US President Joe Biden’s senior adviser for energy and investment, Amos Hochstein, had a blunt message for the world this week.
But just down the road from the Westin Hotel where Hochstein was speaking, another missile of the economic warfare kind was launched this week. Decoupling is happening in financial markets, Chinese holdings of US treasury securities are in freefall, dropping from $US1.3 trillion in 2014 to just over $US750 billion at present, according to Deutsche Bank’s latest analysis of Federal Reserve data. China’s overall net purchases of US assets, including US treasury securities, corporate bonds and corporate stocks, have declined in the past six months.
“I’ve made sure that the most advanced American technologies can’t be used in China – not allowing to trade them there,” he said. “Our work shows that the while the cost of US manufacturing is roughly 30 per cent above China on a production basis, costs are far more comparable on a more sophisticated total cost of ownership analysis,” Snyder says.
A factory producing car mats in Yantai, eastern China. The re-shoring of US manufacturing could be worth $US500 billion annually.Then there is the taxpayer burden of a record $US360 billion in government clean energy subsidies and tax credits under the Inflation Reduction Act. The IRA will raise $US300 billion over a decade by forcing corporations to pay a 15 per cent minimum tax on their profits and a 1 per cent tax on stock buybacks.