America’s supply chain crisis is far from over. Persistent backlogs at West Coast ports forced the shippers to change the route of their cargoes to the east. As a result, container ships are now docked in offshore ports, for example New York, Houston and Savannahwaiting in line to unload.
Which at first caused an unfamiliar phenomenon our barren store shelves was COVID-19 and series ill-conceived policy implemented to “stop the spread”. Suddenly, there were too few longshoremen, too few warehouse workers and too few truckers, creating what Laurie Felmer, chairman of the National Transportation League’s Ocean Committee, called a “horror show.”
But the ongoing problems at our ports and on store shelves point to an even more troubling truth: America’s prosperity and well-being have become too dependent on China and the whims of the Chinese Communist Party (CCP).
Not only China supplies a huge amount of our consumer and commercial goods, medical devices, pharmaceuticals and vital raw materials, but it also controls a huge share of the world’s shipping fleet and commercial shipbuilding. Thus, Beijing’s domestic policies have a huge impact on both the global shipping industry and the production and distribution of Chinese exports. This creates a double vulnerability for the United States.
In accordance with UN data for 2021, China owned 7,318 merchant vessels over 1,000 tons — 13.6 percent of the world’s total tonnage. Additionally, 94 percent of all commercial shipbuilding in 2019 was done by just three countries: China, South Korea, and Japan. A war in Asia would jeopardize these sources of commercial shipbuilding, dramatically affecting international markets and the United States.
Similar concerns have recently raised the Congress pass CHIPS Act, a an erroneous attempt stimulate the domestic production of semiconductors. Unfortunately, not all shipbuilding production and resources can be located on shore.
In the 1980s, Congress created the Merchant Shipping and Defense Commission to determine the nation’s maritime transportation needs. His second report to Congress recommended that the nation obtain a fleet of 650 ocean-going cargo ships to meet wartime military and economic needs.
Since then, the American economy increased by 479 percentand his population increased by 133 percent. But today, US-flagged merchant ships are the only ones that can really be counted on in a crisis –the number only 180 ships, of which 157 can be useful for military purposes. This is only a fraction of what was needed decades ago, when the American market was much smaller.
America’s supply chain problems begin on the other side of the Pacific Ocean. It’s not just Washington’s policy on COVID that’s problematic. China’s “zero COVID” policy has locked down twenty-five cities, most recently Shenzhen and Shanghai, a city of forty million people and home to many of the world’s manufacturers.
These lockdowns are spreading across China, causing logistical upheaval at factories up the Yangtze River in Wuhan and at ports such as Tianjin and Shenzhen that transship products through Shanghai. This means that products entering US markets are further delayed.
While the zero level of COVID is being used as a justification for shutting down supply chains, the CCP has shown its willingness to use its industrial power for political purposes as well. The Australians endure a steel embargo for rejecting Beijing’s territorial claims in the South China Sea. Filipinos are being punished by the banana embargo for preventing a Chinese encroachment on Scarborough Shoal. South Korean tourism has been hit by a Chinese travel ban imposed because Seoul is home to a US missile defense system. I Lithuanians are dealing with a full Chinese embargo because they opened a diplomatic mission using the name “Taiwan” instead of “Taipei”.
War in Ukraine elevated supply chain concerns Raw material like phosphates for fertilizers and neon gas, which is crucial in the production of microchips. In the wider competition for access to such resources, China has the ships and economic means to ensure that its needs are met. American consumers do not.
This situation is terrible because for too long agencies like the US Maritime Administrationtasked with ensuring our access to markets, have been silent or failed to take the necessary action.
What needs to be addressed today is China’s use of domestic policies such as the zero-sum fight against COVID-19 that could hold international supply chains hostage. The first step is to increase the resilience of our global supply chains, especially those critical to sustaining a wartime economy.
Part of the solution is to work with shipping partners in friendly countries like Germany (Hapag-Lloyd253 ships), Denmark (AP Moller Maersk730 ships), South Korea (HMM100 ships), Switzerland (MSC, 730 ships), France (CMA-CGM566 ships), and Taiwan (Evergreen line205 ships) — to ensure access to commercial shipping and foreign markets.
We must also consider coercion and intimidation of China Filipino and Indian sailors who make up most of the crews of the commercial vessels that keep the American economy afloat.
Finally, increasing domestic shipping and shipbuilding is key to both America’s national security needs and its economy. The US maritime industry must be able to compete globally. This will require creating a policy environment that facilitates the necessary investment and innovation, while working with allied partners to become less dependent on the Chinese supply chain.
The United States needs a larger commercial fleet to remain globally competitive. The country also needs more shipbuilding and ship repair capacity to provide access to foreign markets and support the nation and navy during war. As evidenced by the empty shelves, what we have now is very inadequate.
This piece originally appeared in the National Interest https://nationalinterest.org/feature/america%E2%80%99s-dependence-china-crisis-making-205132