With the release of President Biden’s National Security Strategy, the verdict is in: Both Republicans and Democrats in Washington have acknowledged the new era of great power competition with China and Russia as the animating premise of U.S. national security. What is more, both Presidents Biden and Trump explicitly enumerated the connection between economic and national security in their key strategy documents, bringing back a central pillar of American statecraft that had atrophied in the post-Cold War era.
With the supply chain vulnerabilities highlighted by COVID-19 still fresh, now is the political, economic and geostrategic moment to embark on a serious effort to safeguard the U.S. defense industrial base.
Trump often spoke of his “two simple rules”: buy American, hire American. Such policies have a long tradition in the United States, dating back to Alexander Hamilton’s vision of American manufacturing power facilitating military and diplomatic strength. While often maligned by some in the Washington establishment, “Buy American” policies reflect the strategic reality that, in an era of great power competition and the prospect of conventional warfare on an industrial scale, the United States must maintain key capabilities domestically. This is not a domestic political calculation; it reflects the 21st century’s geostrategic reality and the end of the post-Cold War “holiday from history.”
Fortunately, there is growing bipartisan support for sensible Buy American policies. President Biden’s Executive Order on “Ensuring the Future is Made in All of America by All of America’s Workers” built upon successive Trump administration efforts to both expand Buy American preferences, tighten the waiver process, and link such preferences with the defense and manufacturing industrial base and its larger needs. Specifically, Trump’s Executive Order 13806, “Assessing and Strengthening the Defense and Manufacturing Industrial Base and Supply Chain Resiliency of the United States,” sought to address gaps in the industrial base and attendant supply chains through holistic recommendations, including additional Buy American incentives.
There is also bipartisan support for specialty provisions such as the Jones Act and Cargo Preference Act for the maritime industry or the Berry Amendment for domestic textile manufacturing.
Nothing has been more focusing for policymakers than the Chinese Communist Party’s unprecedented military buildup over the past decade. The People’s Liberation Army Navy now numbers nearly 700 active warships and auxiliaries, with ambitions to extend its influence regionally and globally. The threat to Taiwan is growing, and the U.S. Navy is failing to keep pace with China’s maritime ambitions. Not only is the number of active Navy ships insufficient for both our global role and the Chinese pacing threat, the industrial base needed to rectify this challenge has diminished drastically. Urgent action is required to stanch the bleeding.
To truly strengthen our shipbuilding industrial base and meet the China threat, Congress must reimagine existing Buy American provisions. Since most shipbuilding components are procured directly by private shipyards, not directly by the government, Buy American requirements exclude some of the most sensitive and critical naval components. Domestic content requirements for ship construction often can be met simply by building the hull with U.S. labor and U.S. steel, leaving numerous important industrial components excluded and sourced from abroad.
Even with stricter enforcement, per the Biden and Trump administration executive orders, there is little the existing framework can accomplish to truly strengthen our shipbuilding industrial base for the great power competition era.
Section 818 of H.R. 7900, the House-passed fiscal year 2023 National Defense Authorization Act, requires critical propulsion system components for Navy ships to be procured within the National Technology and Industrial Base (NTIB). The purpose of the NTIB is to support the national security objectives of the United States by ensuring procurement of critical materials and components either domestically or from our most trusted international partners. Thus, Section 818 strikes a balance between the globalized procurement market and Buy American requirements. In the final analysis, though, Section 818 is an important step forward in hardening the industrial base for the challenge posed by a major maritime competitor.
In Senate NDAA deliberations, this provision will be critical in demonstrating Washington’s commitment to a robust and resilient industrial base capable of meeting our most serious national security threat. While there remains much to be done to strengthen American industry for the challenges ahead and to build upon the new bipartisan consensus for commonsense domestic sourcing, Section 818 is a good start.
Alexander B. Gray served as special assistant to the president for the defense industrial base (2017-18) and deputy assistant to the president and chief of staff of the National Security Council (2019-21). He is managing partner of American Global Strategies LLC, an international consultancy. Follow him on Twitter @AlexGrayForOK.