Alliance for American Manufacturing
10/24/2024 | News release | Distributed by Public on 10/24/2024 15:07
National Security Advisor Jake Sullivan Says U.S. “Can Compete and Win”; Says Tariffs Needed to “Prevent a Second China Shock”
National Security Advisor Jake Sullivan speaks at the White House on October 01, 2024. Photo by Kent Nishimura/Getty Images
In a speech given before the Brookings Institution, Sullivan said President Biden's pursuit of industrial policy and worker-centered trade is intended "not only preserve America's enduring strengths, but extend them for generations to come."
The Biden administration has "implemented a modern industrial strategy" that will allow the United States to return "to a tradition that made American international leadership such a durable force," National Security Advisor Jake Sullivan said in a speech at the Brookings Institution this week.
But Sullivan also cautioned that the United States must "sustain the political will here at home" to make investments in critical industries, allocate resources in areas needed globally and "ensure that we have the resources and the capabilities in the U.S. government to implement this economic vision over the long haul."
Sullivan's speech served as a closing argument of sorts for the industrial and trade policy put in place under President Biden, which included strategic investments like those in the CHIPS and Science Act and worker-centered trade action, such as maintaining or raising tariffs on Chinese imports. These efforts, Sullivan argued, are helping to lift up workers while addressing challenges like fragilities in global supply chains and the climate crisis.
Yet Biden's strategy also marked a major shift in U.S. trade policy, which for decades had favored unfettered trade and "just in time" supply chains that favored corporate financial gains over American workers, leading to millions of lost factory jobs and devastating industrial communities.
Biden's shift in the status quo has proven difficult for some defenders of free trade to accept, but it's a necessary one, allowing the U.S. to return "to a tradition that made American international leadership such a durable force, what Alexis de Tocqueville called 'interest rightly understood,'" Sullivan said.
"The world of the 1990s is over, and it's not coming back, and it's not a coherent plan or critique just to wish it so," Sullivan said.
"We need to articulate, once again, de Tocqueville's notion of interest rightly understood," Sullivan said. "To us, that means pursuing a strategy that is fundamentally positive-sum, calibrated to the geopolitical realities of today and rooted in what is good for America - for American workers, American communities, American businesses, and American national security and economic strength."
The strategy deployed by Biden does not mean shutting down trade, Sullivan said. Rather, the goal is for the United States to join with its strategic allies to implement a new trade system that is "enhanced and enabled by bold public investment in key sectors; bounded in rare but essential cases by principled controls on key national security technologies; protected against harmful non-market practices, labor and environment abuses, and economic coercion; and critically coordinated with a broad range of partners."
Taking on the unfair practices of China's government is a key part of this strategy, Sullivan said. For example, China currently dominates the critical mineral market, which has led to "extreme price volatility, widespread corruption, weak labor and environmental protections." If the United States and its allies do not invest to build our own supply of these minerals, we will find ourselves "increasingly dependent on a country that has demonstrated its willingness to weaponize such dependencies," Sullivan argued.
Climate is another example. "American manufacturers are global leaders in clean steel production, yet they've had to compete against companies that produce steel more cheaply but with higher emissions intensity," Sullivan said.
Sullivan also defended the Biden administration's decision to maintain and, in some sectors, increase "Section 301" tariffs on Chinese imports, arguing that doing so was needed to "prevent a second China shock."
"Now, we know that indiscriminate, broad-based tariffs will harm workers, consumers, and businesses, both in the United States and our partners. The evidence on that is clear," Sullivan said. "That's why we chose, instead, to target tariffs at unfair practices in strategic sectors where we and our allies are investing hundreds of billions of dollars to rebuild our manufacturing and our resilience. And crucially, we're seeing partners in both advanced and emerging economies reach similar conclusions regarding overcapacity and take similar steps to ward off damage to their own industries."
Along with trade, investments in critical sectors, like those in the CHIPS Act and Inflation Reduction Act, are needed to ensure the United States can compete and win in the 21st century, Sullivan said.
"The truth is that smart, targeted government investment has always been a crucial part of the American formula. It's essential to catalyzing private investment and growth in sectors where market failures or other barriers would lead to under-investment," he said.
"Somehow, we forgot that along the way, or at least we stopped talking about it. But there was no plausible version of answers on decarbonization or supply chain resilience without recovering this tradition. And so we have."