Washington’s regulations frenzy shouldn’t shortchange Middle America

Over the past eight years, there has been a growing bipartisan effort in Washington to rethink trade and economic dependence on a single nation, particularly the People’s Republic of China.

Industrial policies that support supply chain diversification are gaining support among both Democratic and Republican lawmakers.policies such as CHIPS and scientific lawis working to ensure the safety of the semiconductor supply chain. inflation control law We support onshoring, nearshoring, and friend-shoring of critical and advanced technology supply chains.

While these policies are borne out of national security concerns, complaints from communities that have been hollowed out of high-wage manufacturing jobs are not new. People in the Midwest and other parts of Central America have made this abundantly clear since the post-war period. Protests calling for the cancellation of the Trans-Pacific Partnership Agreement In the Obama administration.

Interestingly, there is a concerted effort to shift semiconductor supply chains, EV battery and even solar panel manufacturing, while reducing dependence on China for everyday goods sold by major retailers. Almost no efforts have been made to reduce it. Despite the US government positioning partners such as India and Vietnam in the domestic supply chain for products sold by major retailers in the US and elsewhere, walmart, Amazon As such, the supply chain has not significantly shifted away from China.

Dependence on China is increasingly becoming a fait accompli. In this environment, the Federal Reserve’s proposal Rule IIIt cuts by almost 30 percent the amount of interchange, or “swipe” fees that financial institutions can charge retailers for debit card payments, but it is not a sign of Washington’s commitment to Central America. . On the contrary, it shows a disconnection from the reality of the community, in this case the mom-and-baby store.

Big retailers could benefit the most, but 2 billion dollars The proposed rule changes would have a significant impact on banks, both large and small, but especially on the smaller side. Exchange fees apply between banks to process debit and credit card transactions. Retailers incur a fee each time they process a debit or credit card transaction. Fee increases affect small retailers and benefit large retailers.

While the Biden administration has prioritized securing supply chains and building resilience in advanced and critical technologies, the status quo prevails in other areas.

Earlier this year, the American Bankers Association and the 50 state bank associations letter to the federal reserve Says They “strongly oppose the Federal Reserve’s ill-conceived proposal to lower the cap on interchanges regulated under Regulation II.” It called for “the proposal to be withdrawn pending a thorough investigation.” [its] Tsunami Impact and Cumulative Impact of Newly Finalized and Pending Regulations by Banking Institutions.”

Onshoring, nearshoring, and friend-shoring have been employed to strengthen U.S. supply chains and strengthen national security protections, particularly against economic coercion. A similar approach is needed for everyday products that prioritize American communities over big box stores.

In this case, the proposed regulations would only have a negative impact on American banks, large and small, and would result in higher fees being imposed on consumers in the form of maintenance and other fees. There is a possibility that it will happen.

Going forward, the United States should prioritize the concerns of Central America, not just the shareholder value of American companies.Continue last week’s meeting When considering the relationship between American business leaders and Xi Jinping, it becomes clear that the interests of Wall Street, big business, and Washington are not always aligned. The interests of Central America and large corporations also do not align.

In America’s tumultuous democracy, people-led movements can overthrow the government, especially in election years. As November approaches, policymakers must recognize voters’ concerns about business and commercial interests if they are to succeed. Bowing to business leaders who mend relations with China, host bilateral dialogues, and praise President Xi does not bode well for lawmakers seeking re-election in Washington.

Regulation II is a reminder of neoliberal policies that prioritized corporate profits. In an election year, reverting economic and trade policymaking to the pre-Trump era may not be what the doctor ordered.

Akhil Ramesh is Director of Pacific Forum’s India Program and Economic and National Strategic Initiatives. Follow him on Twitter: Akhil_oldsoul.