For Want of a Washer, an Economy Was Lost

March 4, 2020 Updated: March 5, 2020
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Commentary

I learned today that a Bosch factory in northern Kentucky had to shut down an assembly line for lack of parts.

The “line,” as such things are called, was in the business of making automotive steering columns. My first thought was that some vital, complicated, and expensive component was in short supply. You know, the kind that only one factory in the world makes.

Then I found out that the missing part was a washer. Not the kind you launder clothes in, but the kind that consists of nothing more than a thin, round piece of metal with a hole in the center. Yes, that kind of washer. The kind that with the right steel and the right stamp, you can make for a pittance.

But for want of a washer, an American assembly line had to be shut down.

You may have guessed by now that the missing washers were supposed to be made in China, shipped to the factory “just in time” to be used in assembling steering columns. What you may not know is that most Chinese factories aren’t making, or shipping, anything much at the moment. It’s hard to run a production line when most of your workers are huddled in their homes waiting for the coronavirus outbreak to pass.

But the missing washer isn’t just a statement about how China’s economy is at a standstill. It’s also a commentary on how dependent the United States has become on the crippled communist giant.

I have to admit I wasn’t happy when I heard the news about the shuttered assembly line. You mean to tell me that we have so hollowed out our manufacturing base that we can’t make a simple washer?

I don’t know how many times this same story is being played out in factories around the country. But I suspect that more than a few assembly lines will be slowing and stopping in the days and weeks to come. Workers will be idled waiting for a washer, or a nut, or a bolt—or whatever cheap widget the company decided years ago to save a few pennies on by sourcing it in China.

The ripple effect of such shortages throughout the economy is potentially serious. This explains why the U.S. Federal Reserve held an emergency meeting on March 3, and decided to cut rates by half a percentage point.

A supply chain brings in parts from around the world to assemble in a given location. Much like a real chain, it fails if even one link is broken. And many supply chains that rely on China are currently broken, or soon will be.

The good news is that, thanks to the Trump administration’s tough trade policies, supply chains were starting to shift even before the coronavirus epidemic hit China. Many U.S.-based companies are now sourcing parts in places such as Vietnam, India, and Mexico. Some have even started making their products in the safest place on earth, the United States of America.

Still, the process of shifting supply chains away from an unreliable China is far from complete. We must look elsewhere not just for washers, but for auto parts and accessories, for high-technology goods such as 5G and phones and—especially now—for pharmaceuticals and medical supplies. The current tariff regime must be kept in place, and even strengthened over time, to ensure that this happens.

Our current predicament vis-a-vis China reminds me of Benjamin Franklin’s proverb, “For the want of a nail, a kingdom was lost.”

In the story, a messenger sets out to warn the king that the kingdom is being invaded. But his horse throws a shoe along the way and goes lame. The rider never reaches the king with his message. The kingdom falls.

Let’s not be that kingdom.

Steven W. Mosher is president of the Population Research Institute and the author of “Bully of Asia.” You can follow his work on China on Twitter @StevenWMosher.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.