Bipartisan Bill Aims to Stop the Offshoring of Manufacturing Critical to National Security

By Elizabeth Brotherton-Bunch
May 12 2023 |
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The National Critical Capabilities Defense Act would establish a review process for the potential offshoring of supply chains to rivals like Russia and China.

The COVID-19 pandemic and supply chain shortages that followed exposed just how vulnerable the offshoring of critical manufacturing had left the United States. One of the most frustrating things about those crises was that United States itself was to blame, as we willingly offshored so much production critical to our national security, and a whole lot of it to our chief geopolitical rival.

Now bipartisan Members of Congress are working to ensure that the United States stops making the same old stupid mistake.

Reps. Rosa DeLauro (D-Conn.), Brian Fitzpatrick (R-Pa.), and Bill Pascrell (D-N.J.) reintroduced the National Critical Capabilities Defense Act on Tuesday, legislation that would create a review process over the potential offshoring of critical production to countries like China and Russia.

The bill would create a new federal committee to oversee potential outsourcing of U.S. supply chains, and American companies operating in critical industries would be required to report any planned outbound investments in foreign and nonmarket economies. In addition, that committee would have the power to recommend the president “take remedial action when needed to guard against supply chain outsourcing.”

The committee would consider a number of factors in the review and recommendation process, including the “long-term strategic, economic, national security, health security, and crisis preparedness interests of the United States, the target country’s history of distortive or predatory trade practices, the ownership structure of the parties involved, and the impact to domestic industry resilience,” according to a news release from DeLauro.

Sectors included in the review process would include semiconductors, artificial intelligence, quantum computing, large capacity batteries, critical minerals and materials, active pharmaceutical ingredients, and automobile manufacturing.

Said DeLauro:

“Americans are hurt when we depend on foreign adversaries for essential goods— from technology, critical minerals, and ingredients for our lifesaving and life-sustaining drugs. We have seen the dangerous cost of relying on foreign adversaries for items that are critical to our national, economic, and health security. We must know of and be able to prevent the offshoring of supply chains so that the U.S. can better defend manufacturing capacity and protect jobs here at home.   China has shown its willingness to weaponize supply chains, we must eliminate critical vulnerabilities.”

Added Pascrell:

“The Chinese Communist Party climbed America’s back to economic power and is now using that power to commit genocide, crush democratic norms, empower dictators, undermine workers, rig the world economy, and threaten America’s allies. Putin’s Russia has also leached off America to sow discord in the world. It is time to enhance supply chain visibility and prevent transactions in certain sectors to ensure we are undermining American competitiveness and our national security.” 

And Fitzpatrick put it bluntly:

“Relying on foreign adversaries for essential goods is a threat to our national security.”

Fitzpatrick is right. Indeed, the Members note that the legislation is one of the top 10 recommendations from the U.S.-China Economic and Security Review Commission, a nonpartisan panel established by Congress to monitor and issue recommendations on the national security implications of the trade and economic relationship between the United States and China.

The bill also has the backing of the United Steelworkers and AFL-CIO, two labor unions whose members know first hand the devastating impact that offshoring can have on jobs and communities.

There’s no doubt that the United States has spent much of the past two decades giving its technology and industrial capabilities away to China, all in pursuit of corporate profits. We are weaker as a nation because of it, and it’s time to put some procedures in place to ensure that American innovation is Made in America, too.

Read the full bill here.