Offshoring shatters the defense base and overall military primacy

Even if America did not need a robust manufacturing base for balance of payments reasons—i.e., if the United States were to run a large enough trade surplus in services to offset the goods deficit—America would still need some manufacturing to support military capabilities. Wars are neither deterred nor won with services. Moreover, America’s military advantage has since WWII been based on technological superiority, not numerical superiority. This is why Obama administration Defense Secretaries Chuck Hagel and Ash Carter pursued the “third-offset strategy,” designed in part to develop next-generation, technology-enabled warfighting capabilities.57 This is critical because, according to Obama administration Deputy Defense Secretary Bob Work, China and Russia now “have theaterwide battle networks that are approaching parity with us.”58 Achieving the third offset depends on a robust advanced manufacturing innovation and production base in the United States. As the 2014 Quadrennial Defense Review stated, “U.S. innovations in warfighting, which have provided key capability advantages … are built on the continued strength of our defense industrial base.”59 But as the U.S. industrial base moves offshore, so does the defense industrial base. As Joel Yudken explains “Continued migration of manufacturing offshore is both undercutting U.S. technology leadership while enabling foreign countries to catch-up, if not leap-frog, U.S. capabilities in critical technologies important to national security.”60 Reliance on foreign manufacturers also increases U.S. vulnerability to receiving counterfeit goods. According to a study conducted by the Bureau of Industry and Security, in 2008 there were 9,356 incidents of counterfeit foreign products making their way into the Department of Defense supply line, a 142 percent increase over 2005.61 Therefore, if the U.S. defense industrial base is to retain its ability to develop the most technologically sophisticated defense platforms, the United States will need to be at the forefront of advanced-technology manufacturing capabilities in many areas, such as nanotechnology, advanced batteries, semiconductors, sensors, and autonomy. This means that any national manufacturing strategy has to pay particular attention to the current and future production and innovation needs of defense-based technologies and products, while at the same time ensuring that our potential adversaries, especially China, do not easily obtain key dual-use or military technologies. This will, of course, need to include ensuring that key weapons systems and components are made in the United States. But it will also mean that policy needs to ensure that America’s advanced-technology innovation and production base is healthy, as many defense capabilities depend on commercial innovations.