by Curtis Ellis
The Chinese Communist Party (CCP) has forgotten nothing and learned nothing.
The threats leveled at the NBA repulsed all Americans. Perhaps the Chinese Communist bosses expected all of us to respond like Lebron James, who criticized Houston Rockets general manager Daryl Morey for supporting pro-democracy protesters in Hong Kong. But the American people don’t respond well to threats and don’t like to be pushed around.
The CCP tried, but it couldn’t split American farmers from President Trump.
Its apologists whined, “tariffs mean consumers will pay more.” It wasn’t true and that dog didn’t hunt anyway. Lord North discovered that three centuries ago, when he predicted American colonists would prefer to buy lower-priced leaf from the British East India Company. Americans understand the connection between production and consumption. They will pay more on the consumption end in order to earn more on the production end.
The chutzpah of the Chinese Communists and the cowardice of multi-millionaire athletes (and so many U.S. companies that put profit before principle) has awakened a sleeping giant.
It is clear the history of China’s Communist Party is one of repeated injuries and usurpations, all having in direct object the establishment of an absolute tyranny over the people of the United States as well as over the people of China.
A growing majority of Americans feel it has become necessary for our people to dissolve the economic bands which have connected us with Communist China.
There are three things we should do so the process happens organically and we suffer as little harm as possible: Incentivize, Identify, and Unify.
Incentivize
First, we need to give the business community incentives to move their supply chains out of China.
Making the tariffs now in place permanent would give business the certainty it needs to invest in new plants. Permanently lifting tariffs on China in 2001 gave business the long-term certainty to invest over there. Let’s do it again, in the other direction, for America.
Accelerated write-offs for new plants and equipment could also encourage capital-intensive industries to rebuild their supply chains inside our borders.
It’s not impossible—Japan and Germany are high-wage countries and have globally competitive industries. America has an added advantage: plentiful, low-cost energy.
Some new plants, in the garment sector, for example, might locate in lower-wage Central American countries. That would still be a boon to Americans.
Growers across the Cotton Belt and textile mills in the Carolinas would supply cut-and-sew shops in Honduras and El Salvador. Plus we’d have the added benefit that those garment workers would not be likely to be bum-rushing our border.
Honest and consistent accounting rules for Chinese and U.S. companies would be another incentive.
Chinese companies listed on American stock exchanges aren’t transparent. They need to open their books to U.S. regulators (they don’t) just as American companies are required to do if they want to be listed. Americans are often unknowingly investing in Bernie Madoff with Chinese characteristics.
The EQUITABLE Act sponsored by Senator Marco Rubio (R-Fla.) would require China-based companies listed on U.S. stock exchanges to comply with American laws and regulations for financial transparency and accountability—or be delisted.
In addition, U.S. companies need to be transparent about their own investments in China. The fact is they cannot get cash out of China. Those assets are illiquid and should be counted as such—Level 3 assets in accounting parlance. This would directly affect executive compensation and as such would be a strong incentive for C-suites to invest somewhere other than the People’s Republic.
An honest assessment of the situation would require some companies to write off their investments in China as a total loss.
Identify
Second, we need to identify potential shortfalls as we rebuild domestic supply chains. Experts in defense, health care, telecommunications, and other industries need to be recruited to catalog what we know we make in America, what we can source from allies, and what we’ve become dependent upon from China as our sole or major supplier.
Incredibly, we have been sourcing specialty parts for our latest generation of jet fighters from China. That is also the case with ingredients in the medicines millions of Americans use daily.
We also need to identify our skills deficit. Learning-by-doing is the font of practical know-how. Decades of outsourcing have left too many Americans doing nothing and therefore learning nothing.
The late Steve Jobs told Walter Isaacson we aren’t graduating enough basic industrial line engineers (as opposed to advanced research engineers) to run a large-scale electronics assembly plants in this country.
Dressmakers say they couldn’t produce bridal gowns or prom dresses in the U.S. even if they wanted to because they couldn’t find anyone to sew them.
Tax incentives would encourage training and apprenticeship programs to rebuild the skilled workforce.
So would a merit-based immigration system. I don’t mean a guest worker program to fill jobs Americans can do. Rather, a concerted effort prioritizing those with the skills currently in short supply in our country. In the earliest days of the Republic, Britain had a global monopoly on the textile industry. We offered a bounty to attract immigrants who understood textile manufacturing technology so we could jump-start a domestic industry. That’s how Cranston Mills was founded in Rhode Island. It’s still in existence today.
Unify
Finally, and most importantly, we must unify.
The Chinese Communist Party and its agents will try to sow political division. We must stand together as one country, Democrats and Republicans, liberals and conservatives, left and right, against the common enemy.
We will help those at risk of being hurt the most. We don’t want anyone to bear a disproportionate burden.
That’s what we’ve done with the farmers. They understand it will take time and are willing to suffer short-term pain for long-term gain. Their lesson we must keep in mind.
We are embarking on a journey to rebuild our country and provide opportunities for our people. Our cities, towns, and rural communities will have prosperity instead of poverty, drugs, and despair.
With work comes the ability to provide for oneself and one’s family. That is a solid foundation for liberty, independence, free people, and a free nation.
Those who say business can’t move supply chains are wrong—they moved them to China a few years ago. They can move them again and, this time, put America first.
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Curtis Ellis is policy director with America First Policies. He was also a senior policy advisor with the Donald J. Trump presidential campaign in 2016.
