By: Greg Owens, Co-founder and CEO of Sherrill Manufacturing, Inc.
The post WWII order is changing right before our eyes. The people of Ukraine are putting up a tremendous fight. The world has rallied around them from economic sanctions to protests in the streets. Putin’s attack on world order is being categorically rejected with a few very notable exceptions.
For the past 30 years or so we have been told that the key to establishing world peace was the global integration of all economies. Globalization has proven to be disruptive if not a disaster for millions of working-class folks in the United States and other developed nations. Globalization has neither brought the prosperity that was promised to people of developing nations nor the democratic reforms that were supposed to take place in Russia and China. Instead, it has left us in a conundrum in terms of reacting to the Russian assault on Ukraine.
John McCain once called Russia a glorified gas station masquerading as a country. Funny as it may have seemed at the time, the Russians have managed to make Europe dependent on their oil and natural gas with no quick or easy solution. There has been a lot of talk about revoking Russia’s access to the SWIFT system. Germany and many countries in the West pushed back and have limited their reaction because without access to SWIFT Europe will not have access to Russian oil and natural gas with no alternative source. It appears as if Putin has made several miscalculations, particularly underestimating the resolve of the Ukrainian people to resist his invasion and the harsh response of the international community. One thing he did not underestimate appears to be the leverage he holds over Europe as their supplier of energy.
Condemnation of Putin’s attack on Ukraine has been almost universal with one very notable exception, China. Russia predictably vetoed the resolution to condemn the attack in the U.N. Security Council and China abstained. Recently China has been cozying up to Putin, signing a mega 100-million-ton deal to purchase coal as well as publishing a 5,000-word memorandum consolidating their cooperation against the “threats” posed by the United States and other Western democracies. In a moment when it can easily be said that you are either with us or against us, through their silence and unwillingness to condemn Russia, China has chosen to support Putin’s world disorder.
This should be sending shock waves through the world economic and financial systems. If you think Europe is in a conundrum over Russian oil and natural gas, imagine what sort of predicament the United States and the rest of our allies will be in if China decides to move aggressively against Taiwan. From prescription drugs to toasters the West is so dependent on supply of goods from China that an abrupt move to cut off trade is almost unimaginable. They have us in a box and they know it.
The recent rise in inflation, primarily a product of the pandemic, has fueled the argument by the dying ranks of globalists to eliminate tariffs. The reality is that we need to do exactly the opposite. The Chinese have built an enormous industrial machine at the same time they have strategically dismantled key industrial sectors in the West. Recognizing this, the process of decoupling the economies of the West from dependence on China has been slowly underway for several years. It is time to put that process on steroids.
Governments will be slow to react, and multinational corporations will do everything they can to slow the process in Washington and across the globe. In the end the real power lies with consumers who have a choice regarding how they spend their money. It will cost more to buy goods that are produced in the United States. In many cases the things we need are no longer made here.
It is one thing to raise our voices in protest of Russian aggression in Ukraine, but, in reality, there is very little that consumers can do to impact Putin other than perhaps switching brands of Vodka. In the case of China, it is very different. A boycott of Chinese goods and support for American-made goods will send a strong economic message to Beijing. The American consumer can take action and send that message loud and clear to Xi Jinping and the rest of the Chinese leadership: your lack of support for Ukraine and back-door support for Putin is not going unnoticed. Naked aggression against sovereign nations will not be tolerated and the freedom-loving people of the West are prepared to make sacrifices to defend freedom around the world. The time to act is now. Buy American.
