Jacob Hess, Ph.D.
When the oxygen mask drops in our laps on an airplane, we all know what to do: put on your mask first. How are you supposed to help anyone else if you’re gasping for your own air?
That is why an “America First” approach has value — a policy first popularized in the period between the two world wars and returning to prominence starting in an early 2016 interview, when a New York Times reporter first suggested to Donald Trump the phrase “America first” as an alternative to “isolationist” in describing his foreign policy views.
After affirming the reporter, then-candidate Trump went on to summarize some of the ways America has invested money and other resources all around the world — even while facing significant struggles at home. Concerns around this imbalance subsequently became an emphasis of his successful campaign for the White House and central to the work of President Trump’s administration.
In our hyper-polarized atmosphere today, of course, many have been quick to condemn anything arising from this American First impulse. They are wrong to do so, however. There are many significant challenges here at home — on our own soil. And few would deny that America has, at times, overextended itself in involvements all around the world. In many ways, then, such encouragement to “take care of the home front” could be welcomed as a counterbalance — especially during a time when American homes and communities are grappling with so many critical issues.
Like other ideas with good potential, however, an American First policy can be misapplied and used for ends that contradict its original intent. In particular, there is mounting evidence that America First rhetoric is being misused in ways that could have deadly consequences for American businesses and workers here on the very home front it was designed to protect.
Last year, nine US mattress and component producers filed a petition with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that their businesses were being injured by Chinese-made products being sold in America at lower cost — a price they could not compete with.
On the face, this seems like a slam-dunk America First issue. And, indeed, in a fast-moving process the ITC concluded that mattresses were being “dumped” (exported at prices lower than the home-market prices) and ordered a duty (additional tax paid by consumers) on any incoming mattresses.
What wasn’t so evident was how such a decision would materially impact American businesses, workers and consumers. Not only was it many American businesses being punished by the new order — involving tens of thousands of American workers — but American consumers also stood to pay the price, in the added duty cost they could be required to potentially pay.
While there are obvious advantages to making products on our home soil, other advantages have led a majority of successful businesses in the United States to offshore at least some of its business process, as confirmed by a 2018 Wall Street Journal review of major S&P 500 companies.
Only a superficial analysis, however, would conclude that this is only about heightened revenue — since successful businesses have multiplied jobs at home as well and significantly improved American communities.
In addition to employing hundreds of Americans in four states, for instance, a Utah-based bedding company Malouf has donated $1 million to victims of sex trafficking and child abuse over the years — along with investing in educational efforts to raise public awareness about the tell-tale signs of trafficking. Along with supplying bedding to many rape-crisis and domestic violence centers, businesses like Malouf have also been critical in the COVID-19 crisis and its shortage of critical-need items in a strained hospital system. [Disclosure: Our tech company was recently acquired by Malouf, expanding our ability to reach hundreds of thousands more people facing depression, anxiety and substance/behavioral addictions].
Those who attempt to punish businesses incorporating overseas work, then, cannot do so under a simple “America First” slogan — not without an explanation to American workers, American patients, and the many Americans benefiting from a successful business’s involvement in the surrounding community.
Rather than a simple question of “what’s best for American businesses,” then, a comprehensive assessment requires more careful exploration of a more complex reality: in a situation where American businesses have pursued different methods of success, what’s the proper role of government intervention?
More specifically, in an instance where businesses have pioneered innovative models leading to lower-prices on high-quality products, do we want our government representatives to intervene in punishing those businesses — so as to give other businesses the handicap they need to compete?
That’s the relevant question needing attention — with significant implications for virtually every American industry today. Especially in a day when most industries (including the bedding industry) continue to evolve rapidly, applying punitive consequences to companies that are on the forefront of innovation should concern us all.
Rather than maligning one kind of business model, it seems much more reasonable to argue that some companies simply haven’t innovated sufficiently to keep up with a changing industry. Given that, these kinds of restrictive consequences to a subset of companies would not only violate the basic spirit of free enterprise; it could also arguably set back entire industries. (After all, it’s not a single company in any industry that would be targeted, but large swaths of any given industry).
If that’s the course pursued, it will be Americans consumers that are hurt worst of all — given how many depend on accessible products. Indeed, strong arguments could be made that these innovative business models are one thing that have driven so much of American prosperity. And in a time of economic turmoil, hampering free trade in a way that could influence product accessibility is the last thing consumers need — which is precisely what such punitive interventions will likely mean.
In sum: To attack certain American businesses in the guise of helping the American economy belies the devastating effects this could have on American workers and consumers alike. Given the significant role offshore support plays for American businesses, this is a dangerous precedent to set.
Yet these attacks continue. Last month, additional petitions were filed by bedding manufacturers alleging material injury from companies manufacturing mattresses in eight other countries.
Will we allow such imbalanced government interventions to favor one American business strategy over another?
If so, make no mistake: it will be Americans themselves it hurts in the end.