US Dependance on Chinese Pharma in the Pandemic Era and the Nationalization of the US System

Introduction

The impact of the new coronavirus pandemic has been nothing short of severe for both the economies of the United States and China. Not only has the Covid-19 pandemic brought serious damages to the economies of both countries, but it has also disrupted the livelihoods of millions of people across the world (even more so in countries as severely afflicted by the pandemic as the United States). Regarding how the pandemic impacted the U.S.A., the Congressional Budget Office (C.B.O.) has released in May a report that provided for a summary of the current and expected economic consequences. The C.B.O. reported that between the months of February and April, the unemployment rate went from 3.5% to 14.7% (Congressional Budget Office, 2020). The wild fluctuations caused by the Covid-19 have continued to impact labor markets both in the United States and globally. As a matter of fact, the business sectors that were mostly hit by layoffs were the ones to be the most dependent on human interaction (e.g. hospitality, education, retail, etc.). The severity of the situation can be further seen in how the ongoing pandemic has affected the labor force participation rate. As a matter of fact, in the months between February and April the labor force participation rate went down 3.2%, amounting to 60.2% in April (which is the lowest this rate has ever been since 1948, when the CBO officially started collecting and analyzing data). Such a substantial decrease in labor force participation is the direct result of the pandemic’s ongoing effects on the demand and supply of labor. Consequently, along with unemployment also consumer’s spending fell during the pandemic. Indeed, the C.B.O. reported that consumer spending would decline at an annual rate of 39%, in particular caused by households decreasing their spending as the consequences of the pandemic became more severe. On a different note, the ongoing covid-19 pandemic has also negatively affected the U.S. federal budget. According to a forecast conducted by the C.B.O., for the fiscal year 2020 the federal budget deficit would amount to $3.7 trillion, which constitutes about 17.9% of the U.S. GDP. In addition, the covid-19’s pandemic has severely impacted the U.S. in terms of imports and exports. Indeed, the CBO reported that between the first two quarters of 2020, the imports went from - 4.1% in the first quarter to -16.4% in the second. Likewise, the exports have decreased during the first two quarters of 2020, resulting in a -2.2% decrease in the first quarter and in a -21.2% decrease in the second quarter. To sum up, the CBO reported that as an annual rate in 2020, the exports and imports are expected to amount respectively -8.3% and -11.9% (specifically, these statistics reflect a positive outlook held by the CBO regarding the effects and efficiency of the policies adopted by the U.S. government in order to tackle the pandemic). In a similar manner, China’s economy has also been severely affected by the ongoing pandemic.