Support Surges in House for Bringing Back Supply Chains From China

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April 18, 2020

Support for returning medical manufacturing from China to the United States is building in the House of Representatives, as lawmakers look to disengage from the country that gave the world the novel coronavirus.

At least three proposals have emerged in recent weeks that would use government purchasing and regulatory authority to encourage production of pharmaceutical ingredients, personal protective equipment, and other medical goods to return to the United States.

Republicans have led the charge, but House Republican Conference chair Liz Cheney (Wyo.) told the Washington Free Beacon, "there is bipartisan support for repatriating supply chains in the House."

The push for repatriation comes as the PRC faces increased scrutiny for its mishandling of and propaganda about the coronavirus epidemic. A new generation of congressional China hawks, meanwhile, sees the crisis as a chance to awaken their colleagues to the threat of supply chain dependence. As Rep. Michael Waltz (R., Fla.) told the Free Beacon, "the current crisis has put a gigawatt spotlight" on the entanglement between the United States and its biggest geopolitical adversary.

Waltz is the main sponsor of the House version of the Strengthening America's Supply Chain and National Security Act, one of several competing proposals that would require pharmaceutical firms to label the country of origin of the ingredients they use, as well as reimposing "buy American" mandates for pharmaceuticals on the DoD, VA, and other government agencies.

Waltz's bill, like others, aims to reduce the extent to which key parts of the American medical system are now made in China. An estimated 40 percent of the world's active pharmaceutical ingredients are sourced in the PRC. China also makes many American generic drug imports, including 95 percent of ibuprofen, 70 percent of acetaminophen, and 40 to 45 percent of penicillin. The slowdown attributable to the coronavirus's effect on Chinese manufacturing has already created the possibility of a shortage of over 150 drugs, according to an FDA report.

From Waltz's perspective, this arrangement poses two risks. "It's one thing to have an overdependency on any one country for a critical supply chain," he said, "but then to have it on an adversary with an opaque communist authoritarian regime is a whole different issue altogether."

Cheney, who has been outspoken about supply chain dependency in recent weeks, put it in starker terms: "By depending on China for life-saving medicines, the U.S. is giving the Chinese Communist Party a major source of leverage—the same Chinese Communist Party that created the global pandemic we now face through its lies; that is continuing to cover up information about coronavirus to this day; that has continued to conduct pernicious military operations despite the spread of the virus; that steals U.S. intellectual property; that engages in predatory economic behavior; that is committing gross human rights violations in Xinjiang; and more."

Similar thinking drives Rep. Mike Gallagher (R., Wis.), the House sponsor of both the Protecting our Pharmaceutical Supply Chain Act—which similarly requires active pharmaceutical ingredient labeling and prohibits government agencies from buying Chinese drugs—and the Medical Supply Chain Security Act, which gives the FDA broad powers to reduce the risk of shortages. Gallagher told the Free Beacon that proposals like these were increasingly seen as a no-brainer on both sides of the aisle.

"When it comes to China more broadly, I think the new bipartisan consensus is a hawkish position on China," he said. "And domestically, economically, I can see no obvious reason political or policy-wise why the Democrats wouldn't support more domestic manufacturing in general."

Although all three bills are led by Republicans, they each command at least some bipartisan support. Three of Waltz's eight cosponsors are Democrats, and Gallagher introduced the Medical Supply Chain Security Act alongside his Wisconsin delegation colleague Rep. Mark Pocan (D.). While there are no Democratic cosponsors on his other bill, Gallagher said he was "pretty optimistic" about that changing.

Rep. Jim Banks (R., Ind.), who has been an outspoken critic of the Chinese regime, told the Free Beacon that new interest among Democrats was almost certainly due to a broader hardening on China in the face of the coronavirus crisis.

"Recently, Democrats have been talking more about it; likely because of coronavirus and China's hold over our medical-supply chain," Banks said. "For members like me, who sit on Armed Services, and have been paying attention to the risks of relying on Chinese supply chains for a long time—it was like, 'finally, you noticed!'"

Banks lobbied House Speaker Nancy Pelosi (D., Calif.) to make supply chain repatriation a priority in the most recent coronavirus stimulus. The final bill did require an official report on U.S. supply chain dependency, but stopped short of anything "substantive about supply chains," Banks said.

Any such efforts, however, may run aground against the Democratic Party's progressive wing. Rep. Elise Stefanik (R., N.Y.), a cosponsor on Gallagher's bill, said that while some Democrats want to work on the issue in a bipartisan fashion, they have "been ridiculed by the far left."

As an example, Stefanik pointed to the case of Rep. Seth Moulton (D., Mass.). Moulton initially partnered with Banks on a resolution condemning China for spreading misinformation about the coronavirus, but was forced to withdraw amid criticism from his primary opponents and Rep. Judy Chu (D., Calif.).

"Democrats can choose to side with the Chinese Communist Party, or they can choose to work in a bipartisan fashion," Stefanik said.

While supply chain repatriation has taken a back seat to congressional efforts to bail out the stuttering economy, it is likely to gain more attention in the coming months. Waltz told the Free Beacon he will try to include his bill in the next defense reauthorization bill, while Gallagher expects to push for it as part of a package when the crisis has receded.

"If Pelosi is being responsible—that's a big if—she will consider a variety of pieces of legislation not only holding the Chinese Communist Party accountable, or at least supporting an investigation into the origin of the crisis, but figure out how we never find ourselves in this position again," he said.

Published under: China , Coronavirus