The U.S. spending plan faces a big problem: Beijing got to all the raw materials first.
Fresh from passing a $1.9 trillion stimulus bill, U.S. President Joe Biden on Wednesday turned his attention to a similarly vast package of investment in infrastructure, and that means the U.S. is going to need more commodities. There’s just one problem: China.
America requires steel, cement, and tarmacadam for roads and bridges, and cobalt, lithium, and rare earths for batteries. Above all, it needs copper—and lots of it.
Copper will go into the electric vehicles that President Biden has said he’ll buy for the government fleet, in the charging stations to power them, and in the cables connecting new wind turbines and solar farms to the grid.
But when it comes to these commodities—and copper in particular—Washington is one step behind Beijing. China was the first place the coronavirus struck, but it was also the first country in the world to start recovering from the pandemic.
As the rest of the world went into lockdown and commodity prices plunged in March and April 2020, China went on a buying spree. Chinese manufacturers, traders, and even the government approached the global commodity markets much as a shopaholic might approach a fire sale.