Opinion | US doesnt need a coronavirus-driven cultural revolution in manufacturing, whatever Trum
The clearer understanding of China’s increasingly autocratic ways did not remove a corporation’s obligation to shareholders. Moreover, the clout of the US Chamber of Commerce, activist investors and, ultimately, the American consumer’s demand for low-cost goods muted the call to reshore production.
Yes, some companies found marginal capacity in Vietnam, Mexico and other jurisdictions, but China remained the mainstay for the vast majority of materials and components of the products that Americans buy.
Lawful pursuit of profit, wherever in the world it is to be found, is a bedrock principle of American industry, and bedrock doesn’t move unless it’s jolted by extreme seismic activity.
The coronavirus pandemic that US health authorities are struggling to bring under control, resulting in economic devastation on a scale that we have yet to understand, is just that earthquake.And the cracks have emerged, caused by news about the lack of personal protective equipment for health care workers battling the first surges of infections in the US, and first-hand accounts of these shortages from those risking their lives because of it.Last week, Larry Kudlow, director of the US’ National Economic Council, said on Fox News that Washington should pay the moving costs of American firms bringing manufacturing back from China.
Kudlow is no ideologue. He’s not as animated as Navarro is by a conviction that doing business with China is a traitor’s game. So, for him to voice such an interventionist position shows that the Trump administration’s push for US companies to shift away from China is likely to translate into some kind of policy action.
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However, we don’t need the kind of cultural revolution in the global manufacturing order that Navarro and many around him have been pushing for.
That’s the last thing Americans will want after enduring the trauma of the Covid-19 pandemic. Knee-capping US companies with supply chains in China would undermine support for the Trump administration because there are too many of them, supporting too many downstream jobs in the US.
Kudlow should spearhead an effort to identify which products and materials are essential for American public health and national defence. Once that’s established, decisions need to be made about what production needs to come back to the US, what can be a joint production effort between Washington and its allies, and what needs to be stockpiled.
Such an effort might be costly and complex, but not as financially draining and difficult as scrambling for solutions when a black swan event shuts down trade.
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This solution should be a public-private partnership meant to bring a new degree of sustainability to industries.
Most importantly, with a clearer delineation of what are key commodities, and measures in place to ensure their availability, business ties between the US and China could proceed without fear that the relationship is undermining American interests.
It might seem hopelessly naive to think that US multinationals and Washington’s China hawks will see eye to eye or that a sensible plan would emerge as politicians on both sides work themselves into a froth of mutual recriminations.
But there’s no getting around the need to find a compromise between business as it has been for the past few decades and a complete removal of China from the supply chain of American industry. Neither is an option.
Robert Delaney is the Post's North America bureau chief
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