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More U.S. Manufacturing A Must Amid Crisis (Lisa Ferrell Commentary)

3 min read

As businesses rapidly encounter more unprecedented challenges, the ability to adapt immediately will be the key to long-term survival.

In the face of the pandemic, our company pivoted from real estate development to providing high-quality PPE, first in our home state of Arkansas and then to businesses and individuals in 34 states. Several lessons emerged from the experience; one crucial lesson is that the U.S. urgently needs to increase domestic production of critical goods.

Every time our new business faced a challenge, we sought local solutions first. We used Arkansas suppliers, retail outlets, custom designers, printers, packagers and more. Our efforts employed 70 Arkansans in mask production and distribution.

Ultimately we needed other suppliers as demand outstripped the ability of the local manufacturer to provide masks. First, we looked without success for U.S. suppliers as few U.S. textile manufacturers still exist. Then we turned to our network of existing Chinese construction industry suppliers who were able to meet our high standards. The manufacturers themselves have proven to be good partners.

But sudden Chinese and U.S. government rule changes and tariffs between the two countries made importing difficult. Limited air transport and long lead times for cargo ship delivery exacerbated the problem.

Hospitals and first responders were largely unable to obtain even more critical PPE, such as N95 masks and sterile gowns, due to worldwide demand, inadequate domestic supply and deliberate limits placed on exports by the Chinese government. The U.S. absolutely must increase its manufacturing capacity for critical supplies or, at minimum, stockpile them.

In the face of another pandemic, PPE can be weaponized, reserved for the producing nation’s citizens or given out for strategic geopolitical purposes. China has become the global supplier of PPE. Chinese PPE and medical equipment manufacturers get significant subsidies and benefits from government mandates for purchasers to buy Chinese goods. While being dependent on any country for life-saving equipment is a precarious position to be in, given the state of U.S.-Chinese relations, it is downright dangerous.

The U.S. government must make the investment and market guarantees that will significantly increase U.S. production and ensure its citizens have access to life-saving gear without having to navigate the international tensions of the day.

Unfortunately, the pandemic still plagues the globe and our country, and the need for PPE will continue. Our business will continue to supply PPE to our customers. Starting a business amid trade tensions and heightened global anxiety has called into question my embrace of globalism, free trade and high tech.

Our company was able to succeed by turning to local partners first and relying on longstanding relationships. As the world faces the alarming consequences of climate change, more deadly viruses and other unknown challenges, nations must cooperate to solve these problems; however, businesses may fare better working locally to combat the resulting marketplace and supply-chain uncertainties.

Having witnessed the desperation to obtain life-saving PPE by our clients who are medical providers and having personally experienced the difficulty of getting PPE from China due to tense U.S.-China relations, it is clear that a pure free-trade position with regard to critical goods is not in the best interests of the United States. While combating the current pandemic, the Biden administration and Congress should use the U.S. Innovation & Competition Act to ensure that we have the domestic capacity to withstand the next global crisis without relying on the vagaries of geopolitical conflicts.

Lisa Ferrell, CEO of North Bluffs Development Corp. of Little Rock, is the founder of Southern Cap Opportunity Zone Fund LLC, a team of tax, legal and fund professionals connecting investors with eligible opportunity zone projects.
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