November 2, 2022 | Barron's

Made in America? Try Made in Democracy.

November 2, 2022 | Barron's

Made in America? Try Made in Democracy.

Excerpt

President Biden is attempting to reassert U.S. global leadership and rally democracies to outcompete China and other authoritarian regimes that threaten a democratic, rules-based global political and economic order. Russia’s deadly assault against Ukraine’s fledgling democracy is helping the cause. The war is giving sometimes squabbling democratic nations’ renewed purpose and rationale for tighter political and economic integration.

However, several provisions of the recently enacted U.S. Inflation Reduction Act are needlessly undermining this resurgent spirit of collaboration and shared stake in countering aggressive authoritarians.

The law includes provisions that require “Made in America” content, promotes domestic manufacturing and places limits on sourcing materials and parts for new electric vehicle, battery and related green technologies. Those policies may stiff some of our closest and most essential democratic allies in Europe, and Asia. Allies whose auto and technology sectors have been essential suppliers and co-producers of products from automobiles to the semiconductors that guide them are essentially being cut off and shut out. We can and should grow our own green economy, but without doing damage to the industries and economies of our allies and partners around the world.

John Austin directs the Michigan Economic Center and is a nonresident senior fellow with the Brookings Institution and the Chicago Council on Global Affairs. Elaine Dezenski is senior director and head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.

Read in Barron's

Issues:

China Russia