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In this November’s election, China will be front and center for two reasons.
First, in 2016, Trump centered his promise to rebalance trade and rebuild American manufacturing—a promise undelivered, with the tariffs mostly punishing American workers—around China. Second, the national security challenges of China’s preeminence, far from being quarantined in Trump world, are now a concern for most of the world’s democracies.
Trump campaigned against China last time, promising to “decouple” the US economy from the emerging superpower, but the coronavirus reveals just how little he has been able to deliver. Tariffs can be needed safeguards for worker adjustment in some industries, and in response to unfair trade policies of specific countries. But they can’t rebuild America’s industrial capacity. Because the problem is not just direct imports; it is the entanglement of complex global supply chains with Chinese sources.
China is now the focus of the conversation in part because the coronavirus-induced global supply-chain crisis that is just beginning will make even more people think about our extreme dependence on Chinese manufacturing. It’s an issue Democrats haven’t owned, and in some cases have outright dismissed.
It’s time Democrats start paying attention to the gulf between Sanders and Biden (and Trump) on China. Sanders alone has always made building American manufacturing capacity central to his platform: a winning message, and one whose urgency is made all the more clear given the coronavirus.
Joe Biden, on the other hand, is even worse than Trump on China. Biden’s policy is: Why bother to worry? At a campaign rally, Biden dismissed Trump, saying, “China is going to eat our lunch? Come on, man…they can’t even figure out how to deal with the fact that they have this great division between the China Sea and the mountains in the east, I mean in the west…. I mean, you know, they’re not bad folks, folks. But guess what, they’re not, they’re not competition for us.”
As a political matter, this shows a remarkable lack of awareness of how workers across the country feel about China. As a factual matter, this is incorrect. In terms of policy, Biden represents the Clinton approach towards trade—an approach that lost America jobs, lost us leverage over the climate crisis, and lost the Democratic Party huge swaths of rank-and-file labor support.
Sanders’s approach towards China, on the other hand, fits in with the general approach toward labor and trade that he has championed his entire life. He has been unusually strong in his opposition to the way that trade deals have favored the interests of Wall Street and Big Pharma over workers and Main Street. He saw right from the start the risks of opening up imports from China on World Trade Organization terms and voted against changes in US tariffs that would allow that.
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What Sanders alone has been able to articulate is something that most American workers understand, and climate activists get right away: China’s “competitiveness” is driven by burning coal to the point that its emissions cancel out everyone else’s efforts to tackle climate change. The current status quo is not fair; it destroys American productive capacity; and it is definitely not green. Who benefits? Offshoring American companies—often through global corporate structures that avoid paying taxes—have benefited from the opening to China; and so has Wall Street. Deals, deals, deals. They have profited on the backs of American workers, as Sanders has never ceased to point out.
This should not be confused with fortress nationalism. Intoxicated by China’s apparent successes, we have allowed its leaders to define the debate about globalism and nationalism. In fact, regaining innovation-driven manufacturing in America will entail a new globalism, cooperating with partners whether in Europe, or Bangalore, or Guangzho—but driven by a common purpose in greening the economy, not the tax-avoiding exploitative capitalism of offshoring and financialization. This isn’t just about us; it’s about workers and citizens everywhere. If China itself cannot shift to a different model of growth and development, China’s workers along with ours will succumb to the catastrophe of unstoppable climate change
The importance of this approach is becoming even more obvious this week, as we see how the trade policy of the past 30 years has radically weakened our ability to respond to a crisis like coronavirus. When American manufacturing capacity is at an all-time low and there are thousands of essential goods that aren’t manufactured here at all, it makes us vulnerable to huge supply-chain shocks. While Sanders has consistently attacked trade deals that sell workers out and benefit big corporate interests, he, unlike Trump, also sees that protectionism—indiscriminate hikes in tariff barriers—is not the solution. Activist domestic industrial, social, and economic policies are the route to rebuilding America’s resilience as a great manufacturing country, powered by a proud, productive, and decently rewarded, working class—and key to a robust China policy.
When key imports are all sourced internationally, it increases the risk of supply-chain disruptions. If a large percentage of any product, or any ingredient in a product—be that a ball bearing or a chemical or a charger—comes from a region in China that is quarantined, all the products that depend on that ingredient get stuck without replacement. On the other hand, if manufacturing were dispersed throughout both the United States and other countries, we would be ready for crises because we could quickly ramp up production in the American facilities, with governmental support.
Trump’s failures prove the fragility of the current system can’t be fixed by punishing imports at the border. Global supply-chain networks are notoriously complicated; many distributors have no idea about the status of their upstream suppliers—where they are located, how many alternative sources exist, how much product is stockpiled. Only in an emergency is the fragility of the chain revealed.
For instance, when a major earthquake hit Japan in 2011, it took a while before auto factories—who bought their paints from suppliers—realized that the only factory in the world that made a paint pigment required for black paint had been hit by the earthquake. The world was a slightly cheerier place with fewer black cars for a while, but the coronavirus is operating like a rolling earthquake, shutting down operations as quarantines get imposed around the globe, and because downstream suppliers don’t know their upstream sources, we don’t know exactly where all the shortages will pop up, and how severe they will be.
Uncertainty and complexity and lack of transparency in supply chains makes it all the more important to have strong domestic manufacturing capacity—productive capacity—across the board. The coronavirus is not a drill: We need this kind of investment right now. But you can’t get it just by propping up Wall Street.
How would a Sanders presidency address this? Rebuilding our domestic manufacturing capacity in the short term with massive public investment, through sovereign wealth funds or other vehicles, like public/private partnerships. In other words, a New Deal level investment. Even if we didn’t already need a Green New Deal, we would need a New Deal for the coronavirus (or any pandemic). Because of his long track record of championing exactly this kind of approach, Sanders has the unique credibility and conviction to spearhead such a project.
We don’t know where we will be with the coronavirus when a President Sanders would take the helm, but all signs point to a long struggle against this pandemic, and to the certainty that other such shocks are sure to come.
Whether it is Trump on the coronavirus or Biden on China, “Don’t worry” is a fatal strategy in the midst of a crisis. Living in denial, or living in the past, has never served America, and ill-serves the world.
