by Robert Wheeler March 12, 2021
America Could Be Headed for WAR With No Equipment or Supplies
I’ve been writing about the U.S. supply chain for months and pointing out how the American food supply chain has been disrupted by COVID restrictions, natural disasters, and (intentional?) mismanagement.
Eventually, a significant food shortage here inside the country will occur. For those who choose to ignore these warnings and fail to prepare accordingly, times will get very hard very quickly.
But it’s not just the food supply chain we need to be worried about.
In July 2017, President Donald Trump signed an Executive Order concerning the security of U.S. supply chains caused by decades of deindustrialization, Free Trade, and lopsided trade policy. Interestingly enough, President Joe Biden signed a similar Executive Order in February.
It is not just gadgets and consumer products that are the concern here. The U.S. Military’s ability to procure needed supplies to arm and support itself in military conflicts is of great concern.
As Loren Thompson of Forbes points out: “The moment is fast approaching when America’s military will be unable to equip itself for modern warfare without relying on Chinese suppliers. So if the war is with China, there’s a good chance the U.S. military would be defeated.”
America’s deep slide down the industrial rabbit hole
Some Americans, particularly younger ones not acquainted with the terms “Free Trade,” might be aware just how advanced the American industrial collapse has become.
Just take a stroll through Best Buy BBY +0.7% and see if you can find anything made in America. Virtually every electronic device of interest, from smartphones to flat-panel televisions to laptop computers, is now made in Asia—especially China. And less than 2% of the shipping that delivers such devices to U.S. shores is conducted on vessels made in America. China increasingly builds (and owns) the ships.
. . . . .
It is not hard to dream up excuses for why America might be lagging in smartphones or container ships. After all, don’t we design the smartphones here, and don’t we still build the most advanced warships?
But the more you investigate the extent of America’s industrial decline, the easier it is to see is why that slide might be leading to a security crisis.
For instance, the Pentagon’s current list of top-priority technologies for equipping the future force, in descending order of priority, includes (1) microelectronics, (2) 5G communications, (3) hypersonics, (4) biotechnology, (5) artificial intelligence, (6) autonomy and (7) cyber.
The U.S. isn’t a clear-cut global leader in any of these technologies any more. It may have an edge in two or three of them, but its lead is fast evaporating.
There are many reasons why the U.S. isn’t the global leader in technologies anymore
One of those reasons being the Chinese government is working as hard as possible to take advantage of every opportunity. China is also graduating eight times as many students in science and engineering as the United States. I would also add that these students are trained in science and engineering, primarily unencumbered by the constraints of the ideologies of leftist social justice and racial equity.
Despite Trump’s rhetoric on China, the U.S. trade deficit in advanced technology grew every year of his administration. America’s industrial decline is often hidden in the statistics, obscured by the high-tech service industry’s success with leading companies like Amazon and Google.
Biden’s Executive Order shows just how far American manufacturing has fallen
- Semiconductors. Semiconductors are ubiquitous in advanced technology, from smartphones to smart bombs. A generation ago, about a third of global semiconductor production occurred in the U.S. Today. However, the U.S. still accounts for a third of global demand, its share of production has fallen to 12%, and virtually all packaging is concentrated in Asia. U.S. semiconductor companies such as Nvidia NVDA +6.9% and AMD have increasingly outsourced fabrication to Asia. The world’s emerging leader in advanced processors is Taiwan Semiconductor ON +4.7%, which is a key supplier to China and is located on an island claimed by Beijing as part of greater China.
- Batteries. High-capacity batteries used in electric vehicles are another area of supply chain concern identified in the president’s order. The U.S. only accounts for about 12% of global output, while China accounts for 75%. U.S. production will undoubtedly increase in the future, but for now, companies like Ford are dependent on offshore sources. It is instructive that when General Motors GM -0.5% decided to build domestic battery manufacturing capacity, it teamed with South Korean company LGChem—which has much more experience in the manufacture of lithium-ion batteries.
- Pharmaceuticals. The United States is heavily dependent upon imported drugs, particularly generics. And while many U.S. generics are manufactured in India, a close look at how they are made reveals that almost invariably, the chemical precursors originate in China—by far the world’s biggest supplier of such ingredients. However, you have to turn to sources like the Wall Street Journal to find this out because until the coronavirus pandemic came along, the federal government did little to track how reliant the U.S. had become on China’s pharmaceuticals. It is not hard to see how such dependencies could lead to a medical care crisis during a future war.
- Materials. Rare earth elements are heavy metals with vast applications, from computer memories to lasers to aerospace components. The U.S. was the world’s largest producer until the 1990s when predatory pricing by government-backed Chinese sources drove other producers out of the market. Today, the U.S. and other consumers of rare earth elements are heavily dependent on Chinese suppliers. The Financial Times reported on February 16 that Beijing was contemplating a cutoff of rare earth metals to U.S. defense contractors, which would hobble the development of numerous high-tech systems, including missiles and electric combat vehicles.
Biden is right to focus on bringing the manufacturing industry back to the United States
Whether you are a supporter of Biden or an opponent, he’s right to focus on bringing the manufacturing industry back to the United States as an issue of National Security.
It is indeed a national security issue.
This website also discussed that the fact most of our vital medications are manufactured in China is very dangerous to our nation’s well-being.
It’s also an issue of living standards for the American people. Seventy years ago, American’s were the only ones in the history of the world to produce a larger middle class than poor. Americans didn’t accomplish this through Free Trade but tariffs and an “America First” mentality.
If the question is what is to be done to bring American jobs back to America, then the answer is simple – enact protective tariffs across the board and watch those jobs return to American shores.
America is big enough and powerful enough to do this. It did before and can do it again. What remains to be seen is if the current administration desires to bring those jobs back. If it does, will it be allowed to do so? (Click to Source)
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