To say that China has been an unfair trade partner over the past few decades is more than an understatement. In addition to pilfering a large portion of American manufacturing, agriculture, and services, U.S. companies are continually victimized by still unchecked intellectual property theft and state-sponsored hacking activities by a supposed "ally."
Despite President Trump’s highly publicized trade negotiations with China — which lead to the Phase One trade deal --- the reportedly Chinese-born coronavirus pandemic has thrown a proverbial monkey wrench into many of the anticipated American economic victories.
Among the Chinese deficiencies is the agreed upon purchase of an additional $200 billion of U.S. goods in 2020 and 2021. At the midway point of 2020, China was far behind on those commitments, according to the Peterson Institute for International Economics (PIIE). PIIE’s report showed that China had imported just $40.2 billion of American goods, far less than half of what it had agreed to back in January.
Additionally, China is way behind on its promise to increase imported American energy products. Through the end of June, China had only imported a mere 5% of the $25.3 billion worth of energy products it is required to purchase from America in 2020.
Despite these inequities, the Chinese have remained unapologetic.
In addition to attempting to cast blame on the United States for the outbreak of COVID-19, China also blocked U.S. manufacturers operating in the country — including 3M and Honeywell — from exporting N95 respirators, gloves and other personal protective equipment (PPE).
More recently, the 5G and overall technology race has seen the Trump administration place Chinese telecom giant Huawei — along with several other Chinese companies — on the so-called "entity list."
Companies on this list are disallowed from doing business with any organization that operates in the United States. Recently, United States Secretary of State Mike Pompeo also warned countries globally of the dangers of doing business with Chinese companies like Huawei.
As a result of these actions by the U.S. and in retaliation, China has now threatened to potentially restrict access to up to 90% of the raw materials needed by American pharmaceutical companies to produce vitamins and antibiotics.
This cavalier attitude that China continuously displays is in part due to the advantageous global positioning the country enjoys with regards to its broad manufacturing base of necessary worldwide exports.
Among these key exports, are the aforementioned vitally important medicines that countries including the United States depend on to combat diseases and sicknesses.
This is why the news of President Trump invoking the Defense Production Act (DPA) to help onshore pharmaceutical and medical supply chains back to the United States was generally received positively outside of China.
As part of this invocation, Eastman Kodak Co., which among other things produces Key Starting Materials — the building blocks to make Active Pharmaceutical Ingredients (API) — will be entering the drug production business via a $765 million government loan.
Under the deal, Kodak's primary role will be to produce so-called "starter materials" and ingredients used to make generic drugs.
These are the very materials that China has directly threatened to restrict exports of to the United States as a result of the current technology war.
The news of the loan has not come without controversy, however. On Aug. 4, 2020 Sen. Elizabeth Warren, D-Mass., sent a letter to the Securities and Exchange Commission requesting an examination of stock trading activity prior to Kodak’s July 28 announcement which saw volume in the company’s shares surge and stock prices rise about 20%.
Sen. Warren’s argument is that rise in the stock price on July 27 may have been preceded by press releases about the government loan via Twitter. She believes this constitutes a violation of what’s known as Regulation Full Disclosure rules that require publicly traded companies to release material information to all investors at the same time and may be cause to revoke the loan.
Eastman Kodak announced in early August its intent to appoint a special committee to conduct an internal review of the company's federal partnership agreement and get to the bottom of any potential wrongdoing.
The committee, which is comprised of independent directors, has been appointed to oversee what Kodak calls "recent activity by the Company and related parties in connection with the announcement of a potential loan by the U.S. International Development Finance Corporation."
Regardless of the outcome of any investigation, the fact is that China has acted at best irresponsibly, and perhaps at worst criminally, in the spread of COVID-19 and the subsequent disturbances in the PPE supply chain.
China is also, unfortunately, still the major supplier of the materials needed to combat the coronavirus in America. Our government must therefore make all reasonable attempts to stay the course on a project that could onshore as much as 25% of the APIs needed for generic drugs in the U.S. and serve as a model for similar efforts in the future.
Julio Rivera is a small business consultant, political activist, writer and Editorial Director for Reactionary Times. He has been a regular contributor to Newsmax TV and columnist for Newsmax.com since 2016. His writing, which is concentrated on politics, cybersecurity and sports, has also been published by websites including The Hill, The Washington Times, LifeZette, The Washington Examiner, American Thinker, The Toronto Sun and PJ Media and many others. Read Julio Rivera's Reports — More Here.
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