Sen. Marco Rubio (R-Fla.) has spoken eloquently in recent years about the need to reorient the United States’ market economy to better support workers and families. His speech on Wednesday crystallizes that belief and persuasively shows how our lust for cheap goods is endangering our national security.
The lecture, of course, is named after the 19th-century statesman who tirelessly pushed for what he called the “American System” in opposition to the laissez faire approach of the ruling Jacksonian Democrats. Clay’s vision of an American industrial power, protected by tariffs and fueled in part by government support for railroads, canals and higher education, became U.S. policy after his death under the aegis of his acolyte Abraham Lincoln and his Republican Party. This vision set up the industrial nation that would eventually go on to win World War II, resulting in a system of global free trade with the United States as the dominant power.
Rubio’s lecture argues that model is now threatened because of the decision to admit Communist China into the World Trade Organization in 2001. That choice allowed a nation committed to neither economic nor personal freedom to amass great wealth at the expense of the United States. He notes that before China’s accession to the WTO, the United States “was the largest trading partner of 152 countries in the world.” Today, he says, China is the largest trading partner for 128 countries while we are the largest for only 57.
The result has been disastrous for the United States. As we now know, huge portions of the United States were de-industrialized, destroying communities and paving the way for the rise of Donald Trump. Rubio notes that “we lost 33 percent of our manufacturing jobs in just the first decade” after China joined the WTO. The financial sector now makes up a larger share of the U.S. economy than manufacturing, and the corporate profits that underlay that sector in large part come from selling to China and outsourcing jobs to countries with cheaper labor and reimporting goods into the United States.
These facts now give China enormous influence in the United States, the exact opposite of what advocates of China’s entry into the global trading market predicted. Instead of Chinese pushing for more freedom at home, we see U.S. companies “self-censor anything that would offend the Communist Party of China” and lobby to lower tariffs on Chinese goods.
Rubio’s assessment of this is harsh: “Our economy is now controlled by people who have more allegiance to the global economic order than to their own nation.” Corporate executives will protest, but how else to view actions such as Apple’s Tim Cook’s secret $275 billion deal with Beijing to spend more on Chinese-produced components in exchange for regulatory reforms that would help Apple’s bottom line? The result of these and hundreds of other corporate decisions is that China can afford to build a massive military and test weapons systems that are more sophisticated than our own. They didn’t get this wealth and technical know-how on their own; Americans and their allies gave it to them and continue to do so.
This searing indictment explains why the United States must disengage its economy from its geopolitical rival as quickly as possible, regardless of the short-term effect on corporate profits. This will be a fierce battle, as shown by the fact that Rubio’s bill banning the import of goods made with Uyghur slave labor remains blocked in Congress. But the battle can be won. A recent Economist/YouGov poll found that 69 percent of Americans believe China is either an enemy or unfriendly to the United States, and a Gallup poll finds 79 percent of Americans view China unfavorably, with 41 percent viewing it very unfavorably. U.S. businesses can’t win with attitudes such as these over time.
The jury is still out, however, on whether jobs will return to the United States, as Rubio contends must happen. U.S. companies can disengage from China but simply relocate to other Asian, low-cost countries such as Bangladesh. That was what the Trans-Pacific Partnership was meant to facilitate, and pro-free trade advocates still argue that the United States should not pay the higher prices — fueled by higher wages — that bringing manufacturing back to the United States would entail. Rubio argues that Americans should put as much emphasis on their identities as workers as they do on being consumers, but such thinking has yet to sink in.
That’s the key battle that conservatives such as Rubio and Cass will be fighting for years. It’s one they deserve to win, because a United States that is viewed simply as a huge shopping mall isn’t the United States at all.