Why “Buy American” Is Not The Answer To Protect National Security Supply Chains – Breaking Defense Breaking Defense

President Joe Biden holds a semiconductor during his remarks before signing an Executive Order on the Economy in the State Dining Room of the White House February 24, 2021 in Washington, DC. (Photo by Doug Mills / Pool / Getty Images)

The last two US presidents may not share much political common ground, but their response to the US reliance on an increasingly delicate global supply chain has been the same. : move manufacturing to the United States and “Buy American”. But below, John Ferrari of the American Enterprise Institute explains that this policy is not the best for America, let alone the rest of the world.

With their determination to produce the supply chain “ashore”, Biden officials are following the same path as former President Donald Trump. To the credit of both administrations, from an economic and national security standpoint, they are absolutely right to identify the problem – that critical US supply chains are vulnerable to sabotage from rivals.

But the two presidents got the wrong solution. The answer is not “Buy American”, it is “Attract allies” by supporting production in partner countries and buying from them. Do not hide from the global economy of national security, diversify it.

Currently, China, through its grip on the electronics industry in particular and its threat from Taiwan, has the capacity to sabotage and potentially destroy our economy, weapon systems, and critical IT infrastructure. This gives Chinese President Xi Jinping a huge advantage over the United States, similar to how Russian President Vladimir Putin subverts Europeans over energy.

While COVID has highlighted the fragility of US supply chains, we are a long way from what could happen during increased tensions or hostilities with China. Imagine a scenario with no chips from Taiwan and no ships crossing the Pacific. In the face of this threat, we must reduce our dependence on China in particular and the Pacific in general.

But the instinct to simply do everything in the United States, confirmed in Trump and Biden’s “Buy American” plans, is extremely flawed despite good polls and electoral popularity.

To find a different answer, we must recognize several facts: Our military is today a small player in the commercial market, both nationally and globally. The Defense Ministry simply will not be able to dictate a solution on its own.

Second, the direct military and economic support of our allies, as we fight Chinese coercion, even war, is essential. Therefore, we need to “pool” our defense purchasing power when purchasing common parts, information technology and weapon systems. It’s not just for interoperability, but also for efficiency at scale.

Moreover, we cannot and must not create protectionist barriers to keep China away if those barriers also erect a wall between us and our allies or potential allies. The worst thing we can do is send a signal that it’s ‘every country for itself’.

The solution? The Biden administration should change its goals and messages from “Buy American” to “Attract Allies” even though that could be politically toxic. A new cold war is upon us, and we must admit that COVID has demonstrated that we are already vulnerable to being held hostage.

Take the semiconductor market for example. At present, all roads lead to China and Taiwan. The current plan is to subsidize the production of new factories in the United States. What we really need is to diversify the production of these critical chips away from the first island chain in East Asia and to anchor production in the United States, Europe, Australia and India. .

The U.S. military, along with Allied military forces, could then set standards to strengthen and secure the chips themselves, to improve cybersecurity, while also diversifying production facilities so that we don’t present China with a single targeting challenge. Western military grants could fund boosting chip cybersecurity, while national governments could subsidize production at several factories around the world, similar to the US’s current plan to allocate $ 50 billion. at chip production facilities.

As every nation takes on debt to pay for the COVID pandemic, our military allies, not to mention our own forces, are already constrained by a lack of resources. We must create purchasing cooperatives with our allies to achieve economies of scale in production and, through interdependencies with friendly nations, to gain in efficiency, efficiency and safety.

At a recent Association of the United States Army conference, many small defense companies from other countries shared the convention hall with global defense giants. It was a good reminder that the giants could afford the cost of selling their products to dozens of national bureaucracies, while small businesses couldn’t.

Imagine the benefits of having one military procurement standard and one procurement process without any special “Follow this ‘Insert country name’” rule. In contrast, today in the United States, the administration’s provisions in “Buy American” would force these small international companies to either move production or partner with local companies, both of which are extremely inefficient.

Interoperability between Allied forces in wartime is also crucial. An “everyone’s” approach to provisioning is detrimental on the battlefield from a resupply perspective, and even more critical when it comes to sharing data between weapon systems. During the Cold War, NATO applied its resupply and ammunition standards. Today, this process has disappeared in Europe and is lacking in the Pacific. “Buy American” will only make this problem worse.

Protectionism carries the danger of reciprocity, and it is likely that no nation will want to take the first step. President Biden’s deal with like-minded nations on global corporate taxes gives hope that global cooperation is possible.

Therefore, the administration should act swiftly now to establish a defense and economic security alliance, abandon “Buy American” rhetoric and promote an “Attract Allies” security policy.

U.S. Army Major General John Ferrari (retired), a nonresident senior researcher at the American Enterprise Institute (AEI), is a former director of program analysis and evaluation at the US Army.

About Aldrich Stanley

Aldrich Stanley

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