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 future economic and national security. And now, 20 years later, the United States has lost almost 90,000 factories, nearly 5 million manufacturing jobs, and a wide array of essential supply chains.
This industrial loss has largely been China’s gain. In 2000, for example, the U.S. enjoyed a $5 billion annual trade surplus in advanced technology products. By 2019, however, that had shifted to a $133 billion annual deficit. Pharmaceutical production has been eviscerated, too – 90% 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 deemed 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. China also employs forced labor, including more than 1 million ethnic Uighurs and other minority groups driven into a vast network of “indoctrination” camps.
It’s impossible to excuse these wanton practices, and even free-trade advocates are waking up to China’s ugly behavior. Such lawlessness 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 global 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 a key part 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 them 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 like the Bayan-Obo, a Chinese rare earths site that has dumped toxic sludge into a waste pond three times the size of Central Park.
Despite possessing an estimated $6.2 trillion in mineral reserves, the U.S. still imports nearly $7 billion worth of metals and minerals each year. This is especially relevant for rare earth metals like neodymium, dysprosium, and lanthanum that are used to manufacture electric vehicles, wind turbines, and smart-phones. In fact, China supplies roughly 80% of the rare earths imported by the United States.
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 — like 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 CEO of the Coalition for a Prosperous America.