If there’s one overarching economic lesson the coronavirus pandemic is teaching us, it’s that the United States has become over-reliant on other nations for critical manufacturing capacity. It’s time we brought this production home.
As the pandemic struck here, U.S. authorities found themselves scrambling for all sorts of medical supplies that are mostly produced overseas. From surgical masks to ventilators to pharmaceuticals, America’s hospitals and health care workers were left at the mercy of foreign companies.
But those companies often had other priorities. When the pandemic began in Wuhan, China, Chinese authorities mandated that production of critical health care supplies be channeled to domestic use. This “China first” policy left the American health care system short of the items we need to fight the virus here.
The U.S. has scrambled valiantly to make up these deficiencies, with our companies converting their production to make these critical medical supplies. In the best example of this, General Motors, in a matter of weeks, converted an auto parts manufacturing facility in Indiana to the manufacture of ventilators. Now, as the demand for ventilators is subsiding in the U.S., these machines can be exported to other nations that need them. American enterprise and inventiveness will come to the rescue of sick patients around the globe.
That model of self-sufficiency should guide American manufacturing policy from now on. The entire supply chain should be examined for all of our critical industries, to incentivize bringing production back home. Health care workers shouldn’t be left short of masks and gowns. Patients shouldn’t be deprived of life-saving equipment and medicine.
One thing Congress should immediately reinstate is a tax incentive that for years helped keep production of pharmaceuticals much closer to home. It made Puerto Rico a major manufacturing center for critical drug supplies. But when it was allowed to expire, the production of these drugs moved mostly to Asia. Bringing this production nearer to home again is in America’s national security interest, and could help revive Puerto Rico’s moribund economy.
That’s not the only manufacturing that should be brought home. The world economy runs on computer chips. They’re in everything we use. And America has a great chip industry. But other nations heavily support their production of computer chips, and then dump them in the U.S. at below true cost.
The Trump administration is wisely reviewing U.S. trade policy in this area, and there is great promise that much of the world’s future computer chip production could take place right here. New York is particularly well positioned to take advantage of this new manufacturing surge, because we have some of the world’s premier computer chip research, development and manufacturing capability.
There are other areas where this clearer-eyed trade and manufacturing policy should prevail. In the most recent financial rescue package, U.S. airlines were given substantial relief, totaling some $25 billion. That’s understandable, because they are suffering dramatic declines in passengers through no fault of their own. But when these airlines start flying again, it would be reasonable to require that as they buy new planes in the future, they buy American. They’ll be surviving on taxpayer dollars, and we should be flying on American-built planes.
The same goes for other major U.S. manufacturing. American auto manufacturers have received substantial federal government support during hard times. They should bring supply-chain production back to the U.S. The parts that go into American cars should be made here, not overseas.
And for years, Asian nations have been dumping solar panels to the U.S. at below cost. That should stop. We can and should make solar panels. That means jobs for workers who produce and install them.
Other American energy sectors deserve support, too. The dumping of oil by Saudi Arabian and Russian despots during the pandemic has severely wounded U.S. oil producers. While cheap gas right now may be a welcome boost to our economy, losing our domestic oil and gas production to this unfair foreign oil dumping isn’t in our long-term national interest. A national energy policy that helps stabilize the world oil market and keeps U.S. production alive is.
The next decade will be a challenging time for American companies and workers. We will be emerging from near Depression-era levels of economic carnage and job loss. Bringing jobs home and helping our economy to recover is America’s No. 1 job.
Al D’Amato, a former U.S. senator from New York, is the founder of Park Strategies LLC, a public policy and business development firm. Comments about this column? ADAmato@liherald.com.