Hacker News Reader

Comment by fma | Hacker News Reader

The covid tests mailed to me by the US government are made in China. I'm sure the government contracted it to a US supplier who bought the tests from China...but come on . 2 years in and we aren't producing even Covid tests?

Why can't the US government mandate hospitals need to purchase a percentage of their supplies from US manufacturers in order to receive medicaid/Medicare. It can be 10, 20%, low enough to keep costs down by importing the bulk from China, but high enough to maintain a base that can be ramped up.

View on HN

>2 years in and we aren't producing even Covid tests?

It's an error to assume that there are absolutely no COVID tests made in the US simply because the small handful you received wasn't.

For instance, the popular over-the-counter at-home test manufactured by Abbott is made in the US, except for swabs (mix of Thailand and US) due to supply/demand issues.

https://www.globalpointofcare.abbott/en/product-details/bina...

Abbott sells their Binax test in the US for like 5x the price they sell the same test for in Europe, because the FDA was slow to approve other brands of rapid tests and used questionable criteria,† so they had substantial monopoly pricing power while other vendors’ tests were restricted.

If the only way US test production can compete is via predatory price gouging, that’s hardly a sign of health.

†: The criterion was performance vs. PCR test, even though PCR and antigen tests measure different things, so that the vendors who slipped through the regulation were those who best gamed the test studies, while various other vendors with tests that perform nearly identically in practice failed FDA study criterion. The FDA refused to accept a performance comparison of new antigen tests vs. already approved antigen tests.

> It's an error to assume that there are absolutely no COVID tests made in the US simply because the small handful you received wasn't.

It's an error to imply they were making this assumption in the first place. I, too, am baffled that two years into a pandemic, any tests are coming from China. Didn't the whole thing _start_ there?

Why would one not want to get tests for a disease from the place where the disease started?

It's more what it says about our government's utter incompetence. If we can't solve the problem of distributing masks in an arguably _light_ pandemic, what the hell should we expect when a worse one comes along...?

Global supply chain issues have clearly stuck around, and we're relying on another country on another continent to provide something that would classify as an emergency good. You tell me how that makes sense.

The downvotes are cute, this is a very legitimate concern though. There's nothing wrong with wondering why China releasing a virus is just an "oopsie."

>It's more what it says about our government's utter incompetence. If we can't solve the problem of distributing masks in an arguably _light_ pandemic, what the hell should we expect when a worse one comes along...?

It's a tall order to fix 40 to 50 years of global offshoring in a 10 months. If COVID has taught me anything, I believe we are more likely to just grit our teeth and put up with the costs than actually try and fix the issue in the future. Americans will never buy (or could possibly afford) domestically manufactured goods. There is already fervor at increased food prices due to the labor price increases all across the food chain; you want to do the same to cups and plates? It would never be politically successful.

>The downvotes are cute, this is a very legitimate concern though. There's nothing wrong with wondering why China releasing a virus is just an "oopsie."

Because it's not a productive conversation. 1) Whether it's an "oopsie" or not, Americans were still unprepared. 2) If it's not an oopsie, what are you going to do? Invade China on a hunch? 3) Given the history of respiratory diseases in China (e.g. SARS), and the growth of China in the global economy, isn't it more likely that is SARS 2 ever occurred it would be global in nature? This isn't the first time China has had to deal with a respiratory virus.

> fix 40 to 50 years of global offshoring in a 10 months

That's... not what I asked for. We're talking respiratory cloth masks here, not the global economy.

Our discussion will be more productive if you don't put words in my mouth.

You're really trying to ignore the obvious red flags. Respiratory masks for US consumption being made in China is not a result of globalization. It's just corporate greed hiding behind virtue signals.

What makes you say it's corporate greed, rather than a very strong consumer preference for the cheapest price? In the mask-price-race-to-the-bottom, US factories aren't competitive due to wage and environmental regs.

>We're talking respiratory cloth masks here, not the global economy.

Where do you expect these masks to be made? In people's backyards? When you are talking about suppling millions of masks, you are talking about the global economy. The tooling that is used to quickly ramp production to that scale is because you can take already existing systems that are used to develop clothing and other apparel and rapidly convert them to making masks. If you don't have that, then where do you expect it to come from? If you don't already have people working in factory, making clothes, where will you find the people to start making masks? Then lets say you do find these people, on very short notice. You are now paying them american labor prices; will your potential customers just choose to source from overseas anyways?

I'm not putting words in your mouth; maybe you aren't fully aware the effort it would take to ship millions of anything on such a short timescale without having the existing infrastructure to do it; especially if that infrastructure hasn't existed for a very long time. You are putting forth a very difficult problem very matter of factly.

> Why can't the US government mandate hospitals need to purchase a percentage of their supplies from US manufacturers in order to receive medicaid/Medicare.

Trade agreements most likely.

I would not be surprised if that sort of preferential treatment would count as a subsidy and be actionable under NAFTA (whatever it's called now).

We also have a healthcare cost crisis. It wouldn't just be masks, it would be literally everything the hospital buys, and it would "tie their hands from getting the best price for patients" (I guarantee you a Republican would use a similar line in a campaign if that proposal went through.

The FDA and CDC made it illegal for US hospitals, companies, and universities to produce COVID tests until after the CDC effort to produce them had already failed twice. By then there was a booming business in China and South Korea making tests. We only knew about the outbreak in Seattle because some brave scientists broke the law and ran their own tests.

I would also add, as other people have mentioned, that domestic manufacturing requirements are at best over priced jobs programs through the back door.

Part of the issue is that American businesses are not always better. So a requirement of purchasing subpar overpriced products just because they're American-made doesn't help anyone. They need to find ways to create innovative manufacturing in America.

Simple naive economics suggests otherwise. If a 10% domestic requirement keeps demand artificially high, competition will enter the market. New factories, etc. will spring up to get a piece of the fat. They will compete on price, quality, etc.--all the usual points of competition. People will get creative to get their piece of that pie. (Of course some of the creativity will be figuring out ways to subcontract it to China and still count as American.)

I mean you got the naive economics part right. These kinds of contracts are selected based on relationships, not product quality or even business acumen. In your mind the government conducts regular technical product evaluations of every small business that attempts to make masks at scale? That isn’t reality.

They are saying each individual hospital would have to choose a domestic manufacturer for atleast part of their supply. This would cause more domestic manufacturers to start up and compete for each hospitals business. The rule would affect the hospitals directly, not the mask makers.

At a minimum it is a jobs program, and so can be viewed as part of the welfare state (a lot of government spending falls, at least partially, into this category).

Perhaps more importantly, it provides a national strategic interest that is not easily captured through economic analysis. When times are good and international trade happens smoothly this is not important, but when the international market breaks down for some reason, having domestic production gives our government more options in how to respond.

We saw this with covid, when every nation was scrambling critical resources to deal with the public health emergency. We see this now with Russia, who is regretting how dependent they on foreign trade; and in Europe who are regretting how dependent they are on Russian energy.

This ignores the massive levels of subsidies that the Chinese govt provides to their companies.

https://www.scmp.com/economy/china-economy/article/3167588/c...

Bud, if you think only China is playing the subsidy game, you are sadly mistaken: https://www.forbes.com/sites/taxnotes/2020/11/20/boeings-tax...

Bud, please understand that this is a spectrum and not a binary situation.

Also, Chinese restrictions on companies restrictions on foreign companies pale in comparison to the freedom they enjoy in the US.

https://www.aljazeera.com/economy/2021/12/28/bbchina-unveils...

https://www.cnbc.com/2021/09/28/enticing-china-market-tricki...

Google, Facebook and Twitter are all banned in mainland China.

https://www.cnbc.com/2020/10/12/chinese-app-that-let-users-a...

https://en.wikipedia.org/wiki/List_of_websites_blocked_in_ma...

Meanwhile, TikTok and the likes are freely allowed to shape our minds.

Blocking foreign companies is a form of massive subsidy.

One reason the software industry in America is so successful is because there is no government license required to write software, and software can be shipped without needing approval from the government, and the government doesn't regulate how the software is written.

Yes, I know if you write software for a medical device, the FDA will have to approve it.

Perhaps because software on its own is unlikely to hurt people, while we have seen plenty of physical products causing deaths and mutilation: Failing car breaks, cellphone batteries catching fire, strollers cutting off fingers, playground structures collapsing and so on. It only takes a few shitty products in a category for regulations to be set up

The USA (and UK) seem to have entirely lost sight of the fact that there are strategic industries, capabilities and products as a result of a blind devotion to the ideology of the "free" market and a belief that globalisation is forever and always and that you'll always be able to buy whatever you need from whomever you want. The requirement to purchase some domestically made products is a hedge against such events as a global pandemic or large scale war. Innovative, high tech, high skill manufacturing is important, but so is boring, non innovative, low margin manufacturing that provides resiliance.

> Why can't the US government mandate hospitals need to purchase a percentage of their supplies from US manufacturers

Off the top of my head:

1. what if US manufacturers can't supply them in sufficient quantity

2. what if US manufacturers' delivery dates are too far in the future

3. what if US manufacturers' product does not meet standard

4. what exactly is a US manufacturer anyway, in a world with a global supply chain and complex ownership structures?

5. what if there's only one US manufacturer, and so can charge monopoly prices?

The manufacturing cost in US is too high, but the productivity isn't proportionally higher.

Regulations and labor protection is good for workers, but it will increase cost and if those manufacturers have choice they will source their suppliers elsewhere.

Other comments also mentioned, that made in US isn't really a hallmark of quality across the board, if the consumers are expected to pay 2x-3x more, then it better has something extraordinary to offer, I don't think mask had that much differentiation

I don't think it's due to manufacturing costs. Just look at how much insulin costs to make and the price it's sold at in the US.

This is how companies think:

If you can make something in the US for $5 and sell it for $300 you make $295 profit.

If you can make it in China and ship it to the US for $4 you make $296 profit.

Therefore its better to make it in China. They disregard literally every other benefit.

What you give as an example is a product with insanely high margins. Here, it indeed makes sense to produce it in your home country, because it won't make a huge difference.

Most products on a market have slim margins and here such production costs make a huge difference in profit if the buyer is not willing to pay much more for products (partially) produced in the home country.

3M N95 masks are 1.9 dollars each, while the Chinese ones KN95 are 0.4 each, korea made kf94 masks are between 0.5 - 0.8. Unless 3M masks have some magic in itself (like make me immune to covid), the pricing doesn't seem very appetizing

I think it is pretty self explanatory.

USA can restrict import of medical devices and already makes it broadly illegal to import medical drugs. https://www.fda.gov/about-fda/fda-basics/it-legal-me-persona...

(I'm not advocating for these restrictions.)

There are a number of contributing factors. The lack of manufacturing in the US, which you can blame on bean counters wanting to utilize Chinese slave labor. A tax system that prefers the lower wage workers be either on the dole, work illegally, or work 3 gig-based jobs. A kafkaesque government contracting system dreamed up and continually patched by government workers. The same government workers that would work private sector if they were given a chance. But, they often can't because a lack of experience, aptitude or drive.

Slave labor? Surely the ratio of Chinese laborers who feel enslaved is low enough that it's inappropriate to describe Chinese labor on the whole as slave labor.

Some are literally slaves.

Many are nearly so. Giving people a thin veneer of token but not real freedom and token but not fair salary or decent working conditions doesn't absolve you of abuse.

Raise people in an environment where people learn that how they are being treated is right and make everyone fear dissent and you just won't hear about many peoples feelings from the other side of the world.

Obfuscation is the name of the game in the 21st century, make absolute things grey areas, and add layers of abstraction to the extent that you can't really tell what's being done or whose fault it is so that the same kinds of exploitation can keep going on and it's not so easy to be opposed to it because finding the target is just hard.

Hey, now I understand people who insult people by saying they have savior complex! It’s all about thinking you have agency and other people don’t.

> Many are nearly so. Giving people a thin veneer of token but not real freedom and token but not fair salary or decent working conditions doesn't absolve you of abuse.

“Real freedom”? “Fair salary”? “Decent working conditions”? What makes you think Chinese people can’t make their own choices? They’ve been leaving the countryside nonstop for 70 years. The pay for unskilled labor has been going up pretty much nonstop since Deng opened up. China has a lot bad about it but I doubt you would be pretending Thai people are unthinking automatons and they’re about as rich as Chinese.

> Raise people in an environment where people learn that how they are being treated is right and make everyone fear dissent and you just won't hear about many peoples feelings from the other side of the world.

Indeed. You could make children sit down, shut up and do as they’re told all day five days a week if you just told people it was normal. You could invade and bomb other countries with impunity. You could support other countries in intervening in civil wars to keep them going without end. Good thing we’re free. Good thing we right thinking people would never do anything like that.

That's a whole lot of whataboutism to excuse human rights issues in a brutal and immoral country.

It didn't sound like an excuse to me, but a distinction between slavery and something else. Not all exploitation is slavery.

Go watch American Factory to see what conditions/mentality is like in Chinese factories.

Watching a Netflix documentary is generally not a great way to learn about how the world actually works.

It's a start.

Or just go to any major e-commerce warehouse here in US.

It is not that different when the time you pee is measured and factored in pay

No, I think slavery is significantly different.

It is very different. Go watch the documentary and come back to me.

> The lack of manufacturing in the US

> The United States is the world's third largest manufacturer (after the People's Republic of China and the European Union) with a record high real output in Q1 2018 of $2.00 trillion (i.e., adjusted for inflation in 2009 Dollars) well above the 2007 peak before the Great Recession of $1.95 trillion.

https://en.wikipedia.org/wiki/Manufacturing_in_the_United_St....

From your link: the US made up 28% of manufacturing in 2002, dipped steeply, and then rose back to 18%. That's a huge loss of manufacturing. Especially when you consider that the manufacturing activity in China is, in large part, US companies gutting their own operations to save a buck. The short-sighted, "well educated" Harvard MBA bean counters aren't taught in school what comes next. After they gut and globalized, China steals their IP and floods the market with clones under a dozen shadow brands.

The bean counters got their salaries and bonuses. Why should they care what happens next?

It seems to me that historically the real controls on our business models were social, not regulatory. And with ethics and conscience removed, we've become a society being slowly devoured by a close relative of paper-clip optimizer AIs, running on distributed and fungible human wetware.

It never dropped in absolute terms. It’s been on a constant upward trend. As a proportion of global manufacturing it dropped but that’s inevitable with other economies growing if you’re as big a part of the global economy as the US is.

Tell that to the rust belt.

My understanding is that a lot of the US' manufacturing output is an artifact of how agencies do statistical adjustments for improvements in computer chips.

Huh, it's strange that they'd consider the EU a "single" manufacturer for the purposes of that list.

It's helpful to do that because it provides like-with-like comparisons.

Functionally the EU operates with zero internal customs etc, free movement of people etc. It also represents a population group of a similar size to the US and China.

In the same way, breaking down manufacturing in the US by state, and comparing each state to China is not helpful, so dealing with each European country invidually in the comparison would not be helpful.

Shouldn’t Canada and Mexico be combined with the United States based on those criteria? NAFTA is still a thing.

I thought of that as well. But while there is a mostly free movement of goods, there isn't a free movement of people.

Plus from a motivational point of view adding in Mexico and Canada does nothing for those keen to improve the state of US manufacturing. Inside Europe there would be similar reports comparing the individual countries - and I suspect at the US state level there might be studies as well.

With the free movement of people though internal competition is less beneficial. (although geographic spread is still desirable.)

Reply on news.ycombinator.com