, which is often necessary. Then-President Obama tried to support solar, but without protective tariffs, domestic solar companies folded thanks to Chinese overproduction, transshipment strategies, and import penetration.
Still, it seems clear that many Democrats on the Committee do express support for reshoring. The best that can be said is that they were not against tariffs, per se, but against the way they were introduced, either as a matter-of-fact critique, or as a partisan position to oppose the Trump Administration. The only thing the Democrats were able to put forth as a better solution were again things like CHIPS and IRA, two laws that Trump has often criticized.
A “Once in a Generation Opportunity”
Onshoring is happening. Tariffs, much like CHIPS and the IRA, have led companies like Nvidia to announce new investments, or have led some to make statements about increasing capacity at existing factories, as General Motors has done. These companies will also need workers for sales, construction, management, and maintenance, representing millions of jobs that will not require a four-year degree, said Bishop of NAIA.
“De-industrialization was a choice, based on flawed ideologies and short term strategies. Cheap labor abroad, coupled with burdensome regulations, have hallowed out manufacturing while the S&P made record highs,” Bishop said. “By investing in a modern industrial base, we can rebuild a middle class that is not only larger but better equipped for the demands of the 21st-century. This is a once in a generation opportunity.”
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
Democrats on House Oversight Committee Unite Against Tariffs; Witnesses Tout Need for ‘Factories of the Future’ to Compete Against China
Democrats on the Economic Growth, Energy Policy, and Regulatory Affairs Subcommittee—of the House Committee on Oversight and Government Reform—are united against tariffs. That was evident in the April 29 hearing titled “Made in the USA: Igniting the Industrial Renaissance.” For these Members, it was a lost opportunity to weigh in on the subject at hand: how does America build the factories of the future so that it can reshore? What policies are needed to protect the government’s investments in things such as the ‘CHIPS Act,’ or are we eventually going to have to sit back and watch as companies like Intel decide it’s cheaper to make advanced chips in Mexico and Asia, all coming at great loss to American know-how and high-skilled labor. Instead, words like “chaos” and talking points like “the Trump tariffs” were repeatedly thrown around to criticize the barrage of trade policies the White House announced on April 2.
Rep. Ro Khanna (D-CA-17) was especially disappointing. In numerous hearings, Khanna has been a stalwart in favor of reshoring. Steve Bannon, a Trump acolyte and host of the popular War Room podcast, praised him during a sit-down interview with California Governor Gavin Newsom in back March.
See CPA’s Trade Counsel Charles Benoit discuss tariffs and Trump’s first 100 days on the War Room.
“For too long in this country we have seen industries go offshore, Wall Street profits double, manufacturing gets halved, and places in Pennsylvania and Ohio get decimated while wealth piles up in Silicon Valley,” Khanna said. “I think Steve Bannon and others are correct—we should not have allowed unfettered globalization,” he told CNN in March.
But on Tuesday, Khanna came out guns blazing against any sort of protective measures for American manufacturing. Instead, he berated three witnesses into saying whether or not they agreed tariffs were a good idea.
“We are focused on building companies here in the U.S. We represent private companies who are doing just that, and are not here to talk about theories on tariffs,” Austin Bishop, Chief Executive Officer of New American Industrial Alliance (NAIA) pushed back until Khanna’s time ran out on him. [Testimony]
In his opening remarks, Subcommittee Chairman Eric Burlison (R-MO-7) gave a quick history lesson on U.S. manufacturing. “We left World War II the richest country on Earth in part because of our industrial prowess but as time went on and the Cold War ended, unprecedented globalization took hold,” he said. “Instead of manufacturing innovation, we sold off our birthright as a manufacturing hub and shipped it off to foreign countries and lost our manufacturing base. We also overregulated industry and created enormous obstacles to permitting new factories. And our share of global manufacturing fell to 16% from 40% in the 1950s and we lost millions of skilled labor jobs and communities across the country were harmed.”
According to an October report by the United Nations Industrial Development Organization, the U.S. share of global manufacturing output will go from around 25% in 2000, down to 11% by 2030. China’s meanwhile will go from 6% in 2000, up to a whopping 45% of world manufacturing output by 2030.
Elected officials have been talking just like Burlison basically since the 1980s, when outsourcing was going ahead full steam, and yet nothing was done to curb it. Free trade was suddenly the remedy for everything, as if competing with a billion-plus workers in Asia for labor was the no-brainer idea for the future of American industry and its labor force.
Tariffs became part of the modern day lexicon to tackle China back in 2017 under President Trump. Then on May 14, 2024 then-President Biden kept “the Trump tariffs” in place for another four years while adding new ones as high as 100%. As present-day politics in America go, Democrats loved the move at the time naturally. The Financial Times columnist Rana Foroohar called them smart. Today, she is saying China is “laughing all the way to the bank.”
Who Will Lead the Fourth Industrial Revolution?
Back to the hearing—besides the partisan arguments made against blanket tariffs and in favor of things like the ‘Inflation Reduction Act of 2022’ (IRA), which helped domestic solar producers, the main takeaway from the hearing came from each of the witnesses.
Their primary message was this: We are now in a fourth industrial revolution. New automated, software-driven factories are going to power it. It is not only important what the factory makes. It is just as important what machines are being used to make a product out on the factory floor, and also who are the manufacturers of those machines? Think of Star Wars-like factories with lasers and robots and automated guided vehicles (AGV). That’s now happening. China is building them, relentlessly. Some of their companies are becoming world leaders in AGVs. If they beat the U.S. on manufacturing these automation tools, China will not only have pricing power over the U.S. because of labor, they will be more efficient and productive, too.
Then the UN would have to revisit their numbers; the U.S. at 11% of global manufacturing might look generous if the country is not building the factories of the future. The kicker: you only get to build factories of the future if you make things here in the first place.
“I founded Divergent because I saw what happened to America’s industrial core. We didn’t just outsource jobs—we outsourced our national strength,” said Kevin Czinger, Founder and Executive Chairman of Divergent 3D. [Testimony] Divergent engineers and builds 3D printed manufactured goods for the defense and the luxury automotive industry, to name a few niche sectors. “We gave China the lead. Now, we need a fix. This can’t be done through traditional, incremental steps,” Czinger told the Committee. “We must fundamentally rethink manufacturing. This is our chance to reindustrialize with purpose.”
Why Automation is Necessary
Automation, as they put it, is not about replacing workers, but about giving them more opportunities to work in a thriving, modern manufacturing plant. China is automating, which helps them scale up production quickly. Automation will also help the U.S. overcome manufacturing labor shortages.
In just the last five years, more than 17,000 companies left the defense business, and the U.S. Department of Defense found that the number of small suppliers in our defense industrial base has fallen by over 40% in just the past decade. This erosion of industry has made China indispensable, said Chris Power, CEO of Hadrian, a contract manufacturer focused on building these factories of the future.
“China made industrial capacity the centerpiece of its national strategy. They have scaled manufacturing on a breathtaking level across sectors from shipbuilding to electronics. And they are now the world’s sole manufacturing superpower, accounting for roughly three times the manufacturing output of the United States,” Power said. [Testimony] “In shipbuilding, China’s capacity dwarfs ours—by one estimate, China has over 5,000 commercial ships flying its flag versus fewer than 100 for the United States,” Power said, adding, “Beijing’s strategic playbook is clear: build, build, build.”
Democrat Witness: Strategic, Protective Tariffs Work
Even though the Democrats were largely against tariffs, citing the usual studies about how tariffs will cost Americans $4,900 per year, their main witness was Adam Hersh, Senior Economist at the Economic Policy Institute (EPI) [Testimony], who said that tariffs work. Hersh was critical of the rollout of the new tariff policy, which was fair enough, and kept with the long-standing EPI position that protective tariffs were an important tool. “I guess I’m the only one up here who supports tariffs in theory and when the tariff is targeted and strategic it can be an effective tool for supporting industrial development,” Hersh said.
For years, Washington has issued reports on the pros and cons of free trade, and how to support U.S. industries with more government spending, which is often necessary. Then-President Obama tried to support solar, but without protective tariffs, domestic solar companies folded thanks to Chinese overproduction, transshipment strategies, and import penetration.
Still, it seems clear that many Democrats on the Committee do express support for reshoring. The best that can be said is that they were not against tariffs, per se, but against the way they were introduced, either as a matter-of-fact critique, or as a partisan position to oppose the Trump Administration. The only thing the Democrats were able to put forth as a better solution were again things like CHIPS and IRA, two laws that Trump has often criticized.
A “Once in a Generation Opportunity”
Onshoring is happening. Tariffs, much like CHIPS and the IRA, have led companies like Nvidia to announce new investments, or have led some to make statements about increasing capacity at existing factories, as General Motors has done. These companies will also need workers for sales, construction, management, and maintenance, representing millions of jobs that will not require a four-year degree, said Bishop of NAIA.
“De-industrialization was a choice, based on flawed ideologies and short term strategies. Cheap labor abroad, coupled with burdensome regulations, have hallowed out manufacturing while the S&P made record highs,” Bishop said. “By investing in a modern industrial base, we can rebuild a middle class that is not only larger but better equipped for the demands of the 21st-century. This is a once in a generation opportunity.”
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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