“Throughout the 2010s, the “literature of decadence” dominated American political debates. The political and psychological shocks caused by 9/11, the rapid rise of the Chinese economy, the closure of factories in the United States, or their relocation to the Far East, the embarrassing and costly defeats in Iraq and Afghanistan, and the 2007 financial crisis left many Americans convinced that the era of the superpower was coming to an end. They believed that the US was sinking, and that precautions were necessary.
This, in my opinion, is the main reason why marginal leaders like Donald Trump gained popularity and why American society has become more polarized than ever before. By the end of the 2010s, even liberal Democrats acknowledged that something had to be done. In the words of Richard D. Haas, “foreign policy begins at home” and America now needed to address its own internal issues. (1) With its relatively weakening economy, closed factories, falling purchasing power, polarizing society and other problems, America’s interior was in a mess. It was this state of affairs that resulted in Trump becoming President of the United States in 2016. Trump promised to bring manufacturing jobs back to the US in order to make America great again. He envisioned a future where America would once again produce goods, the chimneys of factories would puff smoke, and the unemployed would find work.
Trump spoke in a simple language that resonated with underpaid workers and unemployed Americans: Immigrants were bad, according to Trump, the border should be walled up. Imports were bad, everything had to be produced in-house. Trump accused big companies that moved their factories and businesses to China and third-world countries of treason, and insisted that all the factories that had left should be brought back to America, their homeland. Once in office, President Trump sought to deliver on his promise by imposing tariffs on many imports and engineering tax cuts designed to encourage companies to invest in America rather than overseas. He also began building a controversial wall on the Mexican border. However, Trump’s policies ultimately failed: his manufacturing revival never materialized, and it became clear that his promises were just rhetoric. Despite this, his message of economic nationalism and America first continued to resonate with many of his supporters.
Despite being elected by criticizing Trump, Democrat President Biden has followed similar policies to his predecessor when it comes to manufacturing industry. In recent years, the US has spent trillions of dollars on programs aimed at stimulating and encouraging domestic manufacturing which have had some great success. Biden’s push of the button to kickstart these policies has resulted in over $200 billion projects in manufacturing investments such as Intel Corp.’s $20 billion semiconductor factory in Ohio, Samsung’s $20 billion semiconductor investment in Texas, Rivian Automotive’s $5 billion investment, and Volkswagen’s $2 billion investment. With the manufacturing boom, the US has faced unexpected challenges: One of the biggest problems for American manufacturers is finding suitable real estate for their investments, with some lands lacking railway connections or adequate energy lines to handle such large-scale investments.
Manufacturing or High Tech Information Companies?
Despite already being a dominant force in the high tech information technology industry, with giant companies such as Google, Apple, Microsoft and Facebook etc, the United States is now experiencing a new industrial revolution in classical manufacturing as the first quarter of the 21st century draws to a close. It seems anachronistic and incomprehensible to me that America’s focus has somehow shifted back to manufacturing.
Undoubtedly, America needed to break free from the “psychology of decline” that led to so-called a ‘new industrial revolution’. This renewal is driven by a desire to regain a sense of greatness and reduce dependence on China and other “enemies” the urgency of which is better understood in the covid years. During the pandemic shutdown period, American companies came to the realization that if China were to cut off supplies of certain goods, they would be unable to manufacture and sell those goods. The realization that the American economy is to some extent under Chinese control has created panic among Americans. It is understood that maintaining political independence without economic independence is a difficult feat. For this reason, special attention is paid to the local production of strategic products such as semiconductors, and investments in these areas are particularly encouraged by the Government. The White House has further encouraged allied countries such as Germany and Canada to invest in strategic products and to eliminate Western dependency on China.
Manufacturing Booming May Undermine America’s True Power?
In summary, while the US is experiencing a new industrial revolution in the 21st century, employment seems to have exploded. This is all well and good, but will expanding American manufacturing make America an unrivaled superpower again or is America undermining its newfound power by holding onto the dream of reclaiming its former power? Will it be possible to encircle China as the Soviets were besieged? Is the Cold War experience the right example for the 21st century?
I don’t think so. In my opinion, America is looking for the secrets of leadership in the wrong places. The nature of the global order has completely changed and the new world is no longer a place where only one power can rule alone. It is not possible to contain China like the Soviet Union, because China plays the game by capitalist rules, not ideological. Throwing China out of the system is not an option because it could harm not only China but the whole world.
Moreover, the areas where America holds an edge over other powers lie in the service sector, finance, education, science, and information technology industries. If the US were to neglect these sectors to promote manufacturing, which is not its strongest suit, it would result in a weakening of true American power. The flourishing manufacturing industry has already become a significant cause of high inflation. On the one hand, the Federal Reserve is attempting to curb inflation through interest rate hikes. On the other hand, a 200 billion dollar surge in manufacturing investment is fueling consumption and spending throughout the US. If Washington, DC goes too far in bringing back manufacturing jobs, it could result in persistent inflation and deal a heavy blow to the American banking and finance sector. Moreover, persisting in producing certain products in the US for non-economic reasons could lead to inefficient investments and unnecessary cost increases. In summary, reviving America’s greatness may not lie in the manufacturing sector. While the whole world admires the US and seeks to emulate it, it would be meaningless and perilous for the Americans to attempt to follow in China’s footsteps in areas such as manufacturing. Finally, the world is on the brink of a new era, and it would be incorrect to evaluate this new age using the mindset of the past.
NOTES: (1) Richard N. Haas, Foreign Policy Begins at Home, The Case for Putting America’s House in Order, (New York: Basic Books, 2013).