Mexican President Claudia Sheinbaum recently announced plans to fortify her country’s trade partnership with the United States by reducing dependence on Chinese imports. As part of this strategy, her administration will introduce tax incentives to encourage nearshoring. The Trump administration should adopt a similar approach to decrease our reliance on China and bolster national security.
After re-entering the Oval Office on Jan. 20, President Trump wasted no time confronting China’s growing – and problematic – influence in the West. In his first inauguration speech, Trump called out China’s expanding presence in the Panama Canal – a critical waterway that facilitates the transportation of billions of dollars worth of international goods.
Trump has also proposed creating an “External Revenue Service” to collect tariffs, duties, and revenue from foreign actors like China. The additional enforcement body would ensure that historically manipulative players are paying their fair share when doing business with Uncle Sam.
It’s a good start, and more can be done to fully realize his policies’ potentials to boost national and economic security.
For example, protecting our supply of microchips and semiconductors from China would be a strategic step forward. That’s because these small but complex components are found in almost every piece of modern technology – from cellphones to automobiles to industrial machinery.
The U.S. currently imports over nine-tenths of its microchips and semiconductors from Taiwan, which is constantly under threat of a blockade or other disruption from communist China. While Congress has passed some federal funding to support microchip production within our borders, levying tariffs on these foreign goods would provide further incentives and unlock additional resources to boost production of these chips domestically.
The chips themselves are extremely important – and so are their building blocks. Rare earth metals, used as components in chips, are another critical resource on which our nation is overly reliant on China, leaving the technology sector vulnerable to a shutdown in the event of a conflict or souring relations.
President Trump should utilize all available resources to increase domestic extraction of rare earth metals, whether by tapping into Alaska’s vast reserves or forging strategic agreements with nearby territories like Greenland that have mountains of minerals.
Another industry that’s vulnerable to an international crisis is our healthcare sector. Why? Because 80 percent of active pharmaceutical ingredients are produced overseas, mainly in China and India. This dynamic – where the U.S. is dependent on critical goods from nations that don’t align with us – is like keeping your fire extinguisher in someone else’s house across town.
President Trump should make it a priority to bring pharmaceutical manufacturing closer to our borders to change this relationship. Fortunately, current territories like Puerto Rico are perfect candidates for the job. The island already has robust infrastructure to buoy pharmaceutical manufacturing closer to home.
To achieve this, the president and his fellow Republican lawmakers in Washington can leverage legislative vehicles to incentivize more manufacturing in and around our home turf. The upcoming debate to extend – and potentially expand – the Tax Cuts and Jobs Act is a prime example. That way, the U.S. would be less prone to supply chain disruptions and more resilient to global conflicts, pandemics, and other unforeseen crises.
The U.S. under President Trump is already positioned to stand up to China’s unrelenting quest for dominance. Continuing to push the envelope will help to seal the deal.
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