AAM President Scott Paul Offers Solutions to the Supply Chain Crisis in Testimony Before the Senate Finance Committee

It’s time to break the cycle that rewards offshoring of domestic manufacturing and build a more resilient nation, Paul tells senators.

WASHINGTON, D.C.— Alliance for American Manufacturing President Scott Paul testified before the Senate Finance Subcommittee on International Trade, Customs, and Global Competitiveness on Wednesday, warning that America’s dependence on global supply chains “has left us dangerously exposed” and calling on Members of Congress to “break the vicious cycle of implementing policies that reward imports over domestic production.”

The United States has faced multiple crises in the past several years, including the COVID-19 pandemic and its related economic fallout. But many of our problems were exacerbated by “years of flawed tax, trade, procurement, and other economic policies have put the United States in a perilous position of over dependence on imports,” Paul testified.

Paul noted:

“The frailty of on-demand global supply chains and our utter reliance on them has left us dangerously exposed during an international health emergency and unprepared for future shocks. These disruptions should be viewed through the lens of years of public policy decisions that both facilitated, and in some cases actively encouraged, the offshoring of domestic production and critical supply chains. … Our vulnerabilities reflect an outdated notion of the benefits of hyper-globalization, where our consumers, workers, domestic businesses, and our national security suffer.”

Specifically, Paul called on Congress to pass the Bipartisan Innovation Act, also noting the final version of the bill should include:

  • Additional trade enforcement tools via the Leveling the Playing Field 2.0 Act that was passed by the House;
  • Stronger investments in U.S. industries, including through passage of the CHIPS Act;
  • Inclusion of the supply chain resiliency fund passed by the House, with preference given to goods that are Made in America;
  • Passage of the National Critical Capabilities Defense Act, which would create an outbound investment review process to avert the offshoring of critical production capacity to foreign adversaries;
  • Reforms to the de minimis threshold, ensuring that online retailers don’t exploit a loophole that allows them to bypass tariffs when importing products into the United States.

Additional policy priorities must include enforcing domestic procurement preferences, including the Build America, Buy America Act that is part of the infrastructure law being implemented across the country. Policymakers also must work to maintain strong trade enforcement so that American manufacturers “have the confidence that they will not be wiped out by a surge of subsidized imports from foreign state-owned enterprises seeking to capture our markets,” Paul said.

Congress should also reject the Senate’s Section 301 provision that invites more Chinese imports by tampering with the U.S. Trade Representative’s fact-based process, Paul said.

It’s not enough to merely assemble products here, Paul noted. We must aim to strengthen all stages of manufacturing throughout the United States, Paul said:

“Too often our policies overlook the components, parts, and upstream raw materials fundamentally necessary to produce a given product. In a future emergency, relying only on end products that are assembled or manufactured in the United States from all or mostly imported products is not a solution to the problems that have plagued our economy over the past several years.”

The United States is at a crossroads, Paul testified, with “a once-in-a-generation opportunity” to rebuild domestic production and bring critical supply chains home, for everything from semiconductors to face masks to batteries to solar panels. Now it’s time to get to work.

“Rebuilding supply chains will chart a course for a stronger future and create millions of new, well-paid jobs along the way,” Paul said. “It’s time to put an industrial policy in place to supercharge domestic manufacturing and grow supply chains.”

You can find Scott Paul’s full testimony here.