Washington Examiner – by Joel Gehrke
American companies that produce essential goods in China should plan to shift their operations back to the United States or other Western countries, according to a senior Republican lawmaker.
“We’re staring into a significant, significant crisis of supply chain,” Colorado Sen. Cory Gardner told the Washington Examiner. “Cheap labor or cheap manufacturing be damned if you are reliant on them for your life and livelihood.”
Gardner’s warning was spurred by the shortage of hospital masks in the United States, a dearth driven by Beijing’s refusal to allow American companies that make the products in China to ship them out of the country amid the coronavirus pandemic. And he’s not alone in that sentiment, raising the possibility that anger over China’s self-interested response to the coronavirus outbreak could produce one of the most dramatic alterations of global economics in decades.
“Because of the coronavirus problem, people are recognizing that any supply chain that has single points of failure is incredibly vulnerable,” the Heritage Foundation’s Dean Cheng, a senior research fellow in the organization’s Asian Studies Center, told the Washington Examiner. “China is going to be very concerned about decoupling, offshoring, [or any] redirection of investments out of China.”
Chinese officials already have warned against such a shift, in response to White House officials who share Gardner’s views. “Such an attempt is by no means the right prescription amid the pandemic, still less a viable way out for domestic problems the U.S. faces,” Chinese Foreign Ministry spokesman Geng Shuang said last week. “It will only cause greater damage to the innocent American people.”
Some Western allies share that view. “If there is political rhetoric also pushing that trend then there is a danger, a real one, that in the medium to long-term, if this gets promoted, we will be a much less efficient world economy, which means that our own domestic economies would also be much weaker, and GDP will be lower,” European Union Ambassador to the United States Stavros Lambrinidis told reporters last week.
The Colorado Republican dismissed that warning. “If you want to make Matchbox cars in hot wheels around the globe, fine, do it, I don’t think anybody cares where the 1986 Matchbox Maserati is coming from,” he said.
“If you’re making life-sustaining drugs solely reliant on a Chinese supply chain that could be disrupted by a corona-type virus that we have now seen several times this decade, you better think twice,” said Gardner, who chairs the Senate Foreign Relations subcommittee for East Asia. “I don’t think that’s decoupling, I think that’s smart.”
That suspicion of China reflects the degree to which the coronavirus pandemic has exacerbated the tensions between the world’s two largest economies. American officials are angry that Chinese Communist officials censored the early warnings that a new virus had emerged in Wuhan. In response, fuming Chinese diplomats have accused the U.S. Army of starting the pandemic while reminding the West that China controls key parts of the medical supply chain.
“There could be nothing more ham-handed and catastrophic than for the Chinese to talk some more about ‘how the U.S. created coronavirus, and, by the way, maybe we’ll cut off pharmaceuticals,’” Cheng said. “You want to have a situation where there really is that kind of a backlash, where the U.S. actively tries to not only decouple but move specifically away from China? That’s inviting that kind of a backlash.”
Gardner has seen enough. “We have Brazil, we have other countries around the globe where we can establish new supply chains that are much more amenable to the Western values that we share,” he told the Washington Examiner.