Ever since the COVID pandemic started three years ago, we have suffered from disruptions in supply chains for many products used in our daily lives as well as products and components needed for our consumer products, industrial, and defense industries. Why? Because we stopped making things in the USA. We outsourced everything from household goods to high tech products, as well as pharmaceuticals and medical devices. First, it was to friendly countries like the Philippines, Puerto Rico, and Taiwan, and then it became predominantly China after they entered the World Trade Organization in 2001.<\/p>\n\n\n\n
The shortages of semiconductors, has made news headlines for the past two years. Semiconductors are used in everything from consumer products such as cell phones, computers, and TVs as well autos, trucks, airplanes, boats, ships, drones, and space vehicles. There is hardly any product that doesn\u2019t have a semiconductor in it these days, even refrigerators and washing machines. Many other electronic and electro-mechanical components are also no longer made in the USA.<\/p>\n\n\n\n
Our domestic innovation capacity is contingent on a robust and diversified industrial base. Our loss of manufacturing capabilities has led to a loss in innovation capacity. When manufacturing heads offshore, innovation follows. We currently lack the ecosystem of innovation, skills, and production facilities to have the secure and resilient supply chains required for economic security. As a result, we are no longer self-sufficient in producing the products we depend on for our modern way of life. <\/p>\n\n\n\n
Even worse, we are no longer self-sufficient in producing the goods and systems needed to defend our country. Our national security and freedom as an independent country is at risk. This fact was confirmed in the article<\/a> \u201cFrom rockets to shells, Pentagon struggles to feed war machine,\u201d from the March 25th<\/sup> issue of the New York Times which stated, \u201cThe United States lacks the capacity to produce the arms that the nation and its allies need at a time of heightened superpower tensions\u2026Industry consolidation, depleted manufacturing lines and supply chain issues have combined to constrain the production of basic ammunition like artillery shells while also prompting concern about building adequate reserves of more sophisticated weapons including missiles, air defense systems and counter-artillery radar\u2026illustrated by the shortage of solid rocket motors needed to power a broad range of precision missile systems, such as the ship-launched SM-6 missiles made by Raytheon\u2026Other shortages slowing production include simple items such as ball bearings, a key component of certain missile guidance systems, and steel castings, used in making engines.\u201d<\/p>\n\n\n\n There are two main ways that government can help rebuild the domestic manufacturing base: penalize offshoring to other countries and incentivize American manufacturers to make is here or reshore their manufacturing to the USA. The Biden Administration and Congress have reacted to this supply chain crisis within the last year by passing the following legislation:<\/p>\n\n\n\n CHIPS and Science Act of 2022 to<\/a> \u201cboost American semiconductor research, development, and production, ensuring U.S. leadership in the technology that forms the foundation of everything from automobiles to household appliances to defense systems.\u201d<\/p>\n\n\n\n Amendment<\/a> to The Federal Acquisition Regulation (FAR) Buy American Act \u2013 \u201cThis rule increases the domestic content threshold initially from 55 percent to 60 percent, then to 65 percent in calendar year 2024 and to 75 percent in calendar year 2029.\u201d<\/p>\n\n\n\n Uyghur Forced Labor Prevention Act<\/a> \u2013 This Act changes U.S. policy to establish \u201ca rebuttable presumption that the importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People\u2019s Republic of China.\u201d Previous law required companies to take reasonable care to avoid products produced with forced labor. This Act requires companies to prove that products from Xinjiang province were not produced with forced labor.<\/p>\n\n\n\n While these new laws and amendments to previous laws will help ease future supply chain disruptions, the real solution to the supply chain crisis is to change the financial calculations to enable making as much as possible in the United States. The Reshoring Initiative has been working towards this goal since its founding in 2010 by promoting the use of the Total Cost of Ownership Estimator\u00ae<\/a> developed by Harry Moser<\/p>\n\n\n\n