Biden Measures No Quick Fix for US Supply Chain Weakened by Years of Offshoring - Experts
WASHINGTON (Sputnik) - New measures unveiled by the Biden administration are unlikely to alleviate supply chain bottlenecks in a timely manner because of the damage inflicted by years of economic offshoring and privatization, experts told Sputnik.
Earlier this week, in response to the global supply chain crisis, US President Joe Biden announced that two of the nation's busiest ports - Los Angeles and Long Beach - would operate 24/7 to alleviate bottlenecks. The burgeoning crisis has led to images of more than 70 cargo ships anchored offshore the two ports, through which 40% of US imports flow.
In addition, Biden said Walmart, FedEx, UPS, Samsung, Home Depot and Target and other major shippers and retailers over the next several weeks will ramp up operations to move cargo out of the ports and make more space on the docks.
"The supply chain crisis is caused by offshoring the economy and privatizing all aspects of the economy. This is another result of shipping productive segments of the economy overseas, to places like China, Indonesia and Mexico," economist analyst and author Jon Jeter told Sputnik.
The international crisis has also fueled sharp increases in the prices of fuel, food, consumer goods, commodities, and steel, among other products.
On Wednesday, US Transportation Secretary Pete Buttigieg said Biden's infrastructure proposals that Congress is working through could also help alleviate global supply chains that have slowed economic recovery worldwide.
Economic Policy Institute (EPI) Senior Economist Rob Scott warned, however, that recent infrastructure plans and legislation passed in January will not serve as timely remedies amid an import surge.
"We can expect money to be spent on steel, concrete, machinery, electronics but a substantial share of that will be produced abroad," Scott told Sputnik. "Essentially, it will create jobs overseas."
Scott said the US is facing shortages of railyards, lines, crews and trucks "while we have all this spending going on," amid a drastic surge in imports, which rose 23% in 2020. Overall, he said US imports are up 9.6% since 2019 even though the economy has only grown by 1%.
Scott said the growing demand for goods and products will not subside anytime soon, which presents a problem because the US does not have the infrastructure or the capacity to move those goods around.
"The hidden underbelly is the fact that [former US President Donald] Trump completely failed to address the massive surge of the importation of goods," Scott said. "There was a considerable acceleration during his entire term and it’s still growing. It really surged after August."
Scott said a primary solution is to make the US more competitive by bringing down the value of the dollar, which is too expensive and makes imports too cheap.
In addition, he said there are other policies such as investing in research and development and training, as well as attacking unfair trade practices and the US government buying American products which all would put a significant dent into America’s voracious demand for foreign goods.
The supply chain crisis, Scott added, has also been exacerbated by COVID-19, which triggered an economic meltdown in the United States beginning in the early months of 2020 and led to massive job losses.