Americans Must Wake to Chinese Manufacturing Threat
While the coronavirus jeopardizes public health and the broader economy, its impact on geopolitics is not lost on us. After decades of our looking the other way, China is finally drawing the disapproval of most Americans — and for good reason.
First, we learned that China was slow in addressing the coronavirus until it was too late to avoid a pandemic. Now, as we fight to save American lives, we found out that shortages of critical drugs and medical supplies are largely due to outsourcing of production to China. Now, thousands of Americans have joined a class-action lawsuit seeking reparations from the Chinese government for COVID-19 damages.
But, if there is a silver lining, the American people did need a wake-up call. And our newfound distrust of China shouldn’t be limited to the current crisis. In truth, the Communist Party of China (CPC) has been targeting the U.S. industrial base for decades, driven by a succession of five- and 10-year plans, the latest of which is the “Made in China 2025 Key Technology Roadmap.” The most recent plan lays the groundwork for dozens of rebates and subsidies to Chinese companies that export to the United States.
American manufacturers learned this the hard way. We’re a small, Maine-based textile manufacturer, making advanced textiles that we now know were targeted in the “Made in China 2025” plan as “advanced basic material,” a market segment planned for 90 percent domination by 2025. (Textiles used in medical applications are included in this market segment as well.)
Several years ago, we found that our military-grade fire-resistant silica fabrics were being displaced by “dumped” Chinese silica fabrics — through American companies with American trade names — at absurdly low prices. Within three years, we had lost 30 percent of our domestic market.
We decided to stay and fight by filing a petition with the U.S. Commerce Department and International Trade Commission, requesting the imposition of AD/CVD (anti-dumping and countervailing duties) on certain silica fabrics. We provided evidence of massive Chinese subsidies — including raw materials made by state-owned enterprises — throughout the supply chain to U.S. customers, including those in the military-industrial complex.
And we won. Duties of up to 300 percent are now assessed on Chinese silica fabric imports because of our AD/CVD case. In the process, we stemmed the tide and saved 50 of our own jobs, plus the support of three times more U.S. jobs in our supply chain. That may sound insignificant, but such manufacturing jobs offer important benefits like health insurance, 401(k) plans, and vacation time.
Over the past two decades, the U.S. economy has lost more than five million manufacturing jobs, and with them, these benefits. More recently, we learned that 25 percent of America’s workforce does not get paid time off. While shocking, it’s a reminder that the hollowing-out of manufacturing has also hampered Americans’ ability to weather any kind of storm — much less a pandemic.
A China run amok is not only a threat to U.S. manufacturing jobs and benefits, but also more vital American interests. Consider public health: Do we really want Chinese pharmaceutical companies supplying more than 90 percent of U.S. antibiotics, ibuprofen, and vitamin C? Or consider national defense: Do we really want to depend on China for drones, cruise missiles, and satellites?
If unfair trade practices are not curbed, the U.S. military will ultimately be unable to source products from U.S. companies. Our petition not only protected textile workers in Maine, but also retained AMI as a viable supplier to the Navy.
As the coronavirus runs its course, there is no better time to get serious about making things again. Now more than ever, Americans can truly “buy USA” and inspire a resurgence in U.S. manufacturing for decades to come.
If there is a silver lining here, that is it. Let’s get to work.
Kathie Leonard serves as president and CEO of Auburn Manufacturing, Inc. (AMI) in Maine.
