Opinion: Here's what US Congress must do to protect the automotive supply chain
As two of the authors and most outspoken champions of the CHIPS and Science Act and members of Congress who represent America’s tech and automotive hubs, our districts felt the semiconductor chip shortage first. We saw plants shut down in Detroit, and parking lots across Michigan full of vehicles that could not be sold. Silicon Valley tech giants faced significant backlogs of personal electronic orders waiting to be filled, unable to meet surging pandemic-fueled consumer demand.
Before Americans heard the term “semiconductor chip” regularly on cable news, read about them in their local papers, or heard President Joe Biden speak about this crisis in his State of the Union address, we were sounding the alarm.
Make no mistake, the CHIPS and Science Act was a historic legislative achievement, and its positive effects will be felt for years to come. With the help of Congress, the Biden Administration has revitalized this industry by investing in the critical technologies that will power our future. High-paying manufacturing and technology jobs will return to America, where the semiconductor chip was innovated.
On Feb. 28, the newly formed bipartisan Select Committee on Strategic Competition with the Chinese Communist Party (CCP), of which we are both members, held its first hearing. The exploitative and predatory policies of the CCP have contributed significantly to the deindustrialization of the United States. Between 1985 and 2000, the U.S. trade deficit with China grew steadily from $6 billion to $83 billion. That deficit ballooned dramatically after China joined the WTO in 2001; it now stands at a stratospheric $309 billion.
The United States must restore production in the key industries where we have lost ground to the CCP. China currently has 76% of the world’s lithium battery production capacity and controls 60% of rare-earth metals needed for building, wind turbines, solar energy and most critically, electric vehicles. These are the industries of the future, and the long-term health of our planet depends upon their swift adoption.
In 1970, U.S. steel made up 20% of global production; today, that figure is down to just 4%. The U.S. is now the 20th-largest steel exporter in the world but the second-largest steel importer. Aluminum is another example of this worrying trend. In 1980, the United States was the world’s top producer of this commodity. Now, the U.S. is ranked number nine in global aluminum production. This leaves us weakened on the global stage and vulnerable to supply chain disruptions. China currently uses coal plants, which they built at a rate of two per week last year, for aluminum production. In fact, the total emissions from aluminum production in China was found to be more than all the 2020 greenhouse gas emissions from Indonesia, the world’s 8th largest emitter. This hurts American workers, and our planet.
These statistics are unacceptable and must serve as a wake-up call.
So what should Congress do? We must get in front of supply chain, material, and critical mineral needs now. We should strategically utilize the National Defense Stockpile to scale up our store of rare-earth minerals in the event that U.S. supply chains are disrupted. Over the last 70 years, the value of this stockpile has fallen from $42 billion (inflation adjusted) in 1952 to $888 million in 2021. Congress should at least double the value of the stockpile and purchase domestically sourced rare-earth materials. Instead of waiting for the next chips crisis, legislators need to prioritize industrial policy for the 21st century. This depends on harnessing public-private partnerships and crafting trade deals that put American workers first. When Congress appropriated $52 billion federal dollars through the CHIPS and Science Act, $210 billion dollars in investments from private entities followed. The federal government should not subside industry, but strategic, large scale investments have given America the ability to compete on a global scale in unprecedented ways.
As Lieutenant General H.R. McMaster wisely said in our first hearing, we must have “peace through power.” Competing with the CCP means adopting a whole-of-government approach and harnessing the power of public-private partnerships to once again make America a manufacturing superpower. Waiting to legislate until our country is facing catastrophe is not acting from a position of strength. We cannot wait for action until the next economic crisis rears its head. Our economic and national security depends upon it.