Members of Congress want to limit Chinese goods from the defense industrial base. (Kevin Frayer/Getty Images)

WASHINGTON: This year’s National Defense Authorization Act policy bill is almost certain to include amendments forcing the Defense Department to improve its understanding of who sells what parts and equipment to the United States military, with the broad aim of reducing dependence on Chinese sources.

Six suggested amendments to that effect are included in a report released today by the Defense Critical Supply Chain Task Force, a bipartisan group led by House Armed Services Committee members Elissa Slotkin, a Michigan Democrat who previously served as acting assistant Defense Secretary for international security affairs, and Mike Gallagher of Wisconsin, a retired Marine now the top Republican on the HASC military personnel subcommittee.

The report points to basic holes in the US industrial base that became glaringly obvious during the COVID-19 pandemic.

“The COVID-19 pandemic likewise taught the United States and our allies that adversaries, particularly China, are capable of weaponizing supply chain vulnerabilities to threaten our national security should they choose to,” it says.

Rep. Elissa Slotkin

“In the early days of the pandemic, when the Chinese government used its power over nationalized industries to control exports of medicines and raw materials, a technique that can be used to withhold shipments of ingredients for life-saving pharmaceuticals and critical microelectronics to the United States. In the future,” the report notes, “such threats could come, for example, in retaliation for American support for Taiwan, or in concert with aggressive actions in the South China Sea. In short, overreliance on China in critical supply chains, particularly in the defense sector, creates significant strategic and competitive risk for the United States.”

Each of the six recommended amendments to the NDAA try to get at the China issue in a unique way:

  • The first would create “a statutory requirement for a Department-wide risk assessment strategy and system for continuous monitoring, assessing, and mitigating risk in the defense supply chain.”
  • The second would force the Pentagon “to employ commercially available tools to map the defense supply chain within one year of enactment.”
  • The third notes that “a significant amount of material in the Defense Industrial Base is sole-sourced from the People’s Republic of China.”  So this amendment would include “a statutory requirement to identify supplies and materials for major end items that come from adversarial nations and implement a plan to reduce reliance on those nations.”
  • The fourth is harder to summarize. Basically it calls for a national effort to bolster the country’s ability to find and train “skilled workers in the trade and manufacturing industries,” whose numbers have markedly declined. “Without this effort and the resulting increase in manufacturing capability and capacity, resiliency-building in the supply chain will falter,” the report concludes.
  • The fifth amendment recognizes the importance of America’s global network of allies and partners to its industrial base. This one would require using the existing National Technology and Industrial Base (NTIB) “as a test bed for closer international cooperation and supply chain resiliency; and authorizing an NTIB ‘International Council’ to harmonize industrial base and supply chain security policies.”
  • The last amendment would require the Defense Secretary to work with his counterparts at Energy and Interior to ensure America and its allies diversify their access to so-called rare earths. Today, the single greatest source of these is the People’s Republic of China. So, the report says, “developing alternative technologies and methods for extraction, processing, and recycling in support of diversification is critical.”
Office of Rep. Mike Gallagher

Rep. Mike Gallagher.

The report also includes recommendations for the executive branch:

It says US companies should be required “to disclose foreign capital they receive from adversaries.” It also say that the Committee on Foreign Investment (CFIUS), which reviews investments into US firms by foreign companies, should exempt “trusted partners” from CFIUS requirements.

Also, the task force says, “Congress should consider authorizing the Food and Drug Administration to share proprietary data on sourcing of active pharmaceutical ingredients with DOD and the Department of Veterans Affairs to allow for better supply chain risk management.”

Finally, in one of those efforts almost certain to founder in the face of bureaucratic inertia or opposition, the task force says the executive branch “should evaluate the costs and benefits of adjusting the clearance process to remove barriers to entry for smaller companies and consider allowing the federal government to continue to hold an individual’s clearance for five years after their departure from government service to expedite collaboration with trusted industrial partners.”