Biden’s legacy will be transforming the Rust Belt into the EV Belt

In the years to come, July and August of 2022 will be remembered as the months that changed the course of America’s place in the 21st century. 

The months witnessed three events: The Biden administration signed into law the CHIPS and Science Act, followed by the climate-driven Inflation Reduction Act (IRA) and House Speaker Nancy Pelosi (D-Calif.) made a historic visit to Taiwan, ignoring the People’s Republic of China’s warnings against such a trip. All three events are interconnected and will help to revive the soul of America by creating employment in the manufacturing sector, addressing climate goals and transforming the Rust Belt into the EV Belt — while simultaneously committing to allies and partners around the globe.  

Over the past five years, former President Trump’s rhetoric and hyperbole created the impression that America could not revive its manufacturing prowess or fix its society’s ills without turning the clock back to the 1950s — not just for manufacturing but for the nation as a whole — by being less diverse and less progressive. President Biden has proven otherwise.  

While Trump often used immigrants, minorities and women as his whipping boys, creating fissures and limiting the scope of social cohesion, President Biden has proven that you can have your cake and eat it too. Biden’s administration is the most diverse in history and he has signed into law legislation that will revive American manufacturing in the Rust Belt and beyond. 

The new EV ecosystem is primarily being created in states such as Ohio, Michigan and Missouri. At Rouge Center in Dearborn, Mich., Ford plans to invest $2 billion to increase the production of the new F-150 Lightning electric truck to 150,000 per year and in Avon Lake, Ohio, the automakers plan to invest another $1.5 billion, creating over 1,800 union jobs to build the electric commercial vans. 

Further south, in small town Commerce, Ga., SK America, a subsidiary of the Korean battery maker, is manufacturing batteries for the F-150 Lightning. In a town where the most available employment is at warehouses making $9 or $10/hr, a base wage of $18/hr lives up to the promise of the American dream — economic mobility.    

The CHIPS ACT and the IRA will also create jobs and revive semiconductor chip manufacturing in Arizona, Texas and Ohio and bring high-paying technology jobs to Pennsylvania and Georgia, which have yet to recover their manufacturing prowess of the past.

Semiconductor chips are symbolic of the dwindling state of American manufacturing. In the 1990s, 37 percent of chips were manufactured in the states. Fast-forward 25 years and less than 12 percent of chips are manufactured in America. This abysmal statistic can be attributed to bipartisan public policy that supported cost efficiencies for American corporations over workers and middle-class well-being. Furthermore, the idealistic notion that China would democratize or liberalize with an increase in trade has been debunked over the last 20 years, proving the lawmakers who brought China into the fold of the World Trade Organization wrong. 

With these lessons in mind, U.S. administrations starting with Trump’s have worked toward redrawing the trade architecture. Biden has championed both competition with China and measures addressing climate change, proving that it does not have to be one or the other. The IRA is a case in point. As President Biden forecasts in a tweet, going forward, when Americans pop the hoods of their cars, they will see “Made in America” on their batteries. Vehicles will be electric and be made in America. The IRA will also assist in almost quadrupling the number of solar panels in America from 240 million to over 1 billion over the span of the next eight years.  

There’s little doubt that Biden’s domestic measures are also a product of global events such as China’s coercive actions toward Taiwan and its control of several renewable energy supply chains. Pelosi’s trip was more than a grandstanding gesture. The threat of Chinese annexation looms over American industries that rely on chips created in Taiwan. Given that over 90 percent of the most advanced chips are manufactured in Taiwan, over the long term, the CHIPS Act will secure the supply chain in the increasingly likely event of China invading Taiwan. Thanks to the act, chips manufacturing will be revived in Arizona, Texas and Ohio. Small town Johnstown, Ohio has a good problem — finding 7,000 workers for the state’s largest economic development project — Intel’s chip plant.   

The rise of populism in America can be partially attributed to the hollowing out of manufacturing devastating towns in Ohio, Pennsylvania, upstate New York and several Southern states. Not surprisingly, over the past 20 years, citizens have witnessed an opioid epidemic, soaring crimes, hate crimes in particular, with immigrants and people of color becoming the easy scapegoats for all the peril. Furthermore, as we witnessed with former President Trump’s rise to victory with anti-establishment rhetoric, there was increasing distrust in Washington to represent the interests of middle America.  

With manufacturing jobs returning to towns such as Commerce and Johnston, American manufacturing may be undergoing a renaissance. This will revive not just manufacturing in America, but the soul and spirit of the nation by steering residents toward shared prosperity. 

In a highly polarized and clamorous society, President Biden’s transformation of the Rust Belt could just be what the doctor ordered.

Akhil Ramesh is a fellow with the Pacific Forum. He has worked with governments, risk consulting firms and think tanks in the United States and India. Follow him on Twitter: Akhil_oldsoul.