Source: Blog – Alliance for American Manufacturing
The ports of Los Angeles and Long Beach in California. Getty Images
The SHIELD Act comes in response to a key recommendation the U.S.-China Economic and Security Review Commission.
Supply chain disruptions are easing. That’s the takeaway from a recent survey of large companies – firms with annual revenues from $500 million to $50 billion – that said their losses attributed to such problems halved in 2022 as compared to the previous year.
It is not time to relax, however. Losses are still significant. And the measure of a healthy supply chain shouldn’t simply be by its cost, anyway; it should be in its security. Supply chains that stretch oceans will still be at risk during the next crisis, be it an international conflict or another once-in-a-hundred-years pandemic.
The measure of a healthy supply chain isn’t simply by its cost but also its resiliency. And this is doubly true when many U.S. supply chains lead directly to a country with which it has an enormous and fraught trade relationship: China.
U.S. Representatives Rosa DeLauro (D-Conn.) and Jim Banks (R-Ind.) have introduced legislation to create an office to do something about the resilience of American supply chains. The SHIELD Act would direct the president to establish in the executive branch of the U.S. government an Office of Economic and Security Preparedness and Resilience, which would monitor, coordinate and set priorities to support supply chains and domestic production for materials deemed crucial for national security in the context of the U.S. rivalry with China.
This office would have a lot of responsibilities. Among them notably would be creating an office within itself, a “supply chain mapping unit” to continuously analyze and monitor the production of four specific product groups: semiconductors; rare-earth elements; pharmaceuticals and their ingredients; and castings and forgings. They paint a picture of what the government deems crucial to national security.
DeLauro and Banks’ proposal hews closely to a recommendation made by the U.S.-China Economic and Security Review Commission’s 2022 report to Congress, which called for such an office.
How important did the commission deem it? Well, its report made almost 40 recommendations to the government, then broke out 10 it called the most important. Creating an office to get a holistic understanding of critical supply chains in and leading into the United States was No. 2.
“There is no reason we should depend on foreign adversaries for essential goods, from technology, to critical minerals, to ingredients for our lifesaving drugs,” said DeLauro in a press release.
“As the COVID-19 pandemic made horribly clear, America’s reliance on China for making basic things like medicine and critical minerals is a huge liability,” Banks added. “Our bill would shine a light on where other such vulnerabilities exist and help revitalize our industrial base to fix them.”
It’s important that this is done right, and a public office dedicated to this work is a very good step in seeing that accomplished.
Why? Because it takes a long time to secure a supply chain for items like these, and to see them produced domestically takes serious investment and attention. To talk out an allegory that’s been unfortunately on my mind as of late: The Chicago Bears – 0-3 on the young season and sinking fast – have been trying to field a good football team by developing talent and identifying and signing useful free agents for decades. But the people in charge are not coordinated. It appears no one knows what’s going on! Ever! Every season seems like it’s always a complete free for all. We haven’t beaten the hated Packers in like six years or something, not even once. And by it all we have been brought low.
The current Bears have a relatively new manager and coach but, even at this early stage, neither looks like they’re gonna cut it. It will likely take years to build Chicago into a playoff team and that’s if it get the management and coaching hires right.
Yes sir, the fun never stops when you root for the Bears.
Suffice it to say: The U.S. should let the supply chains for critical materials be managed like the Chicago Bears are run. Congratulations to Delauro and Banks for introducing this bipartisan legislation; the Alliance for American Manufacturing (AAM) supports the SHIELD Act.
AAM President Scott Paul said:
“Recent supply chain disruptions have made clear that the United States must act to shore up critical manufacturing supply chains and reduce our reliance on China to safeguard our security. We should no longer question whether China will weaponize its supply chains and our reliance upon them to its advantage. The (Chinese Communist Party) has already demonstrated an ability and willingness to do just that. The creation of this office to set supply chain priorities and boost domestic production in key sectors is an important step to further strengthen American Manufacturing.”
You can find the full text of the SHIELD Act here.
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