The Next Chapter of "Made in America"

Congress in Washington DC
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By Jeffrey “Jeb” Nadaner, Ph.D.

Listen closely and you’ll hear the sound of global supply chains snapping across the Western world. This crisis is affecting a whole range of products from automobiles to natural gas stocks to artificial Christmas trees, resulting in empty shelves, higher prices, and stalled construction and assembly lines. And the crisis will probably get worse before it gets better in the coming months.

The causes today are varied but are rooted in a longstanding and perilous deficiency of the U.S. economy — so many of the products and materials vital to modern American life come from unreliable sources and, in the case of China, foreign countries that are hostile to our interests, well-being, and values.

This problem is especially troubling for high-tech heavy industries like automotive and aerospace manufacturing, as well as industrial production around aluminum, chemicals, concrete, and batteries — all vital to U.S. health, manufacturing, and national security. Heavy industries also emit a disproportionate share of carbon emissions. Together, these urgent national security and environmental challenges present a historic opportunity to attract strategically important manufacturing sectors back to the U.S. and allies.

This is the fundamental insight in the new report Stoking an Industrial Renaissance, Opportunities for U.S. Decision-Makers, issued by SAFE Commanding Heights, a non-partisan organization dedicated to securing the supply chains for America’s transportation, energy, and critical manufacturing needs.

The report highlights several key policy changes that could incentivize high-tech heavy industries to migrate away from countries with calamitous environmental, civil rights, labor, and trade standards. Technologically advanced democracies — led by the U.S. and other countries that can manufacture in a cleaner and more socially responsible way — can level the playing field vis-à-vis China and create a competitive advantage in global markets for high-tech heavy industries.

Goods manufactured here in the United States, according to a key analysis, are already forty percent more carbon-efficient than the world average and three times more carbon efficient than China.[1] This is a powerful comparative advantage for the U.S., and while working with our allies, we can build on it to attract high-tech heavy industries back to our shores. 

Bipartisan majorities in Congress and the President have more policy options than they may realize to kick-start this shift to reshoring cleaner manufacturing. Supply-side levers include capital investment tax credits, R&D subsidies, and incentive payments to expand domestic output — like the one working its way through Congress right now to bolster American semiconductors.

To expand U.S. manufacturing capacity in crucial industries, we can employ 21st-century technologies that allow us to open clean mines, processing facilities, and factories with the highest environmental standards. However, this transformation will require significant new capital that companies can only commit if the U.S. and our allies counter Chinese unfair trade practices and make it economically competitive to produce closer to home.

Demand-side levers are powerful too, in a world where many corporations have made reducing carbon emissions a core value, and more consumers seek responsibly manufactured, clean, American-made goods. Our report envisions a time when producers will disclose vital information about their supply chains, including country of origin, carbon and environmental footprint, and human and labor rights. 

Such transparency is the decent thing to provide American consumers. It is also necessary to turn the tables against China, which has violated these standards for decades to gain unfair economic advantages that are now crippling U.S. and allied industries. 

One more word on transparency: consider the recent oil spill off the coast of Southern California. If this had happened in China or Russia, would anyone have heard about it or tried to clean it up? 

Suppose we don’t make fundamental changes to bring more high-tech heavy industry back to the U.S.? In that case, future global supply crunches will be far more damaging.

But mindsets are already changing across the entire spectrum, from policymakers to producers to consumers. “Buy American” and “Buy clean” are not only emotionally attractive, but they are shifts in attitudes and behaviors that promote U.S. national and economic security. Onshoring would be a boom in higher-wage manufacturing jobs capable of supporting a middle-class living for underemployed and underpaid American workers.

Empty shelves and rising prices need not be the new normal or our national destiny. Instead, with the right mix of policy incentives and far-sighted leadership by the Congress, President, and American entrepreneurs, we can usher in the next chapter of “Made in America” — with our nation’s manufacturing sector once again expanding, developing a low-carbon, job-rich economy, and ending our hazardous dependence on the wiles of China.

This op-ed is written by Jeffrey “Jeb” Nadaner, Executive Vice President, Government & Public Affairs, SAFE and Executive Director of SAFE Commanding Heights.

Jeb has served in key positions in Republican and Democratic administrations, including for several Secretaries of Defense and State, and Attorneys General. As Deputy Assistant Secretary of Defense for Industrial Policy, he played a leading role in Congressional passage of the CHIPS Act. Earlier in his career, he was the Lockheed Martin Vice President of Corporate Engineering & Technology, JINSA Executive Vice President of Government Affairs, Director of the USMC Krulak Center of Innovation, and founder of the successful start-up, Straight Trading. He earned his Ph.D. at Yale University, J.D. at the University of Pennsylvania, and B.A. at Duke University.

[1] Catrina Rorke and Greg Bertelsen, America’s Carbon Advantage, Climate Leadership Council, September 2020, page 1.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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