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The US needs to rebuild the defense industrial base

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This month the Pentagon finally released a long-awaited report on the health of the nation’s defense industrial base. The findings were startling. Once the nation’s strength – in fact a war winner – our defense industrial base now faces an “unprecedented set of challenges.”

The report is a clear sign we need to act urgently. Just when we should be retooling for renewed great power competition, the very foundation from which we project strength is crumbling.

{mosads}While the report identified five major challenges to our defense industrial base, all in need of dedicated attention, one challenge in particular – the aggressive industrial policies of competitor nations, particularly China – should cause heightened alarm. Many of the hurdles we face to rebuilding our industrial base and supply chains are self-imposed – sequestration and ongoing budget uncertainty are prime examples – but the challenge posed by our growing dependence on competitors, or nations that could become adversaries, for critical materials will take a multi-faceted approach to reverse.

From specialized metals and alloys to printed circuit boards, our dependence on imports for materials and components with such essential applications across multiple Department of Defense programs and defense sectors can’t be allowed to deepen. For all of the value and efficiency of a laissez faire market-first approach to resource acquisition and industrial production, our non-market state-owned enterprise competitors game the system to our loss. While we rely on the market and competition and innovation to sharpen our manufacturing sector and ensure access to key materials, American companies must compete in global markets against Chinese state-owned competitors that have the full weight of government support at their backs – competitors that are happy to trade profit for market share. The threat of China’s strategy isn’t new, but the results of China’s now decades-long planning and execution is.

One case study in the Pentagon’s report on the materials sector pulls no punches: “China represents a significant and growing risk to the supply of materials deemed strategic and critical to U.S. national security.” Our shocking import dependence on minerals and metals is merely a microcosm of the problem.

Despite our own vast reserves of minerals and metals, the U.S. is now 50 percent or more reliant on imports of 50 nonfuel mineral commodities and fully 100 percent reliant on imports for 21 of those minerals. As recently as 1978, the U.S. was 100 percent import reliant on just seven minerals.

A troubling number of these minerals are dominated by domestic Chinese production or by Chinese companies operating around the globe. Take our 100 percent import reliance on rare earth minerals. China has monopolized the production of these 17 minerals, which are in a dizzying array of military hardware. From F-22 and F-35 aircraft to guidance and targeting systems, these minerals are essential to most of our advanced weapons systems. That we have allowed to China to dominate their production and processing defies comprehension.

The obvious question is, what can be done? We must first begin with taking a comprehensive approach to U.S. competitiveness. Challenging unfair trade practices should be part of that approach but reducing our self-imposed barriers to competitiveness must be part of the equation as well. Our redundant, broken mine permitting process is a case in point. 

It often takes a decade or more to gain the permits needed to open a new mine in the U.S. In a competitive global market, those kinds of delays and self-imposed barriers to investment are simply unacceptable. Despite having environmental protections comparable to our own, mine permitting in Australia and Canada takes just two to three years. It’s no wonder, despite our vast mineral resources, that mining companies increasingly look elsewhere to invest in new production. We can – and must – do better.

Under consideration for inclusion in this year’s National Defense Authorization Act was an amendment that would have brought desperately needed mine permitting reform. It was dropped in the 11th hour but as the Pentagon’s new report makes clear, access to raw materials is an important defense issue that we can’t afford to ignore.

Rebuilding our defense industrial base is finally being given the attention it deserves. How effectively we act remains to be seen. However, the systemic challenges highlighted in the just-released report can no longer go unaddressed. A concerted effort from the executive branch, Congress and the Department of Defense is needed to undo years of damage caused by decades of complacency. We must urgently address our astonishing and growing import dependence on the raw materials that are the building blocks for our most important defense systems.

Retired U.S. Army Brig. Gen. John Adams served more than 30 years in command and staff assignments as an Army aviator, military intelligence officer and foreign area officer in Europe, Asia, the Middle East and Africa. He is president of Guardian Six Consulting.


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