YEAH, BUT...ASIANS!

The ITC report thus reveals that, far from suffering some sort of major "dependence" crisis that demands an immediate, wide‐​ranging overhaul of the U.S. manufacturing sector and U.S. trade and procurement policies, the United States generally imports essential medical goods from a diverse (and ever‐​changing) group of foreign suppliers, and that--at most--there are only a handful of these products (from China or elsewhere) which are so dominated by a single country that they might require the federal government's attention.

The key word here, of course, is "might" because even products with highly concentrated import shares don't necessarily demand new government action. As I explained recently in National Review, import shares alone (which is all the ITC examined) can't tell us how "dependent" the United States actually is on the foreign source country at issue:

[I]solated import‐​share figures tell us very little about actual "vulnerabilities," because they omit domestic production and local inventories. According to a new study from the St. Louis Federal Reserve, China supplied almost 30 percent of all imported "essential medical equipment" (hand sanitizer, masks, personal protective equipment, ventilators, etc.) in 2018 but accounted for only 9 percent of total domestic consumption because American producers supplied the vast majority (more than 70 percent) of these products....

At the same time, we have massive stockpiles of other critical drugs to prepare for crisis‐​related spikes in demand.

Import share figures might also hide other global producers that have substantial capacity but simply didn't sell to the United States during the period at issue (e.g., due to long‐​term contracts or geographic considerations), and they don't tell us about the availability of similar or alternative products (e.g., a different type of antibiotic) in the marketplace or about key inputs or intermediaries in the manufacturing process. Furthermore, all of these figures will need to be updated to account for massive recent changes in the U.S. and global markets for these goods, as manufacturers around the world expanded capacity or adapted their operations to meet the COVID-19 challenge.

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