US needs free trade, not protectionism, in baby formula crisis
Published: May 19, 2022 10:28 PM Updated: May 19, 2022 10:24 PM
Illustration: Chen Xia/Global Times
Illustration: Chen Xia/Global Times

US President Joe Biden on Wednesday invoked the Defense Production Act (DPA) to boost production of infant formula. As the world's largest economy deals with a baby formula shortage crisis, the question remaining is whether the obscure wartime law can ease the anxiety of new parents who struggle to find enough formula to feed their babies.

As the formula shortage continues to grip the US, many attribute it to a combination of labor shortage, pandemic-induced supply issues, and production shutdown following recent formula recalls. Less attention has been paid to US trade policy, which is the root cause of the formula crisis.

The US had a long history as a protectionist country, with former US President Donald Trump making protectionism a high priority. Now, an industry-wide infant formula shortage offers a window to observe the impact of trade protectionism on certain industries.

Decades of misguided protectionism have offered US infant formula industry immunity from international competition.

The potential obstacles faced by foreign competitors seeking to enter the US market include tariffs and manufacturing standards imposed by the US Food and Drug Administration (FDA). As a result of protectionism, a majority of infant formula consumed in the US is produced domestically.

Protectionist trade policy makes the US infant formula market very vulnerable to factors such as supply chain gridlock. The US is suffering from its own protectionist trade policy.

Earlier this month, the FDA announced a guidance that outlines increased flexibilities regarding importation of certain infant formula products and encouraged infant formula manufacturers worldwide to take advantage of these flexibilities. The announcement may have come too late. The US could have avoided the infant formula crisis if the policymakers withstood pressures from trade protectionism over recent years.

Now, the US is trying to get more formula into the country and onto store shelves. To ensure that manufacturers have the necessary ingredients to make infant formula at home, Biden is invoking the DPA. Although such measures can help ease formula shortage, but the most efficient way will be cut trade protectionism and expand infant formula imports.

Biden has directed the Department of Health and Human Services and US Department of Agriculture to use Department of Defense (DOD) commercial aircraft to pick up overseas infant formula that meets US health and safety standards. Apart from this measure, long-term mechanisms are needed to truly open US infant formula market to global international competitors.

As the US deals with a baby formula shortage, China maintains a balance in supply and demand in its domestic formula market. China has become one of the largest markets for infant formula in the world. Hopefully the US can also join the global competition and solve its formula crisis as soon as possible.

The author is a reporter with the Global Times.