By Kenneth Rapoza, CPA Industry Analyst
Anthony Blinken: the US will build a “foreign policy for the middle class.” This will require a massive reindustrialization push, and a Biden administration willing to be at odds with multinational corporate interests that are increasingly global in nature.
Did Secretary of State Anthony Blinken just make free traders, and all their hopes for borderless, duty-free transactions, the equivalent of the steam engine? Perhaps free trade isn’t ready for the dustbins of history just yet. But in a speech this week, the new State Department chief certainly recognized what we have been saying for years at CPA: free trade was never free (we have the lowest tariffs in the world), and that many Americans have paid the price for it in lost living standards.
“We need to pass the right policies at home…while working to manage the global economy so it truly benefits the American people,” Blinken said on March 3 in a speech titled A Foreign Policy for the American People.
Blinken said that a rising GDP was not enough; a rising stock market was not enough.
“I mean good jobs, good incomes, and lower household costs for American workers and their families,” he said. “We’re building on hard lessons learned. Some of us previously argued for free trade agreements because we believed Americans would broadly share in the economic gains — and that those deals would shape the global economy in ways that we wanted. We had good reasons to think those things. But we didn’t do enough to understand who would be negatively affected and what would be needed to adequately offset their pain, or to enforce agreements that were already on the books and help more workers and small businesses fully benefit from them.”
CPA believes that one of the best ways to offset that pain is to reindustrialize. The number of Americans working in blue collar, non-STEM fields that do not require tens of thousands of dollars in student loan debt has been cut in half since the 1970s. Most of it was offshored, and increasingly so in 2001 when China entered the World Trade Organization. That’s when American foreign policy, and American businesses of all sizes, discovered that it was cheaper to make everything in China. Now China, and more broadly Asia, has become the go-to manufacturing hub for the new economy — from semiconductor chip manufacturing, to solar panels, robots and increasingly EV car batteries.
If we create policies that take a bite out of our imports, and return that business to domestic manufacturing, then we will be on the right track.
Blinken said that the Biden approach “will be different.” So far, it certainly looks different than the global-minded Clinton, Obama and Bush vision and a lot closer to Trump’s “America First” view.
“We will fight for every American job and for the rights, protections, and interests of all American workers,” he said. “We will use every tool to stop countries from stealing our intellectual property or manipulating their currencies to get an unfair advantage. We will fight corruption, which stacks the deck against us. And our trade policies will need to answer very clearly how they will grow the American middle class, create new and better jobs, and benefit all Americans, not only those for whom the economy is already working.”
We are pleased to hear this mea culpa from Blinken. It helps mainstream the idea that a country’s main duty is the well being of its citizens and its own national interests. Global interests need to take a back seat. As always, CPA will be looking beyond the words of our political leaders and will be calling for action.