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Weekend Reads
China’s control over rare earths and other processing chokepoints reflects a deliberate, long-term supply chain strategy that poses severe risks to the United States’ economic and national security.
Nadia Schadlow and Patrick M. Cronin hosted an expert panel to debate the role of international relationships in rebuilding American manufacturing and examine how tools like the Defense Production Act (DPA) can help secure US economic leadership. Key insights are below.
Watch the event, listen to the podcast, or read the transcript here.
Key Insights
1. Cooperation with allies could be important to rebuilding American manufacturing.
“If it’s true that a Chinese auto plant can work with just a handful of the factory workers that it would’ve required 10 years ago, why can’t America manufacture? We don’t have the tacit knowledge, we don’t know how. Where’s that going to come from? Again, our allies and partners, they know how. You want to build cars? Talk to Japan and Korea. You want to build ships? Talk to Japan and Korea. You want to build chips? Talk to Taiwan. You want to build medicine? Well, Europeans produce it at scale. Europeans, Indians, Japanese, Koreans, that’s your path.”
— Rush Doshi, Director, Council on Foreign Relations China Strategy Initiative
2. The US needs greater international buy-in to overcome China’s dangerous manufacturing dominance.
“We have the innovation here. We have the high-tech here. The problems are adoption and scale. . . . And while I appreciate that America has to lead in many of these areas, our agency is also limited in many, many ways. And other countries need to come to the table with their own sense of shared responsibility and their own sense that these problems matter to them too. And it’s not going to be just President Trump saying, ‘You need to do this or else.’ It’s also a recognition that their societies, the way they want to create and order their societies and live their lives, are at stake too.”
— Nadia Schadlow, Senior Fellow, Hudson Institute
3. Washington can use tools like the DPA to spur innovation.
“The Defense Production Act allows four powerful instruments: loans, loan guarantees, purchases, and purchase commitments. Do you know how often those are used? Virtually never. . . . And yet purchase commitments are critical. If you talk to anyone out there in this space, young companies, the go-getters, the innovators, they often say, ‘We don’t need the government’s help. We just need them to buy the products that they promised they would buy.’”
— Nadia Schadlow, Senior Fellow, Hudson Institute
Quotes may be edited for clarity and length.
Go Deeper
In a Hudson policy memo, Nadia Schadlow explains how the Trump administration can reboot the DPA to respond to China’s alarming military buildup and manufacturing dominance.
Tom Duesterberg explains how President Donald Trump can build a new trade system that serves America and the free world—at China’s expense.
William Chou lays out the bureaucratic means Beijing has used to create and maintain its near-monopoly on critical minerals and offers a strategy to overcome it.
