Lots of pushback on the Left over this shot from Sen. Tom Cotton, but he’s not the only one talking about consequences for China over the coronavirus pandemic. Fox & Friends’ Steve Doocey asked Cotton this morning about an op-ed he co-wrote at Fox News with Rep. Mike Gallagher about US medical supply lines in China and the need to secure them. Even without the current pandemic as context, that’s a national risk that needs to be resolved by pulling back those supply lines.
In terms of the pandemic, however, Cotton wants “a reckoning” for China’s role in covering up the coronavirus outbreak after we’ve gotten control of it:
— Aaron Rupar (@atrupar) March 25, 2020
When Cotton talks about “reckoning,” he’s talking about an economic reckoning. That involves far more than just the recent pandemic, Cotton makes clear in his op-ed with Gallagher:
We weren’t always dependent on China for medicine, but we are now. For two decades, the CCP has targeted America’s domestic drug manufacturers for destruction, using cartelization, state subsidies and lax safety standards to flood our hospitals and pharmacies with cheap and dangerous Chinese medicine.
This strategy succeeded in shuttering American factories, robbing our workers of good-paying jobs and our patients of high-quality medicine. Just years after the United States granted China special trade privileges in 2000, the last penicillin plant in America closed down. American factories that made aspirin, vitamin C and other essential medicine closed after that, put out of business by China’s predatory pricing.
China has come to dominate the world market for basic drugs as a result. A substantial share of all generic drugs we import comes from China, including a staggering 93 percent of all imported ibuprofen. And focusing on direct trade between China and the United States actually understates our reliance, because most of the active ingredients in drugs imported to us from countries like India also come from Chinese superlabs.
Dependence on our chief communist adversary for essential medicine is an obvious threat to national security. As Rosemary Gibson, author of “China Rx: Exposing the Risks of America’s Dependence on China for Medicine,” said in testimony before the U.S.-China Economic and Security Review Commission last year, if the CCP cut the world off from its pharmaceutical ingredients, “military hospitals and clinics would cease to function within months, if not days.”
Cotton’s hardly the only one in Washington warning about the pharmaceutical supply chain. Marco Rubio introduced a bill in the Senate to disincentivize the use of China as a supplier for medications, a subject about which Rubio had long warned. Afterward, China threatened retaliation for the debate by cutting off those supply lines, a move which did nothing but strengthen the argument for such action.
Today, Mike Pompeo hinted that the administration might act soon to redirect supply lines back to the US, at least in part as a rebuke to Beijing that hits them squarely in their pockets. Pompeo also might have used it as a threat for China over its active “disinformation” campaign over COVID-19:
“This is an ongoing global crisis, and we need to make sure that every country today is being transparent, sharing what’s really going on, so that the global community, the global health care, infectious disease community can begin to work on this in a holistic way.”
Pompeo, a persistent critic of Beijing and the Communist Party, said “very important decisions” would have to be made in future about how the U.S.-China relationship was structured.
He added that supply-chain challenges faced in the United States were due to companies “operating their supply chains out of China but not here in the United States.”
Pompeo did not elaborate, but U.S. administration officials said last week the White House was preparing an executive order to help relocate medical supply chains from China and elsewhere overseas to the United States amid the coronavirus outbreak.
That might have prompted another move by China, although this one appears intended to dial down the hostility. For the first time in almost two years, China has begun buying liquid petroleum gas (LPG) from the US without tariffs. The move was an expected part of the earlier Phase I trade agreement, but recent events had put that in doubt:
China has begun buying U.S. liquefied petroleum gas (LPG) again after a hiatus of nearly 20 months as Beijing waived punitive tariffs to boost imports of U.S. goods as part of the Sino-U.S. Phase 1 trade deal, industry sources said.
Importers have rushed to apply for waivers for the 25% tariff to buy the fuel, a by-product from U.S. shale gas production, after Beijing started granting exemptions this month for nearly 700 U.S. goods.
About a dozen firms – including China Gas Holdings (0384.HK), a piped gas distributor and LPG trader, and Oriental Energy (002221.SZ), a manufacturer using LPG to make petrochemicals – have been granted the tariff waivers, according to two veteran LPG traders, an investment officer and analysts at IHS Markit.
With the exemptions, U.S. LPG is subject only to a 1% import duty, same as rival supplies from the Middle East.
Regardless of whether it’s done for punitive measures or not, the world has to rethink its trade with China anyway. Their lack of controls on food production led to this outbreak, and their dishonesty about it led to its wide distribution into a pandemic. Supply chains that rely on China are simply too high of an economic risk, let alone a national security risk, especially on critical-use items like pharmaceuticals. It might cost more to produce those in the US, but at least we can secure those supply chains in an emergency.