Free Markets and National Defense: U.S. Import Dependence on China

Abstract: Americans buy a huge quantity of goods— ranging from audio-video equipment to clothing—made, or at least assembled, in China. The vast amounts involved raise the possibility of U.S. dependence on China. Heritage Foundation Asia economist Derek Scissors looked at the numbers and found that Chinese imports to the U.S. are concentrated in areas with little or no strategic value. This does not mean that dependence on China, or on other economic partners, is impossible. Dr. Scissors presents six principles to identify or rule out dependence and to guide policy in limiting or mitigating any future dependence. If the job is done right, Americans can enjoy free trade and national security.
Systematic scrutiny of the huge volume of U.S. imports from the People’s Republic of China (PRC) reveals no meaningful American dependence on China. For a large number of goods, China is indeed America’s leading foreign supplier. When put in the context of total U.S.-based consumption, however, that weight lightens. More striking, imports from the PRC are concentrated in areas with little or no strategic value. To guard against future dependence, and to protect against uncertainty caused by inadequate data, there are reasonable steps that can be taken to fully protect America’s defense capabilities.
Commitment to the free market and a strong national defense are almost always complementary. The ability to freely import materials, products, skills, and technology cuts costs and improves the quality of defense. But the complementary relationship between free markets and strong defense is not so clear when considering American rivals, such as China.