Moving manufacturing back to the United States in a “zero-sum” manner is practically impossible for the country and will harm itself in the long term, an Iranian researcher has said.
Protectionist and unilateral approaches and pursuing a “zero-sum economics” policy will work to the detriment of the United States in the long run, Rahim Teymoori, a developmental studies researcher at the Development and Foresight Research Center of the Plan and Budget Organization of Iran, said in a recent interview with Xinhua.
In an article titled “America’s Zero-Sum Economics Doesn’t Add Up” published recently by the Foreign Policy, Adam Posen, president of the Peterson Institute for International Economics, said the implementation of this U.S. trade and industrial policy, which began with the administration of former U.S. President Donald Trump and is accelerating under his successor Joe Biden, disregards other countries in a “zero-sum way” and “explicitly” targets China.
Raising doubts about the U.S. ability and determination to adopt the approach, Teymoori said despite what appears to be a periodic implementation of protectionist and unilateral policies and claims of pursuing them, the “unbridled” American firms are reluctant to undertake such shift, which could undermine their prospects in the global economy.
“Although such economic policies would, in the short term, possibly contribute to the U.S. production sector on the back of the government’s financial support and protection, they, in the long run, would harm the U.S. companies’ competitiveness as they would lose a big integrated market, in which their connections have been formed,” he said.
Containers are transported by trucks at the Pacific international container terminal of Tianjin Port in north China’s Tianjin, April 11, 2023. (Xinhua/Zhao Zishuo)
“China is an important and integral part of this integrated market, having improved its ranking and status in the global value chain,” he added.
At present, it is impossible for the U.S. production sector to reverse the outsourcing process, said the researcher, noting that the U.S. government raises such issues only to secure votes and satiate public opinion at home.
Commenting on the history of the U.S. transfer of production to other parts of the world, he said that in the 1980s, the United States resorted to large-scale outsourcing and expanding its global market in an effort to respond to the accumulated demands of society and its labor force resulting from the lingering economic recession.
During the process, a number of emerging economies, including some in East Asia, managed to accelerate their development, with China no exception.
China featured the most significant and rapid development, he said, citing favorable factors such as the country’s effective policies, large population, territorial potential, and global influence.
Although the U.S. protectionist policies may, in the medium term, cause minor harm to the Chinese economy, they, in general, will fail to have any significant negative impact on China owing to the strength of the country’s manufacturing sector, which is much greater than that of the United States, he said.
However, unlike China, the expert pointed out, European economies and manufacturing industries have always been at the mercy of such U.S. policies due to their dependence on the United States.
Describing this “double-standard approach” as indicative of the U.S. “hegemonic mindset,” Teymoori said that “the United States is using its hegemonic tools, namely military power and the dollar,” to dominate other countries.
The United States, he said, is currently resorting to solely force and intimidation to convince its partners to comply with its policies.
“The U.S. adoption of a zero-sum economics policy to assert its dominance, particularly by using the dollar, has harmed its partners on many occasions,” he said.
Teymoori said in the 1980s and 1990s when the United States realized that its manufacturing sector had suffered losses in competition with some of its partners, it resorted to its hegemonic, domineering and military capabilities, for example, in 1985 it signed the Plaza Accord with France, West Germany, Japan, and Britain to depreciate the U.S. dollar in relation with the countries’ national currencies, and imposed voluntary export limitations on the companies of some of its partners, such as Germany and Japan.
The export limitations, he said, prompted those countries to compensate for the costs and losses suffered by the American firms and their workforce, and brought them to their knees.
“Such policies will make other countries reluctant to enter a partnership with the United States,” he said, adding that the United States is still oppressing other countries by using the dollar, Teymoori noted.
