Heading off supply chain problems can start by repatriating jobs at home

Heading off supply chain problems can start by repatriating jobs at home

Cod caught in Norway are packed in ice and flown to China for processing, then are sent back to supermarkets in Scandinavia to be sold — a round trip of 20,000 miles. Alaska salmon caught in the American Northwest are shipped to China for deboning, then are sent back to the U.S. to be placed in fish markets, going 8,000 miles in all. The components of some smartphones travel some 500,000 miles collectively before being assembled and winding up in people’s pockets.

These are just a few examples of a global economy gone mad, where it makes sense from a financial standpoint — but no other — to ship a dizzying array of products over oceans and continents on their way to marketplaces.

Factors for this include availability of cheap labor overseas, fossil-fuel subsidies that keep the lifeblood of global shipping flowing, and global trade agreements allowing transnational corporations to take advantage of tax loopholes and exploit differences between nations in labor and environmental standards.

The result is a system that is highly susceptible to disruptions in the supply chain and can drive up inflation due to limited availability of some products, as we’re seeing currently, and is horrific for the environment.

It also flips logic completely on its head in numerous respects. Among them:

• Some countries import products they simply could have produced themselves. For example, the U.S. imported nearly a half a million tons of potatoes in 2017, while exporting almost exactly the same amount. Same for beef, only more of it.

• As noted above, products are sent thousands of miles away for processing before being returned for sale, a process some call “re-importation.” In the case of those Alaska salmon, The Seattle Times explained that the fish contain 36 pin bones that are best removed by hand — a job that costs 20 cents per pound to have done in China but would cost $1 per pound in the U.S. One company sends 30 million pounds of salmon a year for deboning: the cumulative cost difference for that amount of work in China versus the U.S. would be $24 million.

• The tech publication Wired produced a remarkable story in 2016 in which it traced the shipping involved in assembling an iPhone’s home button and its embedded fingerprint sensor through China, Taiwan, Japan — a distance of some 7,000 miles. And that’s before the product is shipped out for sale.

• Sugar cane growing in Hawaii is processed to a “raw sugar” phase, then shipped to a refining plant near San Francisco, then transported to New York to be packaged in individual paper packets. Those packets are distributed throughout the nation, including in Hawaii. From the canefield to the coffee shop, the sugar will travel about 10,000 miles.

All of this shipping creates a carbon footprint the size of Mount Everest, with greenhouse-gas emissions from international transport increasing more than two times as fast as emissions from other sources. The problem is accelerating partly because of shipping of perishable foods, which often are flown by air. This saves time, but emissions from air travel are more than twice the level of ocean transport.

It’s also precarious, relying on a supply of unrealistically inexpensive oil that the world can’t continue to produce. With a spike in oil prices, the “cheap” products the U.S. is importing from China would become more expensive than producing them on American soil.

In the U.S., the situation cries out for repatriating jobs and industries back to our nation and our hemisphere.

This would protect consumers from disruptions, help address climate change and benefit America’s working and middle classes while also strengthening our neighboring nations.

There also are national and global security implications, as a return of American jobs would juggle the global economy and it would remind China that its current prosperity is the result of being a good global citizen. If it wants to threaten neighbors and trample rights, the future for the Chinese will be a return to isolation and poverty as the world turns its back.

President Joe Biden has taken steps to untangle the current mess in the supply chain, including by facilitating a deal to get the Port of Los Angeles operating on a 24/7 basis, but the broader solution is to create tax breaks for repatriating jobs and industries to the U.S. and lesser-paying jobs to Mexico, Central America and South America. U.S. and European businesses essentially created the boom in China by outsourcing too much economic activity there. It is better to build up our own nation and our hemispheric neighbors.

This would shield U.S. consumers from product shortages and inflation while shoring up the economies of our neighbors in the hemisphere, boosting their ability to trade with the U.S. and buy American-made products. Having prosperous neighbors is inherently good – it also helps solve immigration issues by giving newly prosperous neighbors reasons to stay home. The environmental benefits would be significant as well.

As is, the intercontinental transportation of far too many products flies in the face of reason, and simply can’t last. The sooner the U.S. brings starts bringing jobs in earnest, the better.

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