It’s time to repatriate manufacturing and mining operations.
For years, Wall Street enthused about the merits of shifting manufacturing out of the United States. Globalists on Wall Street advocated a simplistic worldview: It doesn’t matter where things are made, cheaper is better. But they overlooked the impact this would have on America’s economic and national security. And now, decades later, the United States has lost almost 90,000 factories, according to research from the Economic Policy Institute, nearly 5 million manufacturing jobs, and a wide array of essential supply chains.
[Michael Stumo | September 8, 2020 | Dallas Morning News]
This industrial loss has largely been China’s gain. In 2000, for example, the U.S. enjoyed a $5 billionannual trade surplus in advanced technology products, according to Census data. By 2019, however, that had shifted to a $133 billion annual deficit. Pharmaceutical production has been eviscerated, too. Much of the generic medications that Americans use each day are now imported. And even the raw materials for manufacturing overwhelmingly come from imports. China is the dominant supplier for 23 of the 35 metals and minerals that the Department of Interior deems critical for U.S. national security.
China’s manufacturing boom has come on the back of horrific environmental and labor practices that have been conveniently ignored for too long. Each year, a massive brown cloud of soot and debris drifts east from mainland China. And Chinese factories spew an estimated 40,000 tons of ozone-depleting carbon tetrachloride into the atmosphere annually in violation of international agreement.
It’s impossible to excuse these practices, and even free-trade advocates are waking up to China’s ugly behavior. Such behavior has allowed China to gradually surpass America’s high-tech lead and has finally prompted congressional action. Recently, a bipartisan group of senators introduced bills to aid U.S. semiconductor producers and microelectronics manufacturers that compete with China.
These are important efforts. But will they come in time? Beijing is intent on economic dominance and has already launched a Made in China 2025 campaign to overtake key industries like information technology, robotics, aerospace, electric vehicles and medical devices.
Wireless networks and renewable energy systems will likely be key parts of China’s growth strategy. And that leaves the United States in a particularly poor position. Beijing already holds a major advantage in the production and processing of raw materials for high-tech industries. That gives it preferential access to the building blocks of everything from lithium-ion batteries to solar panels. And every iPhone that Americans purchase helps to fund irresponsible mining projects.
Despite possessing its own mineral reserves, the U.S. still imports billions of dollars worth of metals and minerals each year. This is especially relevant for rare earth metals such as neodymium, dysprosium, and lanthanum that are used to manufacture electric vehicles, wind turbines, and smartphones. In fact, China supplies roughly 80% of the rare earths imported by the United States, according to Reuters.
If Congress is serious about bolstering our national and economic security, it must prioritize the rebuilding of key industries. A bipartisan Senate bill introduced in May would allocate $10 billion to establish regional technology hubs. That’s a helpful start, but far more is needed. The U.S. must aim for greater industrial self-sufficiency and start producing more of the raw materials, such as lithium, graphite, nickel and rare earths, needed for 21st century technologies.
To reduce strategic vulnerabilities and lessen global environmental harm, Congress should speed the domestic production of key metals and minerals. The U.S. already adheres to the world’s strictest mining safety and environmental standards. It makes no sense to tolerate China’s continued stranglehold over these key commodities. It’s time for Congress to pursue a comprehensive, bipartisan strategy to win the global competition for good jobs and industries.
Michael Stumo is chief executive of the Coalition for a Prosperous America, follow him @michael_stumo
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