From Ukraine to China, we need to mitigate vulnerabilities

The world is focused these days on an active shooting war in Ukraine, but the overt economic warfare between Moscow and the West merits the attention of everyday Americans. The economic disruptions due to the prohibition of exports of Russian commodities by the U.S. and Russia — petroleum and wheat, respectively — call out for our leaders to reduce the risk to our reliance on global supply chains posed by our strategic competitors, especially Russia and China. From semiconductors used in smartphones and automobiles to the fundamental building blocks of the U.S. food supply chain, Washington policymakers and business leaders must work together to identify and mitigate strategic vulnerabilities, especially in microelectronics and agriculture.

The global share of United States semiconductor manufacturing capacity was 37 percent in 1990 but has fallen to an alarming 12 percent today. Most advanced semiconductors in the world are produced in Taiwan, which is victim of threats of invasion by China eerily reminiscent of Putin’s pronouncements on Ukraine.

Responding to this vulnerability, Congress worked on a bipartisan basis on the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, which will help restore U.S. semiconductor production by increasing federal incentives to stimulate advanced chip manufacturing and bolstering funding for cutting-edge research and development. The CHIPS Act is an example of bipartisan cooperation to address a critical national security vulnerability and is expected to become law this year.

China is also exploiting strategic opportunities to weaken our nation beyond advanced technologies. Beijing continues to pursue concerted incursions into U.S. agriculture that pose tremendous risk to domestic agricultural producers and ultimately Americans at the grocery store. An example of China’s surgical approach to exploiting our vulnerabilities is Beijing’s initiative to corner the market on another small but critical sector of the American food supply chain: amino acids used as nutrients in animal feed.

Amino acids are vital components of how we feed livestock such as poultry and pork. If our production of these ingredients disintegrates, as intended by Beijing, then our poultry and pork producers will become dependent on China for these ingredients. This dumping of cheap products into our market not only violates trade laws but also exposes our pork and poultry supply chain to Chinese influence.

We have a global system of trade rules and remedies which Beijing agreed to when the U.S. supported China’s entry into the WTO. Using illicit trade practices to unfairly gain market share specifically runs afoul of these rules. The temporary benefits of lower prices should lead us to ask questions regarding the longer-term geopolitical and moral consequences of growing Chinese influence in our economy.

One notable example is a Chinese company that produces amino acids setting up shop in the American Midwest. The company’s senior management has reported links to the Chinese Communist Party and its own website does not even attempt to hide the company’s presence in Xinjiang province, where ethnic Uyghurs are held in concentration camps. According to an advisory notice from the U.S. State Department, companies operating in Xinjiang are complicit in human rights abuses. The notice specifically notes that “These abuses include widespread, state-sponsored forced labor and intrusive surveillance, forced population control measures and separation of children from families, mass detention, and other human rights abuses amidst ongoing genocide and crimes against humanity.” 

In other words, why should American producers of amino acids be forced to compete with their Chinese competitors, who may be relying on slave labor? They should not, and this type of action by China — to undermine our domestic supply of amino acids — must be on the radar screen for lawmakers on Capitol Hill, and inside the Biden administration.

Actions taken by both Russia and China have demonstrated acutely the need for serious recalibration of U.S. foreign policy with respect to both nations. We are facing military aggression reminiscent of the Cold War from Russia and unprecedented economic espionage from China. Ultimately, these regimes will collapse under the pressure they apply to their own citizens. Until then, America must secure our vital economic vulnerabilities and remain true to our values.

We must heed the lessons learned in recent weeks and prioritize securing key domestic industries — like microelectronics and agriculture — to ensure that we do not prop up these despotic regimes and undermine the resilience of the American economy.

Gregory T. Kiley is a former senior professional staff member of the Senate Armed Services Committee and U.S. Air Force Officer.