Doubtless, the world has changed over the last thirty days. As the coronavirus escaped China to cripple countries from South Korea to Italy, people all over the world are often left in the dark as they deal with disruptions to every level of daily life.
Gordon Chang, attorney, columnist, and author, joined The Cats Roundtable to discuss what the virus has done to global markets, where it tells us the future is, and why President Trump is getting it right.
As more and more countries enact quarantines and people hunker down, the coronavirus has triggered a review of globalization. Chang explains this new “deglobalized world” demands a new self-reliance.
“We’ve got to become self-sufficient in items that are critical to the American people,” he explained, reflecting that the coronavirus has exposed “vulnerabilities that are just unacceptable.” These vulnerabilities include products outsourced to countries like China, such as pharmaceuticals and medical protective gear like masks, gowns, and gloves, which have gone in short supply since the coronavirus made a beachhead in the U.S.
Chang believes this reassessment of globalization has a direct correlation to China’s strong arming in international trade. With over 85 percent of American pharmaceuticals having their origin in China, Beijing has threatened to cut off the pharmaceutical pipeline, as well as cut off the supply of medical protective gear. Chang told The Cats Roundtable that “China is not a reliable member of global supply chains.”
He explained that Chinese leader Xi Jinping has been pushing workers to get back to their job sites, with statistics reporting a slowing down of the virus in China even as it gains traction overseas. Chang explained while the situation “probably is improving,” he also believes statistics that support policy should be taken with a grain of salt.
“Whenever statistics support a government policy or plan they are automatically suspicious,” he said, citing China’s efforts to prevent foreign virologists from studying the origins of the outbreak in Wuhan, China.
Chang said it was “a real possibility” that the virus could have been an “accidental release” from the Wuhan Institute of Virology, or from a market in Wuhan, but cautioned “we don’t know very much for sure.”
He railed the recent claims by Beijing that the coronavirus was a bio-weapon who’s spread in Wuhan was orchestrated by the United States, calling the accusations “ludicrous, wild, irresponsible, and dangerous.”
Chang believes the U.S. has to respond to China’s accusations and that response has to reflect President Trump’s arguments for self-sufficiency.
“President Trump’s emphasis on sovereignty is important for us, and we’ve got to understand, like it or not, we’re going to have to defend our sovereignty,” Chang said, adding that the President had been looking at supply chain vulnerabilities “well before anybody thought of COVID-19” because “his instincts were that things should be made in America.”
Chang said it’s likely the Federal Government will either try to persuade companies back to production, or President Trump will use emergency powers that could “make sure we have self-sufficiency.”
He agreed with Trump’s travel restrictions and quarantines first issued at the end of January, and said he was “glad” the President had imposed a travel ban on Europe and the UK, reflecting the President had “bought us some time.”