China’s assault on our economy is being funded by the US taxpayer
by Rep. Brad Wenstrup
09 May 2023
The United States is in a Cold War with China. Yet the U.S. government continues to handicap American industry while our adversary is laughing at us and enriching itself at our expense.
Beijing’s provocations go far beyond its use of a spy balloon to traverse sensitive military sites across the U.S., or its military provocations, including China’s decision to send a record number of military aircraft, along with naval ships and an aircraft carrier, to threaten Taiwan this week in retaliation for Taiwanese President Tsai Ing-wen’s visit to the U.S. to meet with House Speaker Kevin McCarthy (R-CA).
For decades, China has stolen intellectual property and used predatory trade practices and market manipulation to knock out U.S. competition. The Chinese Communist Party is engaged in a complex economic Cold War and intends to play the long game and attempt to replace the U.S. as world leader.
China has also found ways for its companies to siphon American tax incentives and use them to ensure that the U.S. continues to rely on China for materials critical to health and national security needs. Of great concern, about three-quarters of rare earth minerals, a key component in electric vehicle motors, batteries, cellphones, headphones, magnets, missiles, fighter jets, night-vision goggles, and more, are now sourced from China. China also controls a large share of the world’s mineral refining capacity. China’s monopoly allows it to drive up the costs for rare earth minerals, in turn tightening supply and squeezing manufacturers.
In addition, millions of doctors and patients in the U.S. rely on active pharmaceutical ingredients produced in China as the source materials for medications they need. Many name-brand and generic medications that Americans rely on every day, from antibiotics to blood pressure medicines, cancer drugs, and blood thinners, are being manufactured in China or produced with materials that come from China. It is estimated that if China stopped producing these medications, the U.S. would have just two months until we run out of the drugs patients rely on, according to Rosemary Gibson, the author of China Rx.
Despite their name, rare earth minerals aren’t actually that rare, and the U.S. was once a global leader in their production, mining and producing its own supply until the 1990s. Due to its vast source of cheap labor and market manipulation, China was able to dominate the rare earth minerals market, increasing production by 450% from 1990 to 2000. Meanwhile, production in other countries decreased by 60%, reported PBS. China now produces at least 70% of the global mined production of rare earth metals.
China’s actions have made mining, processing, and producing rare earth minerals unaffordable in the U.S. We lack the capability to process rare earth minerals, and our largest source, a mine in Southern California’s Mountain Pass, closed in 2002 only to reopen in 2012 after China cut off rare earth exports to Japan and threatened to do the same to the U.S., highlighting the danger of our dependence. But get this: The Mountain Pass, America’s one operational rare earth minerals mine, is now nearly a tenth-owned by a Chinese investor.
We can’t afford to let the CCP, which has authority over everything Chinese nationals and their businesses do in the U.S., continue to undermine industry after industry in the country. We need decisive action from the federal government. Yet despite the Biden administration saying it recognizes China as a threat, there appears to be little effort on President Joe Biden’s part to stop Beijing from eating our lunch.
Biden’s green energy policies enable China, the very country the Pentagon named as the greatest threat, to continue its rise to global hegemony. Currently, 77% of the world’s cell manufacturing for electric vehicle batteries takes place in China, so Biden’s goal for half of the cars sold in the U.S. to move to zero emissions by 2030 only further empowers China.
Worse yet, Chinese companies are taking advantage of U.S. green energy tax incentives to build facilities and projects here in the U.S. that will harm the ability to build independence from China. Increasingly green energy projects are being developed with the involvement of Chinese companies, former U.S. Ambassadors Peter Hoekstra and Joseph Cella told Fox News. Projects like this exist even in my home state of Ohio. They are everywhere.
For too long, U.S. policy has failed to recognize the economic threat China poses to domestic industries or how its domination of particular markets creates a national security challenge. We cannot afford to continue this blindness. We are at a point where we cannot even produce the rare earth minerals we need for the military or the pharmaceutical ingredients we need for medicines.
To help address this crisis, I introduced the American Made Medicine Act last Congress. This bill would help secure critical national health supply chains and create manufacturing jobs in the U.S. by offering tax credits for investments in medical manufacturing in the U.S. Healthcare professionals need a reliable source for personal protective equipment and pharmaceuticals — not one that can be cut off by, or tainted by, an enemy at any moment.
Congress and the White House must work together to help create and solidify a resilient domestic supply chain so that we have reliable sources for critical health and national security needs.
The U.S. must also be clear in its objectives and address China’s malign activities with a plan of its own to restore U.S. independence and unshackle our economy. The enemy is at the gates — building factories in U.S. towns, buying farms near military installations, and flying over sensitive military sites. It’s high past time that we recognize the Chinese colonization of the U.S. and act accordingly.