SC Connecticut News

Legislation would safeguard critical supply chains from foreign adversaries like China and Russia

On May 9, U.S. Representatives Rosa DeLauro (CT-03), Brian Fitzpatrick (PA-01), and Bill Pascrell (NJ-09) reintroduced the bipartisan National Critical Capabilities Defense Act, legislation that would establish a review process over the potential offshoring of critical United States’ supply chains to foreign adversaries like China and Russia. This legislation would create a whole-of-government screening process for outbound investments to ensure that the United States can quickly detect supply chain vulnerabilities and protect national, economic and health security interests where needed.

“The last few years have exposed critical vulnerabilities in the United States supply chains, spotlighting how our overdependence on foreign manufacturing has hampered our ability to quickly respond to supply chain challenges and meet the needs of America and its citizens,” said DeLauro. “Americans are hurt when we depend on foreign adversaries for essential goods— from technology, critical minerals, and ingredients for our lifesaving and life-sustaining drugs. We have seen the dangerous cost of relying on foreign adversaries for items that are critical to our national, economic, and health security. We must know of and be able to prevent the offshoring of supply chains so that the U.S. can better defend manufacturing capacity and protect jobs here at home.   China has shown its willingness to weaponize supply chains, we must eliminate critical vulnerabilities.”

“Relying on foreign adversaries for essential goods is a threat to our national security,” said Congressman Fitzpatrick. “The bipartisan National Critical Capabilities Defense Act (NCCDA) will boost American innovation, increase transparency around offshore critical industries, and protect supply chain manufacturing here at home. I am proud to support this important legislation.”

“While we have made important progress, America’s continued bleeding of industrial capacity represents a dangerous national security threat,” said Congressman Pascrell. “This watershed, bipartisan, legislation will take a major step to review investments in supply chains and critical industries being offshored to our adversaries. The Chinese Communist Party climbed America’s back to economic power and is now using that power to commit genocide, crush democratic norms, empower dictators, undermine workers, rig the world economy, and threaten America’s allies. Putin’s Russia has also leached off America to sow discord in the world. It is time to enhance supply chain visibility and prevent transactions in certain sectors to ensure we are undermining American competitiveness and our national security. Our proposal builds on the work we achieved last Congress and is an important step for innovation and competition.”

“The National Critical Capabilities Defense Act is common sense legislation that puts the needs of America’s working families first,” said AFL-CIO President Liz Shuler. “This bill will improve our nation’s ability to compete on the world stage, safeguard and strengthen our domestic supply chains, and bolster our manufacturing and technological capabilities. It also will protect workers by holding U.S. corporations accountable for offshoring family-sustaining jobs to China and other countries whose conduct undermines America’s economic and national security interests. We call on Congress to prioritize passage of this bipartisan bill.”

Specifically, the bill would:

Create a committee to oversee outsourcing of our supply chains. The National Critical Capabilities Committee (NCCC) will be composed of representatives from a broad range of federal agencies, led by the Executive Office of the President, and include leaders from the Department of Commerce, Department of the Treasury, Department of Homeland Security, Department of Defense, and Department of Labor. United States firms operating in critical industries would be required to report outbound investments to certain foreign markets and nonmarket economies.

Empowers executive action to protect critical supply chains and national security. The NCCC would have the ability to review and recommend the President take remedial action when needed to guard against supply chain outsourcing that includes but is not limited to supporting domestic industry by increasing research and developing investment and utilization of manufacturing institutes. The NCCC could also recommend mitigating or halting outbound investments outright should they pose a risk to national security.

Sectors Covered include: Semiconductors, Artificial Intelligence (AI), Quantum Computing, Large capacity batteries, Critical minerals and materials, Active Pharmaceutical Ingredients (API) and Automobile manufacturing.

Supply chains expected to be reviewed by the NCCC. Factors that should be considered when reviewing supply chains are the long-term strategic economic, national security, health security, and crisis preparedness interests of the United States, the target country’s history of distortive or predatory trade practices, the ownership structure of the parties involved, and the impact to domestic industry resilience. Additionally, the legislation would establish a rulemaking process to add relevant industries covered under national critical capabilities systems, services, and assets within the NCCC’s purview.

Based on recommendations from the U.S.-China Economic and Security Review Commission. Included in the Commission’s topten recommendations is consideration of legislation that “creates the authority to screen the offshoring of critical supply chains and production capabilities to the People’s Republic of China to protect U.S. national and economic security interests.” This recommendation closely aligns with our legislation to protect vulnerabilities in our supply chains as private industries continue to offshore critical capabilities to China and other competitor economies.

“This is about protecting American workers and safeguarding our national, economic, and health security,” DeLauro continued. “I am encouraged by the Biden Administration’s ongoing work to take executive action on outbound investment, and I continue to believe that statutory provisions-- the NCCDA—should buttress their efforts. We passed the NCCDA in the House through the COMPETES bill—the proposal put forward today builds on our work from last Congress and charts the path ahead. We must act now, because every day that we wait, we become more dependent on China and the Chinese Communist Party (CCP).”

The National Critical Capabilities Defense Act is endorsed by the AFL-CIO and United Steelworkers (USW). You can find bill text here.

Issues:Jobs and the Economy

Original source can be found here.