McCarthy: Break China's Supply Monopoly by Rebuilding Manufacturing

House Republican Leader Kevin McCarthy (R-CA) wrote on an oped on Sunday, explaining why America should break the Chinese medical supply monopoly and rebuild America’s supply chain.

McCarthy cautioned that while congressional leaders are currently devising ways to limit the economic effects of the coronavirus outbreak, they will have to develop a plan to rebuild American manufacturing.

“Congress is currently focusing its efforts on immediate relief for American families and businesses. But we will soon need to act on a plan to break China’s medical supply chain monopoly,” McCarthy wrote.

The House GOP leader noted that Chinese pharmaceutical companies control more than 90 percent of American antibiotics, ibuprofen, and hydrocortisone; 70 percent of acetaminophen, and roughly 45 percent of the blood thinner herapin.

“This is not just an economic concern,” he said. “The COVID-19 episode reinforces that it is also a public health concern.”

McCarthy proposed a wide-ranging solution to bring back American manufacturing, which includes tax incentives, financing, and eliminating government red tape. He added:

For our efforts, we should expand expensing to cover more types of investment for all industries domestically — including pharmaceutical manufacturing, along with tax incentives for companies interested in manufacturing biopharmaceutical products in the U.S. so they can do so.

The California conservative continued:

While mature firms are essential to ramping up manufacturing, it is undoubtedly true that new, innovative companies will be on the cutting edge of responding to this crisis and the next. That means we need to protect and build on the greatest American financial asset: our capital formation system. We must ensure that we maintain a dynamic market system that allows capital to be raised, allocated, and deployed quickly and cheaply. We can do so by increasing the flexibility for crowdfunding and micro-offerings and regulatory simplification for bank lending.

Once committed to coming back, the government needs to implement a bold deregulatory agenda that makes it faster and cheaper to build manufacturing plants.

He noted, “Currently, it takes five to seven years to build a plant. That’s not even close to acceptable. Our national goal should be to bring that to less than 18 months by streamlining permitting and cutting red tape.”

Other lawmakers, such as Sen. Josh Hawley (R-MO), have issued proposals that would bring back American manufacturing.

McCarthy said that congressional Republicans will soon release legislation that will bring back manufacturing.

“As a member of Congress, I am especially sensitive to the cracks this crisis, as most crises do, have revealed in our readiness and response,” McCarthy said. “In the weeks ahead, there will be several legislative proposals aimed at filling the gaps, and I speak for many in the United States Congress when I say that we will never again leave our nation’s medical fate in the hands of another.”