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Pentagon poised to report on US military’s dependence on China and other foreign suppliers

A review aiming to lessen the military’s reliance on foreign suppliers will pay special attention to Chinese firms

PUBLISHED : Wednesday, 03 October, 2018, 4:58am
UPDATED : Wednesday, 03 October, 2018, 10:08pm

A Pentagon-led review ordered has identified hundreds of instances in which the US military depends on foreign countries, especially China, for critical materials, US officials said.

The study, ordered by US President Donald Trump and expected to be released in the coming weeks, aims to lessen the US military’s reliance on foreign countries and strengthen US industry.

Among the study’s conclusions, the officials said on condition of anonymity, will be a determination that the United States is too dependent on foreign suppliers for a range of items including some micro-electronics – tiny components including integrated circuits and transistors.

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These kinds of essential components are embedded in advanced electronics used in everything from satellites and cruise missiles to drones and cellphones.

The focus on China reflects an effort under Trump to address the risks to US national security from Beijing’s growing military and economic influence.

Pentagon officials want to be sure China is not able to hobble America’s military by cutting off supplies of materials or by sabotaging technology it exports.

The report could add to mounting trade tensions with China, bolstering the Trump administration’s “Buy American” initiative, which aims to help drum up billions of dollars more in arms sales for US manufacturers and create more jobs.

Lieutenant Colonel Mike Andrews, a Pentagon spokesman, did not comment on the contents of the report but said that the study would make recommendations “to ensure a robust, resilient, secure and ready manufacturing and defence industrial base”.

China, which has also become the main supplier of many rare earth minerals used by the United States, will be given special emphasis in the report, the officials who spoke on condition of anonymity said.

A January analysis from the United States Geological Survey found that the US produced no rare earth minerals in 2017 while China accounted for 81 per cent of global mine production. Rare earth minerals are used in magnets, radars and consumer electronics.

As well as the risk that a foreign power could cut off vital supplies needed to keep the US military up and running, other risks include the threat of sabotaged equipment or espionage.

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The Pentagon has long fretted that “kill switches” could be embedded in transistors that could turn off sensitive US systems in a conflict. US intelligence officials also warned this year about the possibility that China could use Chinese-made mobile phones and network equipment to spy on Americans.

When the study is released, it will not provide a detailed inventory of all the weaknesses in the supply chain. Those will be contained in a classified annex.

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A US official said the report will also examine US shortcomings that contribute to purchases from foreign companies, including roller-coaster US defence budgets that make it difficult for companies to predict government demand.

Advocates of the study say it is a late but critical look at ways to address America’s loss of manufacturing, whose toll on national security gets far less attention than the jobs lost.

“People used to think you could outsource the manufacturing base without any repercussions” on national security. “But now we know that’s not the case,” said one US official familiar with the report, speaking on condition of anonymity.

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One aspect of the report’s recommendations is expected to address ensuring profitability for niche US producers of critical components in American weaponry.

Ellen Lord, the Pentagon’s top weapons buyer, has publicly spoken in recent weeks about the Defence Production Act (DPA) of 1950, which allows the US president to incentivise domestic producers of critical materials through purchase commitments and other guarantees.

Lord said the government should step in to offer such support if businesses would be unable to ensure a “reasonable profit”.