I remember the discussion for many years starting in the late 70s about “offshoring” manufacturing which is “fancy talk” for moving American companies to, well, mostly China.
One of the compelling arguments was that US workers were making too much, were unionized and were “trouble.” A second really huge justification was that Congress and states were putting too many regulations on companies. Those involved environmental requirements, OSHA safety rules, and especially Consumer Products Safety Commission (CPSC) or the CDC’s, National Personal Protective Technology Laboratory (NPPTL) and standards which were “unreasonable” and placed too much of burden on U.S. companies.
Fast forward to 2020.
There are many recalls of hazardous products. Such as, “The Dexter rechargeable battery packs can short circuit, causing them to overheat, posing a burn hazard to consumers,” and burn your house down!
How would you like to have grandma treated by workers a Counterfeit respirator? We just found out that millions of these, made in China, were delivered and may be in use by nurses and doctors. They are a lot cheaper than American made masks.
Did you know that thanks to offshoring,<URL destination="https://www.cnbc.com/2020/03/24/us-drug-shortage-fears-grow-as-india-locks-down-due-to-the-coronavirus.html"> “Indian pharmaceutical companies supply approximately 40-50% of all U.S. generic drugs.”
</URL>Did you know that “China is the world’s largest supplier of active pharmaceutical ingredients.”?
And did you see that CNBC reported, “ … analysts have warned that the COVID-19 pandemic threatens this critical supply chain and could cause significant disruption to the availability of drugs over the next several months.”
Now we are suddenly reaping the real consequences off offshoring and it’s not looking good.
ARTICLE CONTINUES BELOW ADVERTISEMENT
Suddenly Republicans have pivoted on the issue of offshoring. Besides dangerous products we are now concerned about the deep dependence on foreign manufacturing.
Conservative Republican Texas Sen. Ted Cruz recently said, “Our ability as a nation to manufacture defense technologies and support our military is dangerously dependent on our ability to access rare earth elements and critical minerals mined, refined, and manufactured almost exclusively in China. Much like the Chinese Communist Party has threatened to cut off the U.S. from lifesaving medicines made in China, the Chinese Communist Party could also cut off our access to these materials, significantly threatening U.S. national security.”
That is a dramatic reversal from the long-standing bipartisan support for allowing companies to move overseas.
Today one of the most dangerous dependencies is on the preeminence of Chinese information technology especially Huawei, one of the world’s largest makers of smartphones and networking equipment.
COVID-19 has added emphasis to the fact that, “We’ve known for decades the U.S. is dependent on foreign suppliers, but the shortages of PPE, personal protective gear for front line health care workers — has exacerbated the problem and further exposed our dependence,” according to a Denver, Channel 7 report.
I’m suggesting that 2020 marks the high point as well as the end to shipping so much U.S. manufacturing and jobs overseas. Economists and business college gurus, who for decades recommended that America should get out of the manufacturing business and concentrate on the service and “knowledge industry,” have been proved disastrously wrong. When taken to far “Competitive advantage” and cutting labor costs are practically an existential threat to national security, jobs, and economic sustainability.
There will need to be a radical shift to a new paradigm that will refresh the American economy and, while maintaining strong international partnerships and trade shift us away from dangerous dependence to greater self-sufficiency.
Steffen Schmidt is the Lucken Endowed Professor of Political Science at Iowa State University.