Throughout his administration, President Biden has prioritized improving domestic supply chains and preventing supply chain disruptions. But China remains one of the United States’ biggest threats, as the country is both a strategic competitor and the U.S.’s largest trading partner outside of North America. President Biden’s industrial policy has been one of selective decoupling, rather than a complete decoupling of economic ties. This policy, however, does lead to vulnerabilities in both economic and national security, and managing these vulnerabilities is one of the Biden Administration’s biggest challenges when addressing supply chains.
Today, the Progressive Policy Institute’s (PPI) Innovation Frontier Project (IFP) released a new report, “U.S. Supply Chains and Biden’s China Challenge,” which offers a new approach based on a novel metric to respond to the vulnerabilities in the U.S.’s trade relationship with China. Report author Keith Belton introduces a new supply chain measure called revealed comparative dependence (RCD), which can be used to identify goods and industries where the U.S. is excessively dependent on Chinese imports.
“To fully address and strengthen the United States’ supply chains, we must first understand where the biggest gaps are, which is what the revealed comparative dependence (RCD) metric can help measure. The U.S.’s biggest vulnerabilities come when our domestic manufacturing capabilities are lacking and when our foreign dependence is significant, as well as concentrated in one region or country,” said Keith Belton, Senior Director of Policy Analysis with the American Chemistry Council. “Strategically investing in high vulnerability goods will better reduce the U.S.’ dependence on China and strengthen domestic supply chains.”
The report finds that the highest vulnerabilities in the U.S. over the last decade have been driven by a loss in domestic manufacturing, rather than dependence on China.
The report makes the following policy recommendations:
Read and download the report here.
Based in Washington, D.C., and housed in the Progressive Policy Institute, the Innovation Frontier Project explores the role of public policy in science, technology and innovation.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
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Media Contact: Amelia Fox – afox@ppionline.org
