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America’s Dependence on China Is Untenable

September 12, 2019

Section 301 Tariffs On China, Part 4

 

Editor’s note: Part Four of a series on the Section 301 tariffs on Chinese products by CPA Buy American Committee co-chair James Stuber.

Read part three here

[James Stuber | August 28, 2019 | The American Dossier | Part four of a four-part series]

In the previous post in this series I described the hidden cost Americans pay in the form of defense spending to match the military buildup China is financing with dollars we send them for “low” priced goods.

There is another unacknowledged cost of the current U.S.-China trade relationship – American dependence on China for items essential to our national security, including materials, equipment, and medicines essential for both military and civilian purposes.

In October of 2018, the U.S. Department of Defense issued its alarming assessment of the U.S. Manufacturing and Defense Industrial Base. Citing “fragile suppliers near bankruptcy and entire industries near domestic extinction,” the report singled out China’s use of “legal and illicit means . . . to acquire . . . critical technologies,” and said China’s “actions seriously threaten other capabilities, including machine tools; the production and processing of advanced materials like biomaterials, ceramics and composites; and the production of printed circuit boards and semiconductors."

Tariffs can help reverse these trends by incentivizing the reshoring of production to the U.S. -- the Reshoring Initiative reports that in 2018, a record 1,389 companies brought production back to the U.S., creating 145,000 jobs [www.reshorenow.org]. And a study by economists at the Coalition for a Prosperous America concluded that an across-the-board 25 percent tariff on Chinese goods would create one million jobs over five years. [www.prosperousamerica.org/research].

America’s dependence on China for critical materials and medicines is untenable; tariffs can be an important tool in restoring an independent American industrial base, creating millions of jobs in the process.

Jim Stuber is the founder of a non-profit organization called "Made in America Again" ("MIAA"). MIAA's mission is to create awareness and build healthy American communities by encouraging consumers to buy things made in those communities.

His goal is for MIAA is to generate $500 billion in consumer spending, enough to balance trade, create six million jobs, take the slack out of the economy and get a virtuous circle going again.

Jim has kindly agreed to share his insights with The American Dossier from time to time.

For more information please visit: www.madeinamericaagain.org

Read the original article here.

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  • John R Hansen
    Jim,

    An excellent series. Very informative, and a real call to action. Many thanks.

    This said, I found it strange that, in this concluding note of the series, you did not mention the massive role that the overvalued US dollar has played in creating the current situation where the artificially low cost of producing in China made it so attractive to US industries that they have been willing to surrender their intellectual property in exchange for the right to produce there. The overvalued dollar has also made the Chinese exports artificially cheap, leading American consumers — including the US military — to purchase goods from China despite the many risks to America’s economy and national security.

    You mentioned CPA research reporting that a 25 percent tariff on all goods from China would create one million jobs in five years, but you said nothing about the CPA research which demonstrated that the US could generate over six million jobs — and close the overall US trade deficit — by implementing the Market Access Charge — the MAC. (https://www.prosperousamerica.org/press_release_new_cpa_study_shows_competitive_us_dollar_could_produce_over_6_million_new_jobs?utm_campaign=190214_pr&utm_medium=email&utm_source=prosperousamerica).

    The MAC, which will be implemented when the Baldwin-Hawley Bill is passed, would move the dollar from its current overvaluation of 25-30 percent to a trade-balancing exchange rate that would make it possible for Americans to earn as much producing exports as they spend on imports. This, not a trade war with China, is the best way for America to restore is international competitiveness, independence, and greatness.

    Best,
    John Hansen
  • John R Hansen