WASHINGTON — The Coalition for a Prosperous America (CPA) today applauded the reintroduction of bipartisan National Critical Capabilities Defense Act by U.S. Representatives Rosa DeLauro (D-CT), Brian Fitzpatrick (R-PA), and Bill Pascrell (D-NJ). This legislation will help prevent American supply chains from being offshored by establishing an outbound investment review, which covers production, development, manufacturing, or fabrication of identified critical national capabilities to countries, like China and Russia, that are deemed foreign adversaries. Importantly, 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, energy, and health security interests where needed.
The bipartisan, independent U.S.-China Economic and Security Review Commission’s 2021 Annual Report to Congress noted that “China has shown willingness to weaponize and politicize supply chains” where “U.S. companies may struggle to avoid critical shortages without domestic…alternatives.” Additionally, the report highlights that “U.S. and foreign investors have poured into China’s capital markets” despite the Chinese government and Communist Party’s strict control over their economy. Among the Commission’s top recommendations is to pass legislation that accomplishes the goals of the National Critical Capabilities Defense Act by creating 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.”
“After the COVID-19 pandemic, Congress and the Biden administration are fully aware of the clear and present risk posed to our nation as a result of America’s supply chain reliance on foreign adversaries and non-market economies,” said Zach Mottl, Chairman of CPA. “As a result of decades of disastrous U.S. trade policy that promoted the offshoring of American manufacturing, the U.S. faces a major vulnerability. Now, more than ever, it is clear that Congress must address our nation’s reliance on imports of materials critical to U.S. national security, from medical supplies to rare earth minerals. To prevent future supply chain issues, we need a whole-of-government process to review the offshoring of critical capacities and supply chains to foreign adversaries and non-market economies.”
Last year, CPA called on Congress to include the bipartisan, bicameral National Critical Capabilities Defense Act in any China competitiveness legislation considered by the House and Senate. Unfortunately, it was not included in the final China bill. Earlier this month, Senate Majority Leader Chuck Schumer (D-NY) announced a new legislative effort to build off the previous China competition bill passed by Congress last year. CPA strongly urges Congress to include the National Critical Capabilities Defense Act in any additional legislation that addresses U.S. competition with China.