Yup, Commerce Was Urging U.S. Firms to Export Ventilators, Masks Etc. to China as Our Imports of Such Goods Were Drying Up
Learn more about this Public Citizen research in the recent Washington Post piece, “U.S. sent millions of face masks to China early this year, ignoring pandemic warning signs.”
The current regime of hyperglobalization is undermining U.S. resilience against the COVID-19 crisis. The U.S. cannot make or get critical goods people need.
Why? In the 25-plus years since the start of the World Trade Organization and North American Free Trade Agreement, more than 60,000 U.S. manufacturing facilities have been lost.
This includes many in the pharmaceutical and medical goods industries. Among the individual companies officially certified by the U.S. government as outsourcing or otherwise killing the largest number of medical goods production jobs to trade are Siemens, Medtronic, Bayer, 3M, Johnson & Johnson, GE Health, Abbott Labs and Boston Scientific.
More than 34,500 jobs in the sector have been certified as lost to trade under just the narrow Trade Adjustment Assistance (TAA) program, which includes only a subset of workers who lose jobs to trade and does not provide a comprehensive list of facilities or jobs that have been offshored or lost to import competition.
The mass outsourcing of U.S. industrial capacity that now leaves us without basic goods needed to combat this pandemic was not an act of God.
Rather, the hundreds of corporate representatives who serve as official U.S. trade advisors helped hatch corporate-rigged U.S. trade policies intended to do just that, while the same interests’ lobbyists rigged tax policy. The result was a slew of trade and tax policies that literally reward relocating production overseas where U.S. corporations could pay workers less and avoid environmental protection costs. (Trump made this exponentially worse with his 2017 ‘tax deform’ that imposed two times the corporate tax rate on firms that produce here versus those that outsourced.)
These U.S. polices have made us much less resilient in facing this crisis.
Having the world’s largest trade deficit year after year means the U.S. is extremely reliant on other countries, especially China, to provide essential goods.
China’s decision to limit exports of personal protective equipment, such as masks, would have caused shortages under any circumstances. But then, as part of the total failure of the Trump administration to plan a response to the COVID-19 threat, as late as March U.S. Department of Commerce officials were urging U.S. firms to expand exports to China of the limited domestic production of key medical goods instead of considering U.S. residents’ needs. According to the Washington Post, “U.S. manufacturers shipped millions of dollars’ worth of face masks and other protective medical equipment to China in January and February with encouragement from the federal government.”
Check out our infographics that show how that worked out… No doubt there is not a mask to be found for love or money.
With many critical goods now mainly made in one or two countries, when workers there fall ill or those governments foreseeably prioritize their own people’s needs before exporting goods, a worldwide shortage of masks, gloves, medicine and more can quickly develop.
And it’s difficult to quickly increase production elsewhere. Long, thin globalized supply chains mean U.S. firms that seek to ramp up production cannot find inputs, parts and components. And monopoly patent protections in many trade agreements expose countries to trade sanctions if they produce medicine, ventilators and more without approval by and payment to pharmaceutical and other firms.
With policymakers and the public distracted, corporate lobbyists are pushing for more of the same trade policies that hatched the unreliable supply chains now failing us all. Instead, we must fundamentally Rethink Trade. The goals should be healthy, resilient communities and economic well-being for more people – not the current priority of maximizing corporate profits.
Public Citizen’s Global Trade Watch released a new series of trade data infographics related to the U.S. response to the COVID-19 crisis. The new data features show:
- From what countries imports into the U.S. of critical COVID-19 response goods are sourced;
- How U.S. exports to Chinaof such goods jumped in the first months of 2020 as the Trump administration failed to prepare for a health crisis at home even as China shut down exports of such products as demand in China grew; and
- How the sources of medical goods imported into the United States have shifted over time.
*DATA NOTES: The U.S. Department of Labor certifies trade-impacted workplaces under its TAA program. This program provides a list of trade-related job losses and job retraining and extended unemployment benefits to workers who lose jobs to trade. The TAA is a narrow program, covering only a subset of workers who lose jobs to trade. It does not provide a comprehensive list of facilities or jobs that have been offshored or lost to import competition. Although the TAA data represent a significant undercount of trade-related job losses, the TAA is the only government program that provides information about job losses officially certified by the U.S. government to be trade-related. Public Citizen provides an easily searchable version of the TAA database. Please review our guide on how to interpret the data here and the technical documentation here.