[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


INVESTING IN AMERICAN JOBS: LEGISLATION TO STRENGTHEN MANUFACTURING AND 
                            COMPETITIVENESS

=======================================================================

                            VIRTUAL HEARING

                               BEFORE THE

            SUBCOMMITTEE ON CONSUMER PROTECTION AND COMMERCE

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION
                               __________

                            OCTOBER 14, 2021
                               __________

                           Serial No. 117-52
                           

                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


     Published for the use of the Committee on Energy and Commerce

                   govinfo.gov/committee/house-energy
                        energycommerce.house.gov
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
55-031 PDF                 WASHINGTON : 2024                           
                        
                        
                    COMMITTEE ON ENERGY AND COMMERCE

                     FRANK PALLONE, Jr., New Jersey
                                 Chairman
BOBBY L. RUSH, Illinois              CATHY McMORRIS RODGERS, Washington
ANNA G. ESHOO, California              Ranking Member
DIANA DeGETTE, Colorado              FRED UPTON, Michigan
MIKE DOYLE, Pennsylvania             MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois             STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina    ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California          BRETT GUTHRIE, Kentucky
KATHY CASTOR, Florida                DAVID B. McKINLEY, West Virginia
JOHN P. SARBANES, Maryland           ADAM KINZINGER, Illinois
JERRY McNERNEY, California           H. MORGAN GRIFFITH, Virginia
PETER WELCH, Vermont                 GUS M. BILIRAKIS, Florida
PAUL TONKO, New York                 BILL JOHNSON, Ohio
YVETTE D. CLARKE, New York           BILLY LONG, Missouri
KURT SCHRADER, Oregon                LARRY BUCSHON, Indiana
TONY CARDENAS, California            MARKWAYNE MULLIN, Oklahoma
RAUL RUIZ, California                RICHARD HUDSON, North Carolina
SCOTT H. PETERS, California          TIM WALBERG, Michigan
DEBBIE DINGELL, Michigan             EARL L. ``BUDDY'' CARTER, Georgia
MARC A. VEASEY, Texas                JEFF DUNCAN, South Carolina
ANN M. KUSTER, New Hampshire         GARY J. PALMER, Alabama
ROBIN L. KELLY, Illinois, Vice       NEAL P. DUNN, Florida
    Chair                            JOHN R. CURTIS, Utah
NANETTE DIAZ BARRAGAN, California    DEBBBIE LESKO, Arizona
A. DONALD McEACHIN, Virginia         GREG PENCE, Indiana
LISA BLUNT ROCHESTER, Delaware       DAN CRENSHAW, Texas
DARREN SOTO, Florida                 JOHN JOYCE, Pennsylvania
TOM O'HALLERAN, Arizona              KELLY ARMSTRONG, North Dakota
KATHLEEN M. RICE, New York
ANGIE CRAIG, Minnesota
KIM SCHRIER, Washington
LORI TRAHAN, Massachusetts
LIZZIE FLETCHER, Texas
                                 ------                                

                           Professional Staff

                   TIFFANY GUARASCIO, Staff Director
                 WAVERLY GORDON, Deputy Staff Director
                  NATE HODSON, Minority Staff Director
            Subcommittee on Consumer Protection and Commerce

                        JAN SCHAKOWSKY, Illinois
                                  Chair
BOBBY L. RUSH, Illinois              GUS M. BILIRAKIS, Florida
KATHY CASTOR, Florida                  Ranking Member
LORI TRAHAN, Massachusetts           FRED UPTON, Michigan
JERRY McNERNEY, California           ROBERT E. LATTA, Ohio
YVETTE D. CLARKE, New York           BRETT GUTHRIE, Kentucky
TONY CARDENAS, California, Vice      LARRY BUCSHON, Indiana
    Chair                            NEAL P. DUNN, Florida
DEBBIE DINGELL, Michigan             GREG PENCE, Indiana
ROBIN L. KELLY, Illinois             DEBBIE LESKO, Arizona
DARREN SOTO, Florida                 KELLY ARMSTRONG, North Dakota
KATHLEEN M. RICE, New York           CATHY McMORRIS RODGERS, Washington 
ANGIE CRAIG, Minnesota                   (ex officio)
LIZZIE FLETCHER, Texas
FRANK PALLONE, Jr., New Jersey (ex 
    officio)
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Jan Schakowsky, a Representative in Congress from the State 
  of Illinois, opening statement.................................     2
    Prepared statement...........................................     3
Hon. Gus M. Bilirakis, a Representative in Congress from the 
  State of Florida, opening statement............................     4
    Prepared statement...........................................     5
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     6
    Prepared statement...........................................     8
Hon. Cathy McMorris Rodgers, a Representative in Congress from 
  the State of Washington, opening statement.....................     9
    Prepared statement...........................................    11

                               Witnesses

Scott N. Paul, President, Alliance for American Manufacturing....    12
    Prepared statement...........................................    15
Scott Lincicome, Senior Fellow in Economic Studies, Cato 
  Institute......................................................    21
    Prepared statement \1\
    Answers to submitted questions...............................   122
Eric P. Sills, President and Chief Executive Officer, Standard 
  Motor Products.................................................    22
    Prepared statement...........................................    25
    Answers to submitted questions...............................   125
Caolionn O'Connell, Ph.D., Senior Physical Scientist and 
  Professor, Pardee RAND Graduate School.........................    31
    Prepared statement...........................................    33
    Questions submitted for the record \2\.......................   128

                           Submitted Material

H.R. 2907, the Global Investment in American Jobs Act \3\
H.R. 3774, the Advancing Gig Economy Act \3\
H.R. 4594, the Restoring Brand USA Act \3\
H.R. 5474, the Reinforcing American-Made Products Act \3\
H.R. 5476, the Advancing Tech Startups Act \3\
H.R. 5479, the Supply Chain Health and Integrity for the Nation 
  Act \3\
H.R. 5492, the Manufacturing Economy and National Security Act 
  \3\
H.R. 5495, the Building Resilient Supply Chains Act \3\
H.R. 5502, the Integrity, Notification, and Fairness in Online 
  Retail Marketplaces for Consumers Act \3\
H.R. 5505, the Supply Chain Security and Resilience Act \3\
Statement of the Premiere Healthcare Alliance, October 14, 2021, 
  submitted by Ms. Schakowsky....................................    81
Letter of October 12, 2021, from Justin P. Oberman, Founder, 
  Assemble, to Mr. Pallone, submitted by Ms. Kelly...............    84

----------

\1\ Mr. Lincicome's statement has been retained in committee files and 
is available at https://docs.house.gov/meetings/IF/IF17/20211014/
114123/HHRG-117-IF17-Wstate-LincicomeS-20211014.pdf.
\2\ Dr. O'Connell did not answer submitted questions for the record by 
the time of publication.
\3\ The legislation has been retained in committee files and is 
available at https://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=114123.
Statement of Hon. Carolyn Bourdeaux, a Representative in Congress 
  from the State of Georgia, October 14, 2021, submitted by Ms. 
  Kelly..........................................................    87
Letter of October 14, 2021, from Hon. Tom Malinowski, a 
  Representative in Congress from the State of New Jersey, to Mr. 
  Pallone, submitted by Ms. Blunt Rochester......................    89
Letter from Tori Emerson Barnes, Executive Vice President, Public 
  Affairs and Policy, U.S. Travel Association, to Ms. Schakowsky 
  and Mr. Bilirakis, submitted by Mr. Bilirakis..................    90
Letter of April 22, 2021, from Hon. Debbie Lesko, a 
  Representative in Congress from the State of Arizona, to 
  Jennifer Granholm, Secretary of Energy, submitted by Mr. 
  Bilirakis......................................................    91
Letter of October 13, 2021, from Mary R. Grealy, President, 
  Healthcare Leadership Council, to Ms. Schakowsky and Mr. 
  Bilirakis, submitted by Mr. Bilirakis..........................    95
Statement of Michelle Michot Foss, Ph.D., Fellow in Energy, 
  Minerals and Materials, Rice University's Baker Institute for 
  Public Policy, Center for Energy Studies, May 5, 2021, 
  submitted by Mr. Upton.........................................    97
Letter of October 13, 2021, from Nancy McLernon, President and 
  Chief Executive Officer, Global Business Alliance, to Ms. 
  Schakowsky and Mr. Bilirakis, submitted by Mr. Pence...........   118

 
INVESTING IN AMERICAN JOBS: LEGISLATION TO STRENGTHEN MANUFACTURING AND 
                            COMPETITIVENESS

                              ----------                              


                       THURSDAY, OCTOBER 14, 2021

                  House of Representatives,
  Subcommittee on Consumer Protection and Commerce,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 12:01 p.m., via 
Cisco Webex online video conferencing, Hon. Jan Schakowsky 
(chair of the subcommittee) presiding.
    Members present: Representatives Schakowsky, Castor, 
Trahan, McNerney, Clarke, Cardenas, Dingell, Kelly, Soto, Rice, 
Pallone (ex officio), Bilirakis (subcommittee ranking member), 
Upton, Latta, Guthrie, Bucshon, Dunn, Pence, Lesko, Armstrong, 
and Rodgers (ex officio).
    Also present: Representatives Blunt Rochester, Kinzinger, 
Johnson, Carter, and Joyce.
    Staff present: Katherine Durkin, Policy Coordinator; Lisa 
Goldman, Senior Counsel; Waverly Gordon, Deputy Staff Director 
and General Counsel; Daniel Greene, Professional Staff Member; 
Tiffany Guarascio, Staff Director; Perry Hamilton, Clerk; Ed 
Kaczmarski, Policy Analyst; Zach Kahan, Deputy Director, 
Outreach and Member Services; Kaitlyn Peel, Digital Director; 
Caroline Rinker, Press Assistant; Tim Robinson, Chief Counsel; 
Chloe Rodriguez, Clerk; Kylea Rogers, Staff Assistant; Andrew 
Souvall, Director of Communications, Outreach, and Member 
Services; C.J. Young, Deputy Communications Director; Sarah 
Burke, Minority Deputy Staff Director; Michael Cameron, 
Minority Policy Analyst, Consumer Protection and Commerce, 
Energy, Environment; Nate Hodson, Minority Staff Director; Tim 
Kurth, Minority Chief Counsel, Consumer Protection and 
Commerce; Brannon Rains, Minority Professional Staff Member, 
Consumer Protection and Commerce; and Michael Taggart, Minority 
Policy Director.
    Ms. Schakowsky. The Subcommittee on Consumer Protection and 
Commerce will now come to order.
    Today we will be holding a hearing entitled ``Investing in 
American Jobs: Legislation to Strengthen Manufacturing and 
Competitiveness.''
    Due to the COVID-19 public health emergency, today's 
hearing is being held remotely. All Members and witnesses will 
be participating via video conferencing.
    As part of our hearing, microphones will be on mute for the 
purpose of eliminating inadvertent background noise. Members 
and witnesses will need to unmute your microphones each time 
that you wish to speak.
    Additionally, Members will need to be visible on the screen 
in order to be recognized.
    Documents for the record can be sent to Ed Kaczmarski at 
the email address that we have provided to staff. All documents 
will be entered into the record at the conclusion of the 
hearing.
    We will begin now with opening statements, and the Chair 
now recognizes herself for 5 minutes for an opening statement.

 OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Over a year and a half into the COVID-19 pandemic, 
shortages of critical products and consumer goods continue to 
plague domestic manufacturers and American families.
    Consumers across the country are finding empty shelves and 
longer wait times. I know I myself tried to get cleaning 
products and had a hard time doing that for my home.
    Those looking to buy large, durable goods, such as 
furniture or cars, even face bigger challenges and wait times.
    A severe shortage of semiconductors is harming vehicles, 
vehicle manufacturers, and causing used car prices to jump 27 
percent since last year.
    These marketplace disruptions harm consumers, especially 
the most vulnerable among us.
    It is clear that we have significant supply chain 
vulnerabilities.
    The public health crisis has created manufacturing 
disruptions, changed demand patterns, caused surges, and 
underscores America's insufficient domestic production 
capacity.
    This is why we are here today to discuss legislation that 
will improve our supply chain resilience, combat the growing 
threat posed by foreign countries' predatory practices, and 
protect consumers.
    We are considering critical legislation to make the online 
marketplaces, like Amazon, safer and fairer for consumers.
    Online sales, as we all know, have increased significantly 
during the pandemic as consumers have sought safer purchasing 
options for their everyday goods and their needs.
    However, American consumers face new dangers when 
purchasing goods online. Counterfeit goods are all too readily 
available on popular consumer websites.
    Not only do these products defraud consumers, but they also 
pose risks to health, safety, and security.
    We can't allow dangerous or stolen products sold on the 
online marketplaces, like Amazon, to line criminals' 
pocketbooks. Consumers deserve to shop with confidence and to 
get what they paid for.
    The INFORM Consumers Act, which I introduced along with my 
friend and colleague Ranking Member Bilirakis, will require 
online marketplaces, like Amazon, to verify the identity of 
high-volume sellers that operate on their platforms.
    It will protect consumers and legitimate businesses, 
increase trust in the marketplaces, and discourage criminals 
and fraudsters.
    The other legislative proposals from my colleagues that 
will be discussed today improve America's global 
competitiveness, increase supply chain resilience, promote 
domestic manufacturing, and strengthen supply chains of 
critical goods and services.
    So I really look forward to the testimony of our witnesses 
today as we explore how to improve and strengthen our supply 
chains, protect consumers, and ensure an economy that works for 
all Americans.
    Now I want to yield the remainder of my time to 
Representative Kelly.
    [The prepared statement of Ms. Schakowsky follows:]

               Prepared Statement of Hon. Jan Schakowsky

    Over a year and a half into the COVID-19 pandemic, 
shortages of critical products and consumer goods continue to 
plague domestic manufacturers and American families.
    Consumers across the country are finding empty store 
shelves and reduced selection.
    Those looking to buy larger, durable goods such as 
furniture or cars face even bigger challenges and wait times.
    A severe shortage of semiconductors is harming vehicle 
manufacturing and causing used car prices to jump 27% since 
last year.\1\
---------------------------------------------------------------------------
    \1\ https://www.nytimes.com/2021/10/07/business/used-car-
prices.html.
---------------------------------------------------------------------------
    These marketplace disruptions harm consumers, especially 
the most vulnerable.
    It is clear that we have significant supply chain 
vulnerabilities.
    The public health crisis has created manufacturing 
disruptions, changed demand patterns, caused surges, and 
underscored America's insufficient domestic production 
capacity.
    That is why we are here today to discuss legislation that 
will improve our supply chain resilience, combat the growing 
threat posed by foreign countries' predatory policies, and 
protect consumers.
    We're considering critical legislation to make the online 
marketplaces like Amazon safer and fairer for consumers. Online 
sales increased significantly during the pandemic as consumers 
sought to safely purchase the everyday goods they need.
    However, American consumers face new dangers when 
purchasing goods online.
    Counterfeit goods are readily available on popular consumer 
websites.
    Not only do these products defraud consumers, they also 
pose a risk to health, safety, and security.
    We cannot allow dangerous or stolen products sold online 
marketplaces like Amazon to line criminals' pockets.
    Consumers deserve to shop with confidence and get what they 
pay for.
    The INFORM Consumers Act, which I introduced with my 
colleague Ranking Member Bilirakis, will require online 
marketplaces like Amazon to verify the identity of high-volume 
sellers.
    It will protect consumers and legitimate businesses, 
increase trust in the marketplace, and discourage criminals and 
fraudsters.
    The other legislative proposals from my colleagues that 
will be discussed today improve America's global 
competitiveness, increase supply chain resilience, promote 
domestic manufacturing, and strengthen supply chains of 
critical goods and services.
    I look forward to the testimony of the witnesses as we 
explore how to improve and strengthen our supply chains, 
protect consumers, and ensure an economy that works for all 
Americans.
    I now yield the remainder of my time to Representative 
Kelly.

    Ms. Kelly. Thank you, Chairwoman Schakowsky, for holding 
this legislative hearing today.
    I have heard from small business owners, local governments, 
and large companies that they have struggled to obtain supplies 
during the COVID-19 pandemic.
    It has become clear that we need to build resilient supply 
chains to strengthen our economy and our national security.
    That is why I was proud to work with Representatives 
Bourdeaux and Kinzinger on H.R. 5479, the Supply Chain Health 
and Integrity for the Nation Act. This bill will help 
centralize the Government's oversight to monitor supply chain 
gaps and vulnerabilities as well as identify opportunities to 
reduce supply chain risk.
    The Government and private industry must work together to 
ensure we are better prepared for supply chain shocks in the 
future. I hope that my colleagues on both sides of the aisle 
will support this bipartisan legislation.
    I would also like to enter into the record a letter from 
Justin Oberman, the founder of Assemble, and a letter from 
Representative Bourdeaux in support of H.R. 5479.
    Thank you so much. And I yield back.
    Ms. Schakowsky. The Chair now recognizes Mr. Bilirakis, the 
ranking member of the subcommittee, for his 5 minutes of an 
opening statement.
    Mr. Bilirakis, you are recognized.

OPENING STATEMENT OF HON. GUS M. BILIRAKIS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. Bilirakis. Thank you very much.
    Thank you, Madam Chair, for holding this legislative 
hearing.
    And thank you to the witnesses for sharing your expertise 
today. There is a lot to cover with the four of you. So we 
appreciate your willingness to participate.
    To begin, I want to commend my friend, the chair of the 
committee, Chairwoman Schakowsky, for her leadership on the 
INFORM Consumers Act and working with me to reach a strong 
bipartisan agreement.
    This legislation will create a uniform national standard to 
provide consumers with clarity, transparency, and enhanced 
protections from malicious actors online who look to pawn 
stolen goods or sell dangerous counterfeits.
    The consensus we have reached among stakeholders will 
benefit not just our constituents so they are protected from 
counterfeit or stolen products--that is very important--but 
will also serve the marketplaces and their sellers well as they 
do business in all 50 States with a single set of rules.
    The world, as we know, has changed, as you know, 
drastically since the pandemic, and our reliance on e-commerce 
platforms has grown dramatically. That unfortunately means 
criminals are finding new ways to prey upon innocent consumers.
    That makes the INFORM Consumers Act a timely piece of 
legislation, given the restrictions on visiting our favorite 
local retailers.
    This is a sound solution that protects consumers online 
while also protecting the private information of small online 
entrepreneurs who are looking to make a little extra money in 
this tough economy.
    This committee also comes together in the name of promoting 
the economic drivers that employ so many of our constituents in 
the tourism sector. Of course, you know I am from the State of 
Florida, and that is our number-one industry.
    I am glad to see the Restoring Brand USA Act on the docket 
today that I introduced with my friend Peter Welch. And I thank 
you and thank him as well for his support of this legislation.
    I really appreciate your friendship, Peter, and the fact 
that we work together.
    We worked closely to reauthorize this program last August. 
But no one could have foreseen that the matching-fund 
requirement would create an impediment for companies trying to 
find an avenue back to normal from the COVID-19 pandemic.
    This legislation will release the dollars already collected 
for the Brand USA program to help return our travel and tourism 
industry back to its former glory.
    As I mentioned during a hearing with Secretary Raimondo 
earlier this year, the COVID-19 pandemic has drastically 
impacted the travel and tourism industry, obviously, a market 
that has contributed billions of dollars to local economies and 
created countless American jobs.
    This was an easy bipartisan win for our committee last 
Congress, so there is no reason we cannot get this bill across 
the finish line again this year, especially as we have so many 
supporters of Brand USA.
    I also ask for unanimous consent to enter into the record a 
letter of support from the U.S. Travel Association for the 
Brand USA program.
    Can we enter that into the record, Madam Chair?
    Ms. Schakowsky. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Bilirakis. Thank you.
    Given the title and purpose of this hearing, I would be 
remiss if I didn't highlight three bills introduced by my 
colleagues that would improve American competitiveness in 
emerging technologies, remove barriers prohibiting the growth 
and creation of American jobs, and incentivize investment in 
American companies.
    The Advancing Tech Startups Act, led by Representatives 
Johnson, Rush, and Phillips; the Advancing Gig Economy Act, led 
by Representative Joyce; and the Global Investment in American 
Jobs Act of 2021, led by Representative Pence and 
Representative Rush, are three bills that promote American 
leadership in emerging technologies and investment into new 
jobs and companies.
    I look forward to the discussion today so we can move to a 
markup, and as we review the docket, I encourage everyone to 
think about how we need to be thoughtful and purposeful in how 
we legislate, especially when it comes to the use of American 
taxpayer dollars and the future prosperity of our country.
    I am hopeful we will continue with a regular order process 
on these bills so we can put them through the kind of scrutiny 
and improvement this committee has demonstrated in the past.
    Thank you, Madam Chair. I appreciate it very much. And I 
yield back.
    [The prepared statement of Mr. Bilirakis follows:]

              Prepared Statement of Hon. Gus M. Bilirakis

    Good morning everyone,
    Thank you Madam Chair, for holding this legislative hearing 
and thank you to the witnesses for sharing your expertise 
today. There is a lot to cover with the four of you, so we 
appreciate your willingness to participate.
    To begin, I want to commend my friend Chair Schakowsky for 
her leadership on the INFORM Consumers Act and working with me 
to reach a strong bipartisan agreement. This legislation will 
create a uniform national standard to provide consumers with 
clarity, transparency, and enhanced protections from malicious 
actors online who look to pawn stolen goods or sell dangerous 
counterfeits. The consensus we have reached amongst 
stakeholders will benefit not just our constituents so they are 
protected from counterfeit or stolen products, but will also 
serve the marketplaces and their sellers well as they do 
business in all fifty states with a single set of rules.
    The world as we know changed drastically since the 
pandemic, and our reliance on e-commerce platforms has grown 
dramatically. That unfortunately means criminals are finding 
new ways to prey upon innocent consumers. That makes the INFORM 
Consumers Act a timely piece of legislation given the 
restrictions on visiting our favorite local retailers. This is 
a sound solution that protects consumers online, while also 
protecting the private information of small online 
entrepreneurs who are looking to make a little extra money in 
this tough economy.
    This Committee also comes together in the name of promoting 
the economic drivers that employ so many of our constituents in 
the tourism sector. I am glad to see the Restoring Brand USA 
Act on the docket today that I introduced with my friend Peter 
Welch, and I thank him for his support on this legislation.
    We worked closely to reauthorize this program last 
Congress, but no one could have foreseen that the matching fund 
requirement would create an impediment for companies trying to 
find an avenue back to normal from the COVID-19 pandemic. This 
legislation will release the dollars already collected for the 
Brand USA program to help return our travel and tourism 
industry back to its former glory.
    As I mentioned during a hearing with Secretary Raimondo 
earlier this year, the COVID-19 pandemic has drastically 
impacted the travel and tourism industry, a market that has 
contributed billions of dollars to local economies and created 
countless American jobs. This was an easy bipartisan win for 
our Committee last Congress, so there is no reason we cannot 
get this bill across the finish line again this year. [Madam 
Chair, I also ask for unanimous consent to enter into the 
record a letter of support from the U.S. Travel Association for 
the Brand USA program].
    Given the title and purpose of this hearing, I would be 
remiss if I didn't highlight three bills introduced by my 
colleagues that would improve American competitiveness in 
emerging technologies, remove barriers prohibiting the growth 
and creation of American jobs, and incentivize investment into 
American companies. The Advancing Tech Startups Act led by 
Representatives Johnson, Rush, and Phillips, the Advancing Gig 
Economy Act by Representative Joyce, and the Global Investment 
in American Jobs Act of 2021 led by Representatives Pence and 
Rush, are three bills that promote American leadership in 
emerging technologies and investment into new jobs and 
companies.
    I look forward to the discussion today so we can move to a 
markup, and as we review the docket I encourage everyone to 
think about how we need to be thoughtful and purposeful in how 
we legislate, especially when it comes to the use of American 
taxpayer dollars and the future prosperity of our country. I am 
hopeful we will continue with a regular order process on these 
bills so we can put them through the kind of scrutiny and 
improvement this Committee has demonstrated in the past.
    Thank you again Madam Chair and I yield back.

    Ms. Schakowsky. The gentleman yields back.
    And I now recognize the chair of the full committee, Mr. 
Pallone, for 5 minutes.

OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Chairwoman Schakowsky.
    Today the committee continues its work of revitalizing our 
economy by examining legislation to strengthen our 
manufacturing and competitiveness.
    America's competitiveness helped build the largest, most 
dynamic economy in the world, but it is facing unprecedented 
challenges.
    For three decades, the Institute for Management Development 
designated our Nation's economy as one of the five most 
competitive in the world. But since 2019 that ranking has 
fallen to 10th, making it more difficult for our economy to 
create good-paying jobs for the American people.
    The decline in our international competitiveness has been 
exacerbated by the steady erosion of America's industrial 
might.
    Once the envy of the world, our manufacturing base has 
faced steady headwinds for decades now. Between 2002 and 2016, 
our Nation's share of global manufacturing activity declined 
from 28 percent to just over 18 percent, and more than 5 
million manufacturing jobs have been lost since 2000.
    Investment in America's small and medium manufacturers, the 
bedrock of our industrial might, has also declined over the 
last 20 years by more than $200 billion.
    Now, these numbers are staggering, and they come at a time 
when the industrial power of our international counterparts is 
on the rise. China superseded the United States as the world's 
largest manufacturing country in 2010. And manufacturing output 
has grown faster in Germany, Mexico, and South Korea than it 
has here in the U.S.
    As a result, America now relies on production in other 
countries for many of our necessities, such as consumer 
electronics, household goods, food, pharmaceuticals.
    Weak supply chains threaten our industrial and 
technological sovereignty, and our declining manufacturing 
capacity harms our national security and economic vitality.
    Now, these vulnerabilities became devastatingly apparent 
during the COVID-19 pandemic, and ongoing disruptions of 
critical products like semiconductors--computer chips essential 
for the production of military equipment, automobiles, and 
consumer electronics--has hampered our Nation's recovery.
    But adverse market forces and supply chain disruptions are 
not the only challenges facing domestic producers and America's 
competitiveness. Online marketplaces have become pervasive 
sources of fraudulent, counterfeit goods.
    The Government Accountability Office found that 20 of 47 
items it purchased from third-party sellers on popular consumer 
websites were counterfeit. GAO also found that 16 percent of 
counterfeit products seized in fiscal year 2018 posed a direct 
risk to health, safety, and security.
    Counterfeiters steal market share from legitimate 
businesses and can cause severe reputational damage to the 
companies and products they impersonate.
    Online marketplaces should know who is selling products on 
their platforms, and consumers should be able to know who they 
are buying from.
    Fraudsters claiming their products are made in the USA 
undermine the integrity of domestic content labels and harm 
producers who are truly making goods in America.
    These unprecedented challenges to our economic prosperity 
and competitiveness cannot go unchallenged.
    Today we are examining legislation to strengthen the 
Nation's manufacturing might, economic vitality, and American 
competitiveness.
    We will discuss four bipartisan supply chain bills and 
create a whole-of-government process for identifying, 
monitoring, and closing supply chain vulnerabilities that 
imperil our national security and economic welfare.
    These bills provide targeted investments to boost our 
manufacturing base, strengthen supply chains, and ensure that 
America is prepared to meet the next crisis. They counteract 
destructive market forces and ensure that the U.S. is shaping 
the global economic order with our core values.
    We will also discuss the INFORM Consumers Act, which will 
help prevent counterfeit and harmful consumer products from 
entering the market. The legislation also provides small 
businesses and domestic producers much-needed relief during 
these challenging economic times.
    These bills and the other legislation under consideration 
today can help us turn the tide.
    I want to thank the witnesses for their testimony and look 
forward to the discussion.
    And I did want to say to the chairwoman and our Members 
that I am sure that when you are home you hear a lot about 
this.
    Some topics that we discuss in committee get more attention 
in DC, but this is something that I hear constantly from my 
constituents about: ``Why is it that we are not manufacturing 
here? Why is it that we depend on China and other countries?''
    I mean, people really, I think, at home are looking for us 
to act. So that is why I think this is so important, Madam 
Chairwoman.
    I yield back.
    [The prepared statement of Mr. Pallone follows:]

             Prepared Statement of Hon. Frank Pallone, Jr.

    Today, the Committee continues its work of revitalizing our 
economy by examining legislation to strengthen our 
manufacturing and competitiveness.
    America's competitiveness helped build the largest, most 
dynamic economy in the world, but it is facing unprecedented 
challenges. For three decades, the Institute for Management 
Development designated our nation's economy as one of the five 
most competitive in the world. Since 2019, that ranking has 
fallen to tenth, making it more difficult for our economy to 
create good paying jobs for the American people.
    The decline in our international competitiveness has been 
exacerbated by the steady erosion of America's industrial 
might. Once the envy of the world, our manufacturing base has 
faced steady headwinds for decades now. Between 2002 and 2016, 
our nation's share of global manufacturing activity declined 
from 28 percent to just over 18 percent. More than five million 
manufacturing jobs have been lost since 2000. Investment in 
America's small and medium manufacturers--the bedrock of our 
industrial might--has also declined over the last 20 years by 
more than $200 billion.
    These numbers are staggering, and they come at a time when 
the industrial power of our international counterparts is on 
the rise. China superseded the United States as the world's 
largest manufacturing country in 2010. And manufacturing output 
has grown faster in Germany, Mexico, and South Korea than it 
has here in the United States.
    As a result, America now relies on production in other 
countries for many of our necessities, such as consumer 
electronics, household goods, food, and pharmaceuticals. Weak 
supply chains threaten our industrial and technological 
sovereignty. Our declining manufacturing capacity harms our 
national security and economic vitality.
    These vulnerabilities became devastatingly apparent during 
the COVID-19 pandemic. And ongoing disruptions of critical 
products like semiconductors--computer chips essential for the 
production of military equipment, automobiles, and consumer 
electronics--has hampered our nation's recovery.
    But adverse market forces and supply chain disruptions are 
not the only challenges facing domestic producers and America's 
competitiveness. Online marketplaces have become pervasive 
sources of fraudulent, counterfeit goods. The Government 
Accountability Office (GAO) found that 20 of 47 items it 
purchased from third-party sellers on popular consumer websites 
were counterfeit. GAO also found that 16 percent of counterfeit 
products seized in Fiscal Year 2018 posed a direct risk to 
health, safety, and security.
    Counterfeiters steal market share from legitimate 
businesses and can cause severe reputational damage to the 
companies and products they impersonate. Online marketplaces 
should know who is selling products on their platforms and 
consumers should be able to know who they are buying from. 
Fraudsters claiming their products are``Made in USA'' undermine 
the integrity of domestic content labels and harm producers who 
are truly making goods in America.
    These unprecedented challenges to our economic prosperity 
and competitiveness cannot go unchallenged. Today, we are 
examining legislation to strengthen the nation's manufacturing 
might, economic vitality, and American competitiveness.
    We will discuss four bipartisan supply chain bills that 
create a whole-of-government process for identifying, 
monitoring, and closing supply chain vulnerabilities that 
imperil our national security and economic welfare. These bills 
provide targeted investment to boost our manufacturing base, 
strengthen supply chains, and ensure that America is prepared 
to meet the next crisis. They counteract disruptive market 
forces and ensure that the United States is shaping the global 
economic order with our core values.
    We will also discuss the INFORM Consumers Act, which will 
help prevent counterfeit and harmful consumer products from 
entering the market. The legislation also provides small 
businesses and domestic producers much needed relief during 
these challenging economic times.
    These bills and the other legislation under consideration 
today can help us turn the tide. I thank the witnesses for 
their testimony and look forward to the discussion.

    Ms. Schakowsky. The Chair now recognizes Mrs. Rodgers, 
wishing her good health, the ranking member of the full 
committee, for her 5 minutes of an opening statement.

      OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A 
    REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

    Mrs. Rodgers. Thank you, Madam Chair.
    And to the chairman, I would agree that this is a very 
important issue that we hear at home, the concern about supply 
chains, manufacturing in the United States, and also the 
recognition that American leadership and competitiveness are so 
important, as you said, in ensuring that it is our core values 
that are reflected as we lead here in the United States.
    There are certainly very noteworthy initiatives that are 
going to be under consideration, and I appreciate the committee 
spending the time today.
    We want to be encouraging more investment in the United 
States of America. We want to be increasing responsibility on 
e-commerce platforms, assisting the travel and tourism rebound 
from the pandemic, and promoting clear national strategies for 
emerging technology.
    All of this is important to America's leadership and 
competitiveness.
    I am encouraged to see our Members working together as the 
supply chain challenges persist. All you have to do is look at 
the L.A. Port or the store shelves that are empty. And even the 
White House yesterday admitted that they are not going to be 
able to guarantee that our holiday packages arrive on time, 
that we need to start our Christmas shopping now.
    This crisis, plus labor shortages, are increasing costs on 
Americans, and we are seeing inflation at a 13-year high. We 
need to be focused on solutions that are going to strengthen 
America's economy and not just scoring political points with 
more reckless spending.
    As the Republican leader on this committee, I must raise 
concerns about the legislation to authorize $40 billion of 
taxpayer funds. As I understand, this proposal may serve as the 
committee's response to the United States Innovation and 
Competition Act, USICA, that passed the Senate earlier this 
year.
    While the Senate might have changed the name of the Endless 
Frontier to USICA, it doesn't change my view of this 
legislation. I am concerned about trying to beat the Chinese 
Communist Party at their own game, through expansive government 
subsidies. It is not how we will win the future.
    We cannot let counties like China control critical 
supplies, materials, and technology that drive the economy and 
determine the future.
    Creating new, duplicative, multibillion-dollar programs and 
trying to outspend the Chinese Communist Party is not the 
solution.
    We should be addressing significant challenges to the 
security of our manufacturing sectors and supply chains, like 
overregulation, permitting reform, tax burdens, and unclear 
rules of the road for businesses.
    Creating low barriers to entry and lifting the tax and 
regulatory burdens will lead to economic competitiveness, 
leadership, and prosperity. That is what we set out to do in 
the American COMPETE Act, which is undergoing administrative 
action.
    Unfortunately, time and time again we see that the 
majority's answer to virtually every pressing issue is to spend 
more money. It is unsustainable, and it is going to create more 
problems than it solves.
    These vulnerabilities in our supply chain were exposed 
during the COVID-19 pandemic, and they continue to reverberate 
throughout our domestic industries.
    Not only do we see the Biden-Harris administration ignoring 
the underlying causes of the rampant supply chain and domestic 
manufacturing crises we are seeing, the Biden-Harris 
administration's increasing regulations, and the reconciliation 
tax and spending spree, are only going to make these issues 
worse, make us more dependent upon China.
    Whether it is the continued rush to green, forcing adoption 
of renewables and electric vehicles, or the price controls on 
prescription drug medicines, these are the priorities that are 
going to destroy any hope of America being the globally 
competitive economic leader.
    Throwing another 10 or hundred billion dollars to pay off 
industry is not going to make these issues go away, and 
unfortunately it is only going to make us more dependent upon 
China.
    Instead, we should remove the barriers preventing America 
from onshoring our vulnerable supply chains and manufacturing 
emerging technologies.
    We need the permitting and licensing reforms to take 
advantage of America's abundant natural resources so that we 
can secure domestic sources of critical minerals that will fuel 
the future.
    We need to keep our competitive tax code in place, that was 
enacted under the Republican administration through the Tax 
Cuts and Jobs Act, that will encourage investment in the United 
States.
    We need regulatory reforms that let the private sector 
innovate.
    These are the solutions to this supply chain crisis that is 
raising costs on every family. It is how we will win the future 
and beat China.
    So let's do the hard work now, before we move to a markup, 
and pass policies that are truly bipartisan coming out of this 
committee.
    Thank you. I yield back.
    [The prepared statement of Mrs. Rodgers follows:]

           Prepared Statement of Hon. Cathy McMorris Rodgers

    There are many noteworthy initiatives for us to review 
today..
    Encouraging investment in the U.S, increasing 
responsibility on ecommerce platforms, assisting the travel and 
tourism rebound from the pandemic, and promoting clear national 
strategies for emerging technologies.
    It's encouraging to see our members working together. 
However, many supply chain challenges persist. Just look at the 
L.A. port. Store shelves are empty and the White House admitted 
yesterday they cannot guarantee holiday packages will arrive on 
time. This crisis PLUS labor shortages are increasing costs on 
Americans when inflation is already at a 13-year high. We 
should be focused on solutions to strengthen the American 
economy--not scoring political points with reckless spending.
    As Republican leader of this committee, I must also raise 
concerns with the legislation to authorize over $40 billion of 
taxpayer funds as I understand this proposal may serve as the 
Committee's response to the United States Innovation and 
Competition Act--USICA--that passed the Senate earlier this 
year.
    While the Senate might have changed the name of Endless 
Frontiers to USICA, it didn't change my view of this 
legislation. USICA--which tries to beat the Chinese Communist 
Party at their own game of expansive government subsidies--is 
not how we will win the future. We cannot let countries like 
China control the critical supplies, materials, and 
technologies that drive the economy and determine the future.
    Creating new, duplicative multi-billion dollar programs, 
and trying to outspend the CCP is not the solution. Instead, we 
should address significant challenges to the security of our 
manufacturing sectors and supply chains like overregulation, 
permitting reform, tax burdens, and and unclear rules of the 
road for businesses.
    Creating low barriers to entry and lifting the tax and 
regulatory burdens will lead to economic leadership and 
prosperity. That is what we set out to do with the American 
COMPETE Act, which is undergoing Administrative action.
    Time and again, the Majority's answer to virtually every 
pressing issues our country faces is to spend more money. This 
is unsustainable and will create more problems than it solves. 
These vulnerabilities in our supply chain were exposed during 
the COVID-19 pandemic and continue to reverberate across our 
domestic industries.
    Not only are Democrats and the Biden-Harris administration 
ignoring the underlying causes of the rampant supply chain and 
domestic manufacturing crises we're seeing their regulations 
and the reconciliation tax and spending spree will make these 
issues worse and make us even more dependent on China.
    Whether it's the taxpayer-financed rush to green forcing 
the adoption of renewables and electric vehicles or the 
innovation-killing socialist price controls on prescription 
medicines. These reckless priorities will destroy any hope of 
America being a globally competitive, economic leader.
    Throwing another ten or hundred billion dollars to pay off 
industry will not make these issues go away and it certainly 
will make us more reliant on the Chinese Communist Party.
    Instead, we should remove the barriers preventing America 
from onshoring our vulnerable supply chains and manufacturing 
emerging technologies. We need permitting and licensing reforms 
to take advantage America's abundant natural resources so we 
can secure domestic sources of critical minerals that will fuel 
the future.
    We need to keep the competitive tax code Republicans 
enacted with the Tax Cuts and Jobs Act, so foreign and domestic 
companies invest in America. And, we need regulatory reforms 
that let the private sector innovate. These are the solutions 
to this supply chain crisis that is raising costs on every 
family.
    That is how we win the future and beat China, not by 
passing socialist agendas--on the back of CHIPS legislation--
that result in more centralized planning from the federal 
government. Let's do the hard work now, before we move to a 
markup, so we pass policies that are truly bipartisan consensus 
of this committee. Thank you, I yield back.

    Ms. Schakowsky. The gentlewoman yields back.
    And the Chair would like to remind Members that, pursuant 
to committee rules, all Members' written opening statements 
shall be made part of the record.
    And I now would like to introduce our witnesses for today's 
hearing.
    Mr. Scott Paul is president of the Alliance for American 
manufacturing.
    Mr. Scott Lincicome is the senior fellow of economic 
studies at the Cato Institute.
    Mr. Eric Sills is CEO of Standard Motor Products.
    And Dr. Caolionn O'Connell is the senior physical scientist 
at the RAND Corporation.
    At this time the Chair will recognize each witness for 5 
minutes to provide an opening statement. Please watch the clock 
that is on your screen and conclude when the 5 minutes allotted 
have elapsed.
    So, Mr. Paul, you are now recognized for 5 minutes.

 STATEMENTS OF SCOTT N. PAUL, PRESIDENT, ALLIANCE FOR AMERICAN 
   MANUFACTURING; SCOTT LINCICOME, SENIOR FELLOW IN ECONOMIC 
  STUDIES, CATO INSTITUTE; ERIC P. SILLS, PRESIDENT AND CHIEF 
   EXECUTIVE OFFICER, STANDARD MOTOR PRODUCTS; AND CAOLIONN 
  O'CONNELL, Ph.D., SENIOR PHYSICAL SCIENTIST AND PROFESSOR, 
                  PARDEE RAND GRADUATE SCHOOL

                   STATEMENT OF SCOTT N. PAUL

    Mr. Paul. Thank you very much, Madam Chair, and to the 
chair of the committee, to the ranking members, and to the 
Members who are here today.
    I am grateful for the opportunity to testify before this 
important subcommittee on measures that will make our country 
more competitive, particularly in manufacturing, and that is 
where I will confine my remarks.
    I believe you all have a copy of my written testimony. It 
runs 6 pages. That is well over 5 minutes. So I will summarize 
the highlights, and I will very much look forward to your 
questions.
    I would add that over the last 15 years I have been to, I 
think, virtually all of your States to talk to workers and 
voters about these concerns and have been to a lot of these 
industrial towns. I share the sentiment of the chairman when he 
says this is a top-of-mind issue for voters even if it doesn't 
always rise to the top in Washington, DC.
    Let me set the stage by just asking a question: Do we have 
a problem that needs to be solved? And the answer is absolutely 
yes.
    Obviously, there are acute supply chain challenges. As Mr. 
Pallone pointed out, there have been longer-term declines in 
the relative performance of American manufacturing. And this 
should concern all of us. It should concern all of us for a 
couple of key reasons.
    First of all, manufacturing is one of the rare drivers of 
upward mobility for the vast majority of Americans who don't 
have a college degree, a 4-year college degree. And so when we 
are foreclosing those opportunities, we are denying the 
American Dream to millions and millions of our fellow 
countrymen and -women.
    Second of all, national security depends on the performance 
of American manufacturing.
    From our battleships, to our guided missile systems, to the 
armored personnel carriers that keep our military personnel 
safe, we depend on a vibrant commercial market in 
manufacturing, since we don't have state-run defense firms, to 
ensure that they can succeed in the defense market as well.
    And so having a fair and successful market in manufacturing 
in the commercial sector is vital to our national security 
needs.
    Third, manufacturing is a tremendous driver of innovation 
and patents in the United States. Fully two-thirds of the 
research and development and 90 percent of all the patents that 
are filed are filed by manufacturing companies.
    So even though as a percentage of the economy it is smaller 
than it used to be, it has an outsized share in terms of its 
importance in the American economy today.
    And you see it in your towns as well. When the factory is 
doing well, the grocery stores are doing well, the hardware 
stores are doing well, Main Street is more vibrant, people can 
buy better homes and buy more services and take vacations.
    I recall something that Mr. Bilirakis said. I remember 
visiting with voters in Florida who said to me, ``We can tell 
the amusement parks are fuller when the manufacturing economy 
in the rest of the country is doing well because they have 
disposable income that they can bring to our State.''
    And so the spillover effects of manufacturing are 
critically important.
    Now, we face an acute crisis. Our supply chains, this 
pandemic has shown, have been incredibly fragile, and it is a 
toxic combination of overglobalization, just-in-time 
production, and a lack of resiliency or redundancy. And this is 
what happens when you offshore a lot of American capacity.
    This began many decades ago. It was turbocharged by giving 
China a blank check in 2000 and then not holding China to 
account. And this was true of Democratic and Republican 
administrations for a number of years.
    But here we are today. We have lost millions of 
manufacturing jobs, tens of thousands of factories, and we have 
diminished capacity.
    I will give one example. Even if we wanted to rebuild a 
resilient energy grid in the United States, there is just one 
supplier of grain-oriented electrical steel that is based in 
the United States, which is one of the core components that 
goes into that. We have let our capacities become incredibly 
thin in this time--and it showed.
    So when we face these black swan events, like a public 
health crisis, or a natural disaster that disrupts supply 
chains, or political risk coming from the Communist Party of 
China, it shows just how exposed we are. So it makes sense to 
make smart policy choices when it comes to manufacturing.
    Now, I strongly believe that the measures that have been 
proposed would make a difference. America has a long history of 
successful public-private partnerships that have driven growth 
in manufacturing. You see that from the space sector, to the 
defense sector, to the energy sector, to semiconductors in a 
wave of Japanese competition back in the 1990s.
    So if we make targeted, strategic, smart investments with 
the partnership of the private sector, we can have an 
exponentially greater effect as we look ahead.
    And the stakes are very high for us. We produce a paucity 
of our own semiconductors now that we need for use in the 
United States of America, and lithium ion batteries and solar 
panels and many other types of national security goods like 
armor plate and grain-oriented electrical steel----
    Ms. Schakowsky. Mr. Paul, you are going to have to wrap up.
    Mr. Paul. So I appreciate the chairwoman's admonition 
there, and I will wrap up.
    We have made some recommendations on how we think the 
legislation could move forward. We support the preponderance of 
these measures. And I look forward to taking your questions.
    Thanks. And I apologize for running over.
    [The prepared statement of Mr. Paul follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Schakowsky. No problem. The gentleman yields back.
    And now I recognize Mr. Lincicome for his 5 minutes of 
testimony.

                  STATEMENT OF SCOTT LINCICOME

    Mr. Lincicome. Thank you, Chair Schakowsky, Ranking Member 
Bilirakis, and members of the subcommittee.
    My name is Scott Lincicome, and I am a senior fellow in 
economic studies at the Cato Institute, where my research 
focuses on manufacturing, industrial policy, and global supply 
chains.
    I want to thank you, Madam Chair, for inviting me to 
testify today. And I want to thank Ranking Member Bilirakis, in 
particular, for asking me to offer my views.
    Now, before I begin, I should note that the Cato Institute 
and its scholars do not endorse, oppose, or otherwise lobby on 
specific legislation. So my comments today are thus intended to 
be just for educational purposes.
    I only have a few minutes, so I will just emphasize several 
themes that were in my written statement and that carry across 
my work and are thus relevant today. I would welcome your 
followup questions.
    First, U.S. manufacturing is far more competitive and 
resilient than is often claimed. Data show, for example, that 
the sector remains among the largest and most productive in the 
world and had enjoyed, prior to the pandemic, a long stretch of 
gains in output, investment, and financial performance.
    Now, like all sectors, manufacturing suffered when COVID 
first hit, but it quickly rebounded. This year, for example, 
real value-added in manufacturing has hit new all-time highs, 
and spending on capital goods and R&D has also resumed its 
upward climb.
    By contrast, declining manufacturing jobs and the sector's 
shrinking share of GDP tell us very little because these trends 
reflect long-term global dynamics shared by most industrialized 
nations. This includes ones like Germany and Japan with active 
industrial policies and trade surpluses. The trends are mainly 
a standard story of economic development, not reason for 
serious concern.
    Second, there is little to suggest that isolationism or 
industrial policy would durably benefit American manufacturing.
    History shows that government attempts to achieve strategic 
market-beating commercial outcomes routinely suffer from a lack 
of knowledge about a chosen industry, a lack of checks on 
political influence, a lack of discipline on project budget, 
scope, or duration, a lack of consideration of preexisting 
government policies that slow or derail projects, and a lack of 
a comprehensive accounting for a project's unseen costs.
    More importantly, U.S. industrial policies have undermined 
their very own objectives. In just the last few years, for 
example, tariffs on metals and Chinese imports, allegedly 
implemented to boost American manufacturing, have deterred 
investment and reduced industrial output and employment.
    This is a disappointing but predictable result, given that 
roughly half of all imports are inputs and capital goods used 
by American manufacturers.
    Third, there is no simple cure for global economic shocks. 
Supply chains and economic openness inevitably risk a foreign 
or global shock that roils domestic supplies. Such issues 
surely have arisen since last year, as has been widely 
reported. Far less reported, however, is how companies 
immediately began adjusting to whatever supply chain challenges 
arose.
    Medical goods, I think, are a great example. According to a 
December 2020 United States International Trade Commission 
report, U.S. manufacturers and global suppliers acted quickly 
to procure or produce new drugs, medical devices, PPE, and 
other goods, resolving by the fall of last year shortages for 
all but one product examined. Other industries have done the 
same. But, of course, challenges remain.
    This is a testament to the tireless work of manufacturers, 
retailers, and logistics pros. But it is also, I think, a 
cautionary tale for policymakers. By the time Congress decides 
to intervene in a market, it will look much different than the 
one on which that decision was based, and it will change again 
by the time any government-supported production comes online.
    Furthermore, while reshoring supply chains might insulate 
us from certain external shocks, those same policies can 
amplify shocks too. Indeed, we just saw this when an 
unprecedented cold snap hit Texas, knocking out domestic 
production and domestic supply chains.
    Now we learn that Germany, a nation far more focused on 
manufacturing and often a model for American industrial policy, 
has suffered greater economic harms because of its heightened 
dependence on domestic manufacturing.
    Finally, future government action here should focus not on 
trying to outsmart the market or on delivering subsidies to 
privileged manufacturers and workers, but instead on economic 
openness, diversification, and flexibility. This includes 
policies liberalizing trade and foreign investment and making 
ports and logistics operations more efficient.
    Congress should also consider horizontal economic reforms, 
like expanded high-skill immigration and streamlined corporate 
tax and regulatory burdens.
    Such policies would attract foreign investment and boost 
manufacturing by increasing efficiency, increasing companies' 
access to critical goods, services, and workers, dampening 
economic shocks, boosting economic growth, and facilitating 
rapid adjustment--precisely what America needs right now.
    Thank you.\1\
---------------------------------------------------------------------------
    \1\ Mr. Lincicome's prepared statement has been retained in 
committee files and is available at https://docs.house.gov/meetings/IF/
IF17/20211014/114123/HHRG-117-IF17-Wstate-LincicomeS-20211014.pdf.
---------------------------------------------------------------------------
    Ms. Schakowsky. Thank you very much.
    And now I welcome the testimony for 5 minutes of Mr. Sills.

                   STATEMENT OF ERIC P. SILLS

    Mr. Sills. Thank you. And it is truly an honor to be 
serving as a witness here today.
    My name is Eric Sills, and I am the CEO of Standard Motor 
Products. Standard is a 102-year-old company listed on the New 
York Stock Exchange. It was founded by my great-grandfather, 
and I represent the fourth generation of family management.
    The company has revenue in excess of $1.1 billion per year 
in sales, most of which are here in America. And while we do 
have a global footprint, here in the U.S. we have 11 facilities 
in eight States and employ approximately 2,500 associates.
    The purpose of my testimony today is not to weigh in on the 
proposed bills. That is not my expertise. And my fellow 
witnesses, I am sure, are far more versed on the details than I 
am.
    Rather, I am here to provide insights into my company's 
experiences over the last 18 months navigating the 
unprecedented challenges manufacturers like me have been 
facing, managing the way though the complexities of an 
entrenched global supply chain.
    My company's primary business is manufacturing automotive 
replacement products, servicing the vehicle repair market. They 
are largely nondiscretionary repair items used in critical 
vehicle systems, including power trains, safety systems, and 
emissions controls.
    It was determined by the Department of Homeland Security 
during the 2020 pandemic lockdowns that our industry has been 
deemed essential as we keep America's critical infrastructure, 
the 290 million vehicles on our roads, operating properly.
    As you know, vehicles are used for everything, from getting 
responders to emergencies, to allowing everyday people to 
commute to work and perform their daily tasks. So, therefore, 
it is truly vital that our products remain in ample supply to 
satisfy the repair needs of America's aging vehicle population.
    Right now, like so many other domestic manufacturers, we 
rely on a global supply chain, and needless to say, we are 
being impacted on multiple fronts. These issues include a 
combination of severe shortages, significant delays, and 
exorbitant cost increases.
    In terms of materials, we are seeing issues across a wide 
range of commodities. Semiconductors get a lot of attention, 
and we are certainly affected by that. We are also seeing it in 
silicone, plastic resins, multiple metals, including steel, 
aluminum, and copper, even in packaging materials.
    Constrained supply is causing allocations below our needs. 
Lead times are extending sometimes to as much as a year. And 
prices are increasing across the board, with many commodities 
up 20 percent or more from historic values.
    Secondly, transportation has also been extremely hard hit. 
Congestion at the ports here in the U.S. as well as abroad is 
significant, and it is compounded by a shortage of containers.
    Our transportation lead times have doubled, and the cost of 
shipping a container has increased an unbelievable sixfold from 
an historic $3,000 per container to often over $18,000 per 
container today.
    Lastly, we are experiencing labor issues. While highly 
skilled positions, such as software and automation engineers, 
have been in short supply for a while, the near-term issue is 
finding factory and distribution personnel.
    This has caused a continued increase in wages, which is OK. 
But even with that, it is leaving us with many positions 
unfilled, especially semiskilled ones, such as forklift 
drivers.
    All of these issues combine for significant cost increases, 
some of which we absorb, while others we do pass on, which 
ultimately will increase the price to consumers.
    But worse is the inability to satisfy demand. Certainly it 
is causing a degree of lost revenue, both in my company as well 
as my downstream customers.
    But I believe the far bigger issue is that consumers are 
experiencing delays in getting their vehicles repaired, which 
again is critical to their daily lives.
    All said, while my company is obviously incurring 
challenges on multiple fronts, I believe we have certain 
structural advantages that have helped us.
    As opposed to some companies who rely very heavily on China 
for their finished products, my company has developed its 
footprint much more based in North America, taking advantage of 
the benefits of NAFTA and now the USMCA.
    So while we are reliant on Asia for portions of our 
offering and for various components feeding our North American 
operations, we are somewhat less beholden to Asia and the 
supply chain shocks originating from there. We have kept our 
more capital-intensive, higher-tech production in our U.S. 
plants and our more labor-intensive operations in Mexico.
    We do believe that this a strong answer to remain 
competitive as a nation, relying on the benefits of regional 
cost optimization and being less reliant on the Far East and 
all the challenges it presents.
    No one could have anticipated this perfect storm of events 
that has led to this level of disruption, and there are no 
quick fixes, which does leave us scrambling to find creative 
solutions and do our best to navigate the daily challenges.
    But I applaud the committee's desire to gain insights from 
the lessons learned and identify potential structural changes 
to address our vulnerability and thereby potentially prevent 
recurrence.
    Thank you very much.
    [The prepared statement of Mr. Sills follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Schakowsky. The gentleman yields back.
    I now recognize Dr. O'Connell for your 5 minutes of 
testimony.

             STATEMENT OF CAOLIONN O'CONNELL, Ph.D.

    Dr. O'Connell. Thank you, members of the subcommittee, for 
inviting me today.
    In this oral testimony I want to highlight three aspects of 
my written testimony.
    First, I want to briefly describe the scope of the problem.
    Second, I want to highlight the role that the public sector 
can have in potentially improving supply chain resiliency.
    And third, I want to note what I see as a critical first 
step in improving supply chain resiliency.
    To my first point, I want to acknowledge the breadth of the 
problem.
    Supply chain is defined as the raw materials components 
required to manufacture a product, what frequently has been 
called a Gordian knot, so large and complicated that simply 
understanding all the links can feel like an intractable 
problem.
    But that definition is grossly incomplete in our modern-day 
society. We are entering a world where cyber disruptions can 
easily become supply chain disruptions.
    In the production of programmable integrated circuits, the 
supply chain should include not only the chip designer and the 
silicon foundry where the chip is manufactured, but also the 
software tools.
    Using the SolarWinds hack as an example, hackers suspected 
to be associated with Russia added malicious codes to a 
SolarWinds software system used widely to manage the IT 
resources.
    This was a cyber hack that resulted in a supply chain 
disruption. The malware allowed attackers to compromise the 
servers on which the SolarWinds software was installed, and 
about 18,000 customers were exposed to the vulnerability, 
including multiple U.S. Government agencies, thereby allowing 
hackers untold access to sensitive and proprietary information.
    SolarWinds was only one supplier, and this software system 
is merely a single element in the supply chain. But in a very 
real sense, an information system is only as secure as the 
least secure piece of software that runs on the system.
    I recognize the legislation before you are about 
manufacturing, but it is important to acknowledge that this is 
just one element of the supply chain ecosystem.
    To my second point, I want to highlight the role that the 
public sector can have in potentially improving supply chain 
resiliency. Market forces do not always result in the desired 
outcomes. They can generate local optimizations that do not 
consider the problem as a whole.
    Using my national security experience as a case study, 
consider, for example, the supply chain for joint operations 
that serves the Joint Force.
    The military services, geographic combatant commanders, the 
Defense Logistics Agency, and others make independent decisions 
about the purchase and positioning of spare parts. These 
organizations have different responsibilities, authorities, and 
incentivizes that drive their supply chain decisions, which are 
optimized for the individual organizations.
    In practice, these competing priorities can reduce the 
overall effectiveness of the joint operating force that these 
organizations support.
    The public sector's role can be to make investments to 
increase the overall effectiveness of a given sector's supply 
chain. The public sector can shore up vulnerable supply chains 
that support critical national security functions and essential 
elements of the U.S. economy for which the private sector has 
an incomplete appreciation of the risk or for which the cost 
burden outweighs the perceived benefits.
    And finally, for my third point I want to note what I see 
as a critical first step in improving supply chain resiliency.
    Research is necessary to determine which aspects of the 
supply chain pose an existential risk to the United States 
economy or the well-being of its citizens. If everything is 
considered essential, then nothing will be truly protected.
    Just as businesses must assess the cost-benefits associated 
with supply chain resiliency, the U.S. Government also needs to 
understand the value proposition. Not all supply chains merit a 
Federal intervention, and for those sectors that are not 
essential, market forces should prevail.
    Initial work is underway, but there is still significant 
analysis to be done. It is our assessment at RAND that supply 
chains have become a major challenge for national security and 
drove our decision to recently establish the National Security 
Supply Chain Institute so that we can help our government 
clients better understand and mitigate these risks.
    Highly interconnected supply chains are a fact of life, 
bringing both benefit and vulnerabilities, and those 
vulnerabilities can stretch across whole sectors of the U.S. 
economy.
    It is a national security issue in the most basic sense: a 
set of interests that, if disrupted, could directly affect the 
health and well-being of the United States and its allies. 
Meeting the challenges will take considerable effort, analysis, 
and thought.
    I look forward to your questions.
    [The prepared statement of Dr. O'Connell follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Schakowsky. Thank you so much to all of our witnesses.
    We now have concluded with the witnesses' opening 
statements. And at this time, we will move to Member questions 
of our witnesses. And I will start with myself for 5 minutes.
    So reinvesting in America's manufacturing base is 
absolutely crucial to growing the economy and creating more 
jobs. But to ensure that those are good-paying and secure jobs, 
we have to put workers at the core of our effort to strengthen 
our manufacturing base.
    So my question first goes to Mr. Paul.
    To strengthen our manufacturing base and to compete 
globally, do you think that we need to compromise our labor 
standards, such as living wages and health coverage and 
workplace health and safety?
    Mr. Paul. Thank you for the question.
    The simple answer is no. And I will be happy to explain.
    The United States is not going to win a race to the bottom. 
It will find it to be self-defeating.
    We have seen that. There is a concept called labor 
arbitrage, and there is considerable economic evidence that as 
we opened up our markets and reduced tariffs that it had 
downward pressure on wages in the United States.
    There are ways to combat this. Obviously, investing in 
manufacturing domestically is one of those. We need to ensure 
that our trade laws are strong and strictly enforced, 
particularly when it comes to workers' rights violations in 
other countries. I believe USMCA made some progress on that.
    But the United States, for example, in the solar panel 
sector, right now a lot of polysilicon is produced in western 
China in the Uyghur region, and there is a great deal of 
evidence that it is produced with forced labor.
    We don't want to be in a position of having to compete with 
that or have our workers compete with that. So it will take an 
all-of-government approach.
    But the way to succeed in manufacturing is to have workers 
partnering with businesses to make successful innovations and 
efficiencies that will make them more globally competitive and 
not to pursue that race to the bottom, which we will never win.
    Ms. Schakowsky. Thank you.
    Dr. O'Connell, are there other industrialized nations that 
have high labor standards that have thriving industrial bases, 
let me ask you, and are there any lessons that we can learn 
from those countries?
    Dr. O'Connell. Certainly. And I think it has been mentioned 
quite a few times, Germany has a very healthy wage for their 
manufacturing sector and has strategically managed their 
manufacturing sector.
    Most notably, they have invested considerably in sort of 
the global good for research and development that can benefit 
their small and midsize enterprises to ensure that they can get 
access to innovation and improving their manufacturing 
capabilities.
    Ms. Schakowsky. Thank you.
    I wanted to ask a question of Mr. Sills.
    The INFORM Consumers Act will require online marketplaces 
to verify third-party sellers and to disclose basic seller 
contact information. And I wanted to ask you your feelings.
    How do counterfeit and stolen products impact your 
business? And what harm is done then to consumers and to the 
vehicles that they have and the parts that they have?
    Mr. Sills. Thank you for the question.
    And there is really nothing new in our industry with a 
certain amount of counterfeit or substandard products coming 
into the market. Without a doubt, the acceleration of e-
commerce has accelerated the issue, provided easier access to 
the consumer to be able to procure substandard products.
    So the big issue for sure is that when we are dealing with 
safety-related items or to drivability issues, if a substandard 
product is able to find its way into a repair shop and onto a 
consumer's vehicle, it can have very detrimental effects.
    So beyond just harming the businesses of us professional-
grade, premium-quality manufacturers, it can absolutely have a 
detrimental effect on the consumer and truly highway safety.
    Ms. Schakowsky. Thank you so much.
    And I yield back and recognize Mr. Bilirakis for 5 minutes 
for questions.
    Mr. Bilirakis. Thank you. Thank you, Madam Chair.
    First, I want to reemphasize my sincerity and thanks to 
you, Madam Chair, for H.R. 4594, the Restoring Brand USA Act. 
Thanks for the agenda and the bill today.
    Of course, the bill reinvigorates our travel and tourism 
industry. While we don't have a witness here at the hearing, I 
will be submitting some questions for the record so that maybe 
some of the presenters can talk to their colleagues with regard 
to these particular private sectors and how Brand USA can 
benefit.
    The first question is for Mr. Sills.
    As I mentioned in my opening statement, the recently 
introduced INFORM Consumers Act, H.R. 5502, is a timely and 
sound piece of legislation that will protect consumers while 
they shop online, especially from malicious products or stolen 
goods.
    With the current supply chain shortages, have you seen an 
increase in counterfeit auto parts or stolen parts, such as 
airbags, being sold online in online marketplaces? And do you 
think this legislation, this particular legislation, will help 
curb proliferation of online sales of such items?
    Mr. Sills. Well, thank you for the question.
    While I don't have any hard data on there being an increase 
due to the supply chain disruption we have been seeing, 
certainly by virtue of the fact that it is getting harder to 
find products, reputable products on shelves, it is providing 
access to the counterfeit products and substandard products.
    Relative to the specifics of the bill, I don't have enough 
of the details to say how well it will address it. But I will 
say that supply chain disruption has opened some doors for sure 
to allow offshore importers to be able to gain access because 
the normal source of supply is currently unavailable.
    Mr. Bilirakis. That is unfortunate.
    Next question again for Mr. Sills.
    On a separate note, you may be aware of the recent Reuters 
report on the Biden administration recently approved the 
semiconductor technology licensing for Huawei--that is very 
troubling--China's blacklisted telecommunications company, to 
purchase this particular technology, the Huawei.
    This prompted me and 12 other Members of this committee to 
send a letter to the Secretary of Transportation inquiring on 
what implications this recent action will have on the U.S. 
automotive industry and the development of next-generation 
vehicles, such as AVs.
    You mention in your testimony millions of vehicles will not 
be sold in 2021 and 2022 because of the current semiconductor 
shortage.
    While I know your industry is not the only one hurting from 
this current shortage, are you concerned with the Biden 
administration's decision to prioritize semiconductors from 
Huawei when American industries, American companies, are not 
able to make ends meet?
    If you could comment on that, I would appreciate it, sir.
    Mr. Sills. I don't feel adequately informed on the Huawei 
issue. But what I would say is that semiconductor access is a 
major issue. And so anything that we can do to increase the 
source of supply.
    And really for my industry it tends to be more on the 
legacy chips, which I am glad to see that there is some 
emphasis on creating some increased capacity to be able to 
provide the types of chips that are used in some of the more 
legacy automotive products.
    But I believe that anything that we can do to ensure 
ongoing secure, robust supply is a positive certainly for my 
company.
    Mr. Bilirakis. Mr. Lincicome, do you wish to comment?
    Mr. Lincicome. Yes, thank you.
    So I also can't speak to the specific transaction or the 
national security determination for Huawei.
    But I do think it is important to note that, with respect 
to U.S. sanctions and semiconductors, that this is a fantastic 
example of some of the unintended consequences that can pop up 
from American industrial and trade policies.
    Because there is some evidence that overbroad primary and 
secondary sanctions on chips and chip-producing equipment to 
China have actually contributed to the current chip shortages, 
because Chinese firms have hoarded chips in response to U.S. 
sanctions, or they have been able to produce these low-end 
legacy bulk commodity chips, decreasing global supply. And 
these didn't have any really national security nexus.
    So certainly it is of course important from a national 
security perspective to deny potentially national security-
related products. But we do have to think, I think, be acutely 
aware of the potential blowback for the U.S. economy and for 
U.S. manufacturers.
    Mr. Bilirakis. Thank you very much.
    I will go ahead and submit the rest of my questions for the 
record.
    Thank you, Madam Chair. I yield back.
    Ms. Schakowsky. Thank you.
    The gentleman yields back.
    And now I recognize the chair of the full committee, Mr. 
Pallone, for 5 minutes of questioning.
    Mr. Pallone. Thank you, Chairwoman.
    I wanted to ask Mr. Paul. Globalization protectionist 
policies and market interventions by other countries have 
profoundly changed the global economic landscape. But how have 
these market forces affected our manufacturing sector and 
American competitiveness, if you will?
    Mr. Paul. Thank you for the question, Mr. Chairman.
    These--both broadly globalization and specifically some 
elements of it have had profound consequences for American 
manufacturing over the last two decades.
    Your own opening statement pointed out that our relative 
performance to other leading industrialized countries has 
declined. We find that in key sectors within the United States, 
as well, import penetration or the amount that we are dependent 
on imports to satisfy our domestic consumer demand has 
increased extraordinarily as well in things, again, that have 
strategic importance like semiconductors, photovoltaic cells, 
and many other--many other types of items and components that 
go into American manufacturing.
    Now, this is not a naturally occurring event. There were 
state interventions by the Chinese Communist Party to bolster 
its own industry and to prop up state-owned enterprises that 
are, in fact, opened by the state, or by subfederal entities to 
gain market share globally.
    That, in combination with a trade policy that was far more 
about liberalization than it was about enforcing the rules in 
the United States over a period of decades, led to some serious 
declines.
    These have been documented by economists at MIT like David 
Autor, at the New York Federal Reserve, and at Yale, a seminal 
study called ``The Surprisingly Swift Decline of American 
Manufacturing,'' that can all be traced back to this 
combination of globalization and then the rules that were laid 
out to do it.
    Now, there is a way to unwind some of this. It is not easy. 
There is no single solution. But first of all, having the 
intent to bolster manufacturing is important. And that does 
include public-private partnerships and smart and strategic 
investments in industries that are of importance for national 
security, as well as industries that we want to grow in the 
future as well.
    Mr. Pallone. Well, let me ask you on the same vein, Mr. 
Paul. I mean, obviously, you need--you think we need some 
targeted Federal investments to restore the market conditions 
necessary to improve our industrial sector. But so just comment 
on that.
    And then as an alternative, deregulation, or tax breaks. 
Will deregulation and tax breaks restore our manufacturing 
strength, or do we really need to have some targeted Federal 
investments? That would be my question.
    Mr. Paul. Thank you, Mr. Pallone.
    Well, we have some evidence. There were periods of 
deregulation and increased taxes during some administrations. 
The performance of manufacturing generally did not increase 
during those times.
    And what we have seen, however, that if we--if we can gain 
leverage in the global economy, if we are making smart, 
strategic investments in industries that have value chains and 
having those value chains concentrated in the United States, it 
makes a great deal of sense.
    The tax cuts that were passed in the last administration 
had a sugar rush for manufacturing. There is no question about 
that. There was some pent-up investment, but that got spent 
very quickly. And manufacturing employment was suffering, even 
before the pandemic took effect.
    Now, if we do chart a new course--and this is obviously 
beyond the scope of the committee here--but with respect to 
trade policy, along with the public-private partnerships and 
strategic investments that you are suggesting, we can certainly 
have a better outlook. And we can do this better. We don't need 
state ownership. We are more entrepreneurial than Germany, and 
we are flexible. And I have every confidence that we can gain 
some lost market share at the global level.
    Mr. Pallone. I only have 20 seconds. I was going to ask Mr. 
Sills if he wanted to share any thoughts, but there is only 15 
seconds left. Is there anything you want to say in 15 seconds, 
or 10?
    Mr. Sills. The clock is ticking, but what I would say is 
that I do believe that there are benefits that having a global 
supply chain, each region has some inherit benefits. And, so, 
it is a matter of optimizing and, as I mentioned in my 
preliminary statement, shifting as much here to North America 
but then taking advantage of the different markets and benefits 
that they have within the region rather than trying to force 
things into an area where it will always be difficult to be 
competitive.
    Mr. Pallone. All right. Thank you so much.
    Thank you, Madam Chair.
    Ms. Schakowsky. The gentleman yields back.
    And now I recognize the ranking member of the full 
committee, Congresswoman Rodgers.
    Mrs. Rodgers. Thank you, Madam Chair.
    Mr. Lincicome, I wanted to ask you about your testimony, 
because you referenced in your testimony that government-
directed industrial policies have often undermined the very 
objective that they seek to achieve. And, for example, you 
point to government subsidies of green technologies often 
crowding out the private investment.
    I believe that our approach needs to be to remove barriers 
that impede investment in American innovation and ingenuity, 
and lift the regulatory burden and continue to keep taxes low.
    I will note that, according to the Tax Foundation under the 
reconciliation package that is being promoted right now by the 
majority, our tax levels in the United States of America would 
become the highest--or the third highest, third highest 
corporate tax rate if that package is passed. Now, those are 
the funds that are being meant to pay for this manufacturing 
program.
    I wanted to ask you: How do you suggest that we address 
supply chain security and resilient manufacturing without 
resorting to this approach?
    Mr. Lincicome. Thank you, Congresswoman.
    You are right. I think it is right to be concerned about 
the tax code changes. Research shows, for example, that higher 
corporate taxes actually discourage innovation, and a lot of it 
falls on workers and consumers, not shareholders. But in terms 
of supply chain resiliency, I think the Federal Government 
should prioritize several things.
    First, we really need to remove the current legal and 
regulatory obstacles to companies' ability to access essential 
inputs and capital goods at globally competitive prices. This 
includes not only reforming tariffs and taxes but also taking a 
hard look at maritime labor and transportation regulations that 
make U.S. ports and logistics networks less flexible and 
efficient, thus exacerbating supply chain shops.
    In fact, I think Mr. Sills' is a fantastic example of a 
globalized company that needs more efficient access to these 
types of inputs.
    Second, the United States needs to reengage with the world, 
particularly with friends in the Asia-Pacific region but also 
at the World Trade Organization seeking to lower barriers to 
U.S. goods and services, and to provide those nations with a 
consumer and supply chain alternative to China.
    And, finally, I think we need to reform our domestic 
regulatory regime to make it easier for manufacturers to locate 
and invest here. Most notably, we need to examine closely our 
environmental regulatory regime. This is permitting and 
litigation under the National Environmental Protection Act, for 
example, which even the Biden administration itself has 
acknowledged has deterred or delayed indefinitely certain types 
of essential manufacturing and mining here.
    Do those things, not higher corporate taxes, and I think we 
might actually move the needle.
    Mrs. Rodgers. OK. Thank you.
    Mr. Sills, I appreciated in your testimony you pointing to 
the importance of us prioritizing policies like that would 
deploy artificial intelligence and autonomous vehicles. I thank 
you for being here with us today.
    A national framework for autonomous vehicles has been a 
priority for this subcommittee now for 3 years, and I believe 
it is very important that we are enacting legislation. And, in 
fact, this subcommittee--House passed legislation that was led 
by this committee several years ago now.
    But if we don't act quickly, we are going to cede this 
lifesaving technology and really the future of automobiles to 
China. And what that would mean for the United States is--would 
mean a loss of countless jobs, control of the autonomous 
vehicle supply chain, and the benefits that we would like to 
see for seniors and people with disabilities.
    So, as a business owner in the automotive sector ecosystem, 
would you speak to how we would be impacted in the United 
States if we failed to enact a national standard for autonomous 
vehicles, that framework that China wants to dominate?
    Mr. Sills. Thank you for the question.
    And we have [inaudible] the past 100 years in the world in 
automotive, not just from a manufacturing, design, development 
standpoint, but it is from the motoring public standpoint it is 
such a core part of how we operate as a country, is our 
transportation. And we are much more of a vehicle-based 
transportation country than many.
    So I do believe, fundamentally, it is very important that 
America maintains its position as a global leader. Certainly 
vehicle technologies is somewhat an inflection point, whether 
it has to do with electrification or a move towards autonomous 
vehicles or other significant advancements in transportation 
technologies. It would be a true shame, for sure, if we as a 
country ceded that leadership.
    So I think it is something that we need to look at all the 
different elements to make sure that we can continue to lead, 
remove those where we can, because it would, as I said, be a 
real shame if we were to cede this leadership.
    Mrs. Rodgers. Thank you. Thank you. I have more questions, 
but I ran out of time.
    I yield back. Thank you.
    Ms. Schakowsky. The gentlewoman yields back.
    And now I recognize Congresswoman Castor for questions.
    Ms. Castor. All right. Thank you, Chairwoman Schakowsky, 
for organizing this important hearing on American 
competitiveness and manufacturing. Thanks to our witnesses.
    Right now, all across America, clean energy and energy 
efficiency are saving consumers and businesses money. They are 
creating jobs. They are reducing pollution. It is clear that 
Americans will be demanding more efficient heat pumps, electric 
vehicles, solar panels, and more. And we want these products to 
be made in America.
    In the Climate Crisis Action Plan introduced last year, we 
identified a number of opportunities to accelerate clean 
energy, the clean energy transition and manufacture, clean 
energy technologies in the U.S., and ways to cut industrial 
pollution, all while securing more resilient supply chains and 
bolstering competitiveness.
    The good news for consumers and businesses is that clean 
energy actually saves a lot of money. A recent analysis by 
Vibrant Clean Energy found that a clean electric grid with 
expanded distributed solar and storage is $88 billion less 
expensive than business as usual.
    So cleaning up electricity is cheaper than doing nothing. 
But to secure this transition, we need to make these clean 
energy technologies here in America.
    Mr. Paul, several critical products, materials, and 
minerals--from lithium in electric vehicle batteries, to the 
steel in a wind turbine, to the polysilicon in a solar panel--
are key to the production of renewable energy. You mentioned 
one at the top in your testimony as well.
    How can supply chain resilience help ensure that the 
continued transition to lower-cost, renewable energy creates 
family-sustaining jobs and strengthens manufacturing in the 
U.S.?
    Mr. Paul. Thank you for the excellent question, 
Representative Castor. I appreciate it.
    The transition to clean energy is a very important one. 
There is no question that there are laudable goals from an 
environmental perspective to do it. There is also a jobs 
imperative as we make this transition. And I think for the 
average American, simply trading foreign oil for made-in-China 
solar panels is not the tradeoff they want to make.
    They need good jobs. If there are men and women who are 
working on the oil rigs who are earning a good union wage, they 
need to be offered a just transition to careers in clean energy 
that are going to be providing those good jobs as well.
    Now, some of those will be in installing, but many of those 
will be in manufacturing. And that is where the United States 
can possess extraordinary capabilities.
    We first invented many of these technologies a generation 
ago, and then we didn't build the demand here. We offshored 
much of the production. We lost that capability. With the right 
interventions, we can get that back.
    And part of that is the demand side. But part of that is 
through procurement, through tax incentives, and through other 
measures that will drive investment into this sector. And we 
know it is possible. We can be successful in this.
    And in addition to the critical materials that you're 
talking about, including some rare earth, some lithium, there 
are very basic materials that go into these as well. There are 
thousands of tons of steel in wind turbines. There are 
extraordinary amount of tonnage of metals in solar panel 
installations, as well.
    And the more the supply chains are based in the United 
States, the better it is for the jobs outlook for us. It makes 
no sense to build a clean energy economy on the backs of forced 
labor from the Uyghur population in China, but that 
unfortunately is the model that could take shape unless we take 
drastic steps to shape this in a way that is going to advantage 
workers in the United States.
    Ms. Castor. Well, I agree. There is no reason we should be 
seeding our manufacturing base in these important technologies 
in China and other countries, but we have got to top sensible 
supply chain and resiliency provisions to help give it a push.
    Mr. Sills, there is a lot of excitement among American auto 
workers, the American auto manufacturers, about the new 
electric vehicles. I mean, this is what the wave of the future 
is going to be. There is a very significant competitiveness 
issue because we want to be the world leader on electric 
vehicles, buses, transit vehicles as well.
    But we have to keep--be mindful of the supply chains and 
how they are going to change over time. There were a couple of 
recent great announcements in Tennessee and Kentucky on new 
manufacturing plants.
    But what do you recommend here for the automobile 
manufacturing sector building and maintaining the competitive 
advantage for EVs and their components?
    Ms. Schakowsky. I am afraid he is going to have to answer 
that in writing because the gentlewoman's----
    Ms. Castor. Thank you. I yield back.
    Ms. Schakowsky [continuing]. Time has passed.
    And now let me recognize Mister--and how time flies--to Mr. 
Upton for his 5 minutes.
    Mr. Upton. Thank you. Thank you, Madam Chair. Thank you.
    As the--I got the wrong--you are looking out my window 
here. Well, you are looking at my bird feeder. There. I got it. 
I got it. A beautiful day here in rainy southwest Michigan.
    I think you have got me now. Come on there. It is a 
beautiful day in rainy, southwest Michigan.
    As the--first of all, thanks for the hearing. And as the 
top Republican on the Subcommittee on Energy, where many of our 
discussions have focused on the new technologies and sources of 
energy that we need to use, in many of those discussions we 
have talked about the materials that we need and the supply 
chains that are required to obtain those very materials, it is 
certainly most critical.
    I introduced H.R. 1599, Securing America's Critical 
Minerals Supply Act, last April, which focuses on critical 
minerals and securing American energy. The legislation is going 
to require the Department of Energy to conduct assessments of 
and secure any energy resource that is essential to the U.S. 
and has a vulnerable supply chain.
    So, Mr. Lincicome and Dr. O'Connell, what role should we 
see from the Department of Energy, which has subject matter 
expertise on the critical materials that supply our Nation's 
energy infrastructure? What role should they play in securing 
our critical supply chains, particularly as we look at--and I 
know that Ranking Member Cathy McMorris Rodgers mentioned this 
from the Chinese Communist Party. What are some of the things 
that we need to do?
    Mr. Lincicome. Please, Caolionn.
    Dr. O'Connell. So, from a national security perspective, I 
think an important aspect of critical minerals is understanding 
sort of our time-to-survive and time-to-recover metrics, 
meaning time to survive--how long can we consume our strategic 
reserves of critical materials, given an environment where 
let's say we are at war, and guarantee that access?--and then, 
what is the time to recover as in pivot to another location or 
another supplier for those minerals?
    Some of these minerals are just manufactured and produced 
in certain countries, and there is no way around it. Niobium in 
Brazil is a big example of that, where Chinese state-owned 
enterprises have invested in those mines in Brazil for niobium.
    So we need to have a policy in place for assuring that we 
have access to the minerals that we need for the essential 
products that rely on those.
    Thank you.
    Mr. Upton. So would you say this is a more of Department of 
Commerce role, or Department of Energy? Are we seeing real 
cooperation between those?
    Dr. O'Connell. I do not know the extent of cooperation 
between Commerce, Energy. I think there is an element of DoD in 
there. USGS is also an element. I mean, this is--this requires 
multiple agencies to engage and understand the need to then 
make sure that we have resilient supply chains, given the 
various circumstances we can imagine confronting.
    Mr. Upton. Thank you.
    Mr. Lincicome. Thank you, Congressman. I would just add a 
few things.
    First, I think the Government has a role in stockpiling, 
for sure, in terms of assuring adequate domestic supplies in 
times of national emergency or whatever.
    Second, though, I mentioned before and I will mention it 
again: The domestic regulatory environment is really essential 
when it comes to the domestic production of critical minerals. 
Again, looking at something like lithium, for example, the 
Biden administration's own supply chain report started looking 
at foreign sources for lithium in the near term, because 
environmental regulation in the United States is quite onerous.
    And it is not just NEPA litigation, but also simply 
permitting process, which is longer than in developed countries 
like Australia and Canada, for example.
    And that gets to the third point. We really should examine 
international partnerships with close allies for critical 
minerals, Canada and Australia being excellent examples of 
that. We have a long history through the NTIB and other 
programs of creating domestic, defense-related supply chain 
resiliency with our close allies. And that is something that we 
should, I think, expand and that, I think, past legislation, 
like the NDAA last year, actually looked to do that.
    Mr. Upton. Well, thank you both.
    And, Madam Chair, I would like to submit the testimony of 
Dr. Michelle Foss of Rice University before the Energy 
Subcommittee on the critical mineral supply chain for the 
record.
    And with that, I yield back the balance of my time. Thank 
you.
    Ms. Schakowsky. Without objection.
    [The information appears at the conclusion of the hearing.]
    Ms. Schakowsky. And now I recognize Mr. McNerney for his 5 
minutes of questions.
    Mr. McNerney. Well, I thank the Chair.
    This is really a timely and important hearing as we are 
seeing in our shelves in our stores get emptied and people 
worried about the holiday season, but it goes much deeper than 
that. It is a national security issue. The supply chain gaps 
can't be addressed if they aren't identified or addressed, but 
many of our supply chain vulnerabilities go ignored until a 
crisis emerges. And that is really sort of human nature.
    Dr. O'Connell, in your testimony, you discussed the 
complexities of globalized supply chains. Are the private firms 
and the Federal Government effectively identifying supply chain 
vulnerabilities?
    Dr. O'Connell. I would argue that most--so the Federal 
Government has insight into the primary contracts and some 
degree of insight into their subcontracts. Same with private 
firms. They know who they do business with, who their primary 
suppliers are. And they might have some insight into their tier 
2 subcontracts.
    But without a comprehensive understanding of the 
interrelationships, and really interconnected world and global 
economy, I think we have accepted risk in places that maybe we 
haven't appreciated.
    Mr. McNerney. Thank you.
    Mr. Paul, should the Federal Government play a more active 
role in monitoring critical supply chains so we can identify 
the vulnerabilities before they become a crisis?
    Mr. Paul. Mr. McNerney, thank you for the question.
    Yes, it should. It is doing so in some cases. The 
Department of Defense, again, has some emphasis on it. But it 
does have limitations. Those limitations are compounded by 
commercial off-the-shelf requirements and other sorts of things 
that make supply chain tracing a little more difficult.
    I think that there has been more attention on a bipartisan 
basis paid to this recently, beginning with the last 
administration and carrying into the Biden administration with 
the Supply Chain Task Force as well as the supply chain 
Executive order that have been established to look at four 
absolutely critical technologies, and then to broaden the scope 
a little bit. I think that that information will be valuable.
    I will also say that some of that already exists. We 
published records written by former Governor and Homeland 
Security Secretary Tom Ridge in 2012 and by retired Brigadier 
General John Adams in 2013 about significant supply chain 
vulnerabilities with respect to goods that are critical for 
Homeland Security as well as to national security. We presented 
those findings to the Obama administration, to the Trump 
administration, and as well as to the Biden administration. We 
are pleased that this attention has been paid. I think that is 
the first step.
    The second step is to get solid recommendations and then to 
take action that will both secure the supply chains, to 
encourage the reshoring of those that we deem feasible to do 
so, and to make some progress on this, because the pandemic was 
not a one-off. We know that we can expect black swan events in 
the future. We just don't know what form they are going to 
take, but we need to be prepared for that.
    Mr. McNerney. So we should have seen this coming then?
    Mr. Paul. In many ways, yes. I mean, our systems run on 
just-in-time inventories, on very, very fragile globalized 
supply chains that depend on everything going absolutely right 
all the time. And we don't build in either the redundancies, 
the stockpile, or the types of flexibility that we need when 
things aren't going right.
    And that can appear at any time through a natural disaster, 
through a global health crisis, through some political risk or 
military risk that is established. We haven't done a great job 
of mitigating against those, no.
    Mr. McNerney. Well, thank you.
    Mr. Sills, thanks for your testifying this morning. Could--
well, this morning in California. Could the supply chain 
resilience of domestic manufacturing improve if the Federal 
Government played a more active role in monitoring the current 
supply chains and identifying vulnerabilities?
    Mr. Sills. Thank you for the question.
    And the notion of better visibility through monitoring 
superficially, of course, sounds great. But the devil is in the 
details. It is going to depend on the quality and, frankly, the 
timeliness of the data. And so I think it will be effective if 
you wanted to look more towards the future.
    So, for example, if we had been monitoring the 
vulnerability of microchips 3 years ago, maybe we would have 
been able to do something. But if it only hit the radar 9 
months ago when we started to be in short supply, it would not 
have been something that was going to be particularly 
actionable.
    So I think a lot depends on the quality of the data and the 
timeliness and the usability of the data. I also think it is 
important to recognize that there are a lot of 
interdependencies in the supply chain, and to monitor just one 
link in the chain and ignore the interdependencies could 
actually lead to some misleading information.
    So, for example, if we spent all of our time worrying about 
the ports but didn't think about container availability or 
drivers to take product away from the ports, you are only to 
going to be monitoring one chain in the whole link--one link, 
and the whole chain could fall.
    Mr. McNerney. Thank you.
    My time has expired, but I was going ask Mr. Paul to answer 
in writing if he thinks the legislation we are considering 
today would have mitigated some of the problems we are seeing 
in our supply chain. Thank you.
    I yield back.
    Ms. Schakowsky. The gentleman yields back.
    And now I welcome Mr. Latta for his 5 minutes of 
questioning.
    Mr. Latta. Well, thank you very much, Madam Chair. I really 
appreciate it.
    And thanks to our witnesses for being with us today. And I 
am very proud of the fact that, according to the National 
Manufacturers' latest numbers, I have 86,000 manufacturing jobs 
in my district.
    Recently Peloton, which is, of course, the exercise bike 
company, is going to be building their first plant in the 
United States in my district. And there will be about 2,200 
jobs.
    And then First Solar, which is the largest solar panel 
manufacturer in the Western Hemisphere, also is breaking ground 
to expand their facility. And that is going to add about 500 
employees. So we have a lot going on in northwest Ohio.
    Mr. Lincicome, if I could ask you a couple of questions 
here. The United States is the top designation for global 
manufacturing investment. One of the pieces of legislation we 
are considering today is Mr. Pence's Global Investment in 
American Jobs Act. It would enhance America's competitiveness 
on the global stage for direct--or foreign direct investment, 
FDI, and reduce barriers to investment.
    How can encouraging FDI create stronger supply chains and 
allow U.S. manufacturers to make more--make them more globally 
competitive products right here in the United States?
    Mr. Lincicome. Thank you, Congressman.
    I totally agree that FDI is a--should be a priority. 
Studies show that foreign direct investment in the United 
States not only boosts the manufacturing in other industries in 
which these companies invest, but actually benefits the 
surrounding communities and the surrounding companies as being 
potentially input suppliers or servicing those companies.
    Foreign-owned companies in the United States tend to pay 
more, tend to trade more, tend to do all the--and have these 
established supplier networks and knowledge that, I think, can 
actually boost supply chain resilience.
    So you mentioned First Solar as a German company. That is 
really a great example of that. You mentioned Peloton as well. 
These are companies that have a global footprint. And, of 
course, they have domestic production and domestic jobs. But 
they also demand on access to global inputs and global work, a 
global workforce.
    And so, to the extent that the United States can remove 
regulatory and other barriers to foreign investment, including 
trade barriers, giving these companies access to the raw 
materials, inputs, and workers they need is, I think, an 
excellent, excellent endeavor.
    Mr. Latta. Well, and First Solar is a very interesting 
company because it was formed by three individuals right here 
in my home county. And it is a great story of American 
ingenuity and investment right here in our own backyard.
    But you bring up a point that I have heard from a lot of 
different companies that are looking at committing to the 
United States. One of the things they say is that, when our 
energy costs were lower--unfortunately, we were seeing them go 
up in this past year--that they looked at the United States as 
great place to come because of the energy that we have to 
offer.
    But also, Mr. Lincicome, we all know that with COVID 19 
pandemic it stressed--it has really stressed our global supply 
chain. And we learned areas where it can be strengthened. 
However, the U.S. manufacturing sector stepped up to the plate 
and met increased demand quickly and efficiently. This is like 
Spartan Chemical, which is also in my district in Maumee, Ohio, 
increased production, invested in new product capabilities to 
get cleaning supplies out for businesses and consumers, 
especially at the height of the pandemic.
    How would regulatory barriers and government mandates 
prevent manufacturing industries from responding to future 
supply chain stocks?
    Mr. Lincicome. It certainly prevents--creates an 
impediment, Congressman, because it denies these ability--these 
companies the ability to adapt on the fly. What really is 
essential for our domestic, legal, regulatory tax regimes is 
maintaining or maximizing flexibility and adaptability in times 
of whatever shock comes down the road, because we really never 
know. Your shocks happen pretty often in the supply chain, and 
you never know what the next one is going to be.
    And, in fact, I mentioned that USITC report from December 
of last year, and it said that in the medical goods space, one 
of the primary complaints for domestic manufacturers was having 
to try to navigate existing rules and regulations for certain 
types of medical goods.
    Now, look, of course, product safety is important. But at 
the same time, there has to be a consideration of how these 
types of regulations really inhibit our manufacturers from not 
only adapting but from competing globally with manufacturers in 
China or anywhere else.
    Mr. Latta. Well, thank you very much.
    Madam Chair, my time is about to expire. And I will submit 
my last question to the witness as we go forward. So thank you 
very much.
    I yield back.
    Ms. Schakowsky. Thank you. The gentleman yields back.
    And Mr. Cardenas, you are recognized for 5 minutes.
    Mr. Cardenas. Thank you, Chairwoman Schakowsky and Ranking 
Member Bilirakis, for having this important meeting.
    I just want to emphasize that we can't have a strong supply 
chain without the right workforce, and I have been engaged as a 
former small business owner myself. I was not a manufacturer, 
but I respect and appreciate that southern California is one of 
the manufacturing juggernauts of the world, even though it is 
only a small--a subset of the State of California. We are 
dominant because of the workforce that we have. But this 
workforce is not matching today's environment.
    That is why I make sure that I am constantly in touch with 
the manufacturing associations, manufacturers in my district. 
And I have actually brought them together with high schools and 
community colleges to make sure that they actually learn from 
each other and realize that there are jobs out there right now, 
good-paying jobs, that are not being filled, because we have a 
mismatch problem.
    On any given day in America--anybody can look at the 
statistics. On any given day in America, there are just as many 
Americans looking for a job as there are job openings, give or 
take, about the same. But what we have is a mismatch problem. 
And that means we have people looking for work, but they are 
not matching well with the jobs that are being offered today.
    That is why I think it is very important that we make sure 
that at every level--at the local level, the State level, and 
the Federal level--that we recognize that we need to right-size 
what we are teaching in our schools, how we are educating 
people, et cetera, for the jobs of today and tomorrow.
    For example, I have the Expanding Opportunity through Pre-
Apprenticeships Act. The bill provides grants to serve 
participants from nontraditional apprenticeship populations, 
with preference to women, people of color, veterans, those 
impacted by the youth or adult criminal justice system, and 
individuals who have barriers to employment. These are the 
kinds of things that we can and should do.
    A great country to look at in this manner is Germany. 
Germany is very innovative. Like America, we are very 
innovative. But if we don't pay attention to down-line issues, 
we are going to have a mismatch. And we are going to have a lot 
of activity that is waiting to happen, but we don't have people 
to fill those jobs that are going to create that activity.
    So, Mr. Sills, can you describe the challenges your company 
has faced when it comes to recruiting or hiring or retaining 
workers? And how does the--how do these challenges affect your 
manufacturing and your competitiveness?
    Mr. Sills. Thank you for the question, Congressman. And 
it--very well said. Your entire remarks are what I live all day 
long. There is that mismatch of those who are looking for work 
and the types of work that is being made available, and some 
does have to do with workforce development and training, and 
making sure that America's youth are coming up with the right 
skills for the jobs of the future. And we do, as a country, 
need to address that.
    There is even a matter of today's current workforce, 
deciding what type of work that they are interested in doing. 
And there are no easy answers. I think that we need to look at 
all options to make sure that we are encouraging, first of all, 
everybody to enter the workforce, and then to provide good 
opportunities with good career growth so that we can grow it.
    But you are right. We have openings in every level of our 
organization, from the simplest unskilled order filler in the 
distribution center up to engineers and IT folks and business 
analysts. And there is just--there is a shortage.
    If you go downstream two levels in my industry's channel 
where you are at the independent repair shops, there is a huge 
shortage of automotive technicians. And it is a wonderful 
career. It could be a six-figure career. But it still has the 
reputation of America's youth of being a mechanic, of being a 
grease monkey. But it is being a technician of a very 
sophisticated computer.
    How do we overcome that? How do we get more people who are 
interested in associate degrees and vocational training? This 
is a major issue for America, and you ask all the right 
questions. I don't have the right answers.
    Mr. Cardenas. OK. Well, thank you for doing what you do 
every single day and putting people to work and moving our 
economy in the private sector.
    And I think government does have a role. I think that we 
should make sure that we enhance our apprenticeship programs. 
Again, I think Germany does that incredibly well. So they have 
a better right-size fitting for their populace and what is 
going on in their economy.
    Mr. Paul, do you believe that apprenticeship programs could 
be improved in our country?
    Mr. Paul. I absolutely do. I identify myself with your 
remarks and those of Eric Sills as well, and I will be happy to 
answer in a lengthier form, I guess in a written submission, as 
I know we are out of time.
    Mr. Cardenas. Thank you so much.
    Madam Chairwoman, I yield back. Thank you.
    Ms. Schakowsky. I thank you so much.
    And I now recognize Mr. Guthrie for 5 minutes.
    Mr. Guthrie. Thank you, Madam Chair, for the recognition. I 
appreciate it.
    And one of the great announcements that was mentioned 
earlier for manufacturing is BlueOval SK, which is Ford Motor 
Company, they are going to put their gigaplant--it is going to 
be twice the size of the Tesla gigaplant--in Kentucky. So we 
are all excited, and my district is excited to have them here.
    Mr. Lincicome, I was--it is good that we are, as much as we 
regret not being in person, being in our districts before we 
have these hearings. It is helpful this morning.
    I was at a manufacturing plant and talking to a logician, 
and he was talking about the issue with California isn't just 
the 30 or 40 days it takes to unload the material. And 
hopefully yesterday, the President meeting with some people to 
get some of the work rules straightened out so we can get our 
ports more productive.
    And he said it is not just the lack of truck drivers. He 
said that is a problem. He said, ``But I can hire trucks to go 
pick up my stuff.'' He says what takes about 30 to 35 days to 
get stuff off the ports is California--different than 49 other 
States--have truck regulations, that, ``I can find a truck 
driver with a truck that is willing to go pick up my stuff. But 
a truck that you can drive in 49 other States, you can't drive 
into California.''
    And also, we talked about German manufacturers as well. You 
won't hear this from multinational business leaders in Germany. 
But if you have access to talk to German middle-level 
manufacturers, family businesses, people--probably businesses 
like Mr. Sills operates--in Germany, if you are able to talk to 
them, they are terrified of what is going to happen this winter 
with the cost of energy prices because the decisions that the 
German Government has made to go to a certain level of 
renewables when the technology is not there to do so. And they 
are really--these are real fears that are coming from German 
business leaders.
    So, Mr. Lincicome, have you heard about the issue with not 
truck drivers, just the type of trucks? And as we as a Congress 
are debating some things moving forward, all of us on this 
committee, Republicans and Democrats, want better and more 
manufacturing because it produces the best jobs.
    And I am for more apprenticeships with Mr. Cardenas, as we 
talked about. But the problem is, we are going to do other 
things that are going to counter the ability to manufacturer in 
this country.
    Would you like to talk about the environmental 
requirements? We want a cleaner environment. But just throwing 
out arbitrary standards is going to--there are some German 
businesses that are really terrified about their ability to 
survive this winter.
    Mr. Lincicome. Thank you, Congressman.
    Yes, I think, even for a Libertarian like me, I think there 
is, obviously, I can say there is a role for the Federal 
Government ensuring that we have efficient cross-State border 
trade as well, and that regulatory impediments in one State 
don't prevent the free flow of interstate commerce, which is 
perfectly a constitutional authority in the Federal Government 
to examine.
    I would note, however, also that, in the truck situation in 
the United States, we are having a chassis shortage of sorts, 
which--chassis are what trucks hook up to. You put the 
container on the back of the chassis. Well, one of the reasons 
why we have this chassis shortage is we have imposed 220 
percent tariffs on chassis from China, which is the largest 
producer.
    Now, China, we can have our significant concerns about 
Chinese subsidies in the West. But the problem is that U.S. 
trade remedies law doesn't allow us to consider in any way, 
perhaps pause--at least pause during the shipping crisis--these 
types of tariffs.
    And truckers and logistics pros that probably haven't slept 
in 18 months routinely mention the chassis shortage and these 
tariffs affecting the situation.
    And so this, again, is why I caution that, while 
nationalist policy sounds great, it sounds easy to protect, 
subsidize workers and industries, but when you--the devil, as 
Mr. Sills said, is in the details. And occasionally, you can 
end up--quite often you can end up doing more harm than good in 
these areas.
    Mr. Guthrie. I want to talk about--you mentioned, Mr. 
Lincicome, foreign direct investment. We have to be careful 
with that2, because Toyota Camry is an American-built car, it 
is a Kentucky-built car. It is not in my district, but a lot of 
suppliers are. So would you talk about foreign direct 
investment with nations that share our values, and we have to 
continue to work together on that as well?
    Mr. Lincicome. Most definitely. You know, the United States 
remains one of the largest destinations for FDI in the world. 
But the--to continue that top ranking, we really need to 
consider how our trade, regulatory, and other tax environments 
might discourage companies from locating here.
    You know, you mentioned automotive. The South, of course, 
has had an explosion of automotive jobs and automotive plants 
over the years. But a lot of those foreign-owned companies 
depend on having unfettered access to other markets in either 
Japan or Europe or Mexico and Canada. And to the extent that 
government policy starts to thwart those types of voluntary 
cross-border transactions by companies, then people aren't 
going to invest here as much. And that is going to impact our 
jobs.
    Mr. Guthrie. Yes, thanks for that answer.
    My time has expired.
    Madam Chair, I yield back.
    Ms. Schakowsky. The gentleman yields back.
    Mr. Guthrie. Thank you.
    Ms. Schakowsky. And now I recognize Congresswoman Dingell 
for her 5 minutes of questions.
    Mrs. Dingell. Thank you, Chairwoman Schakowsky, for holding 
this important hearing--this subject is one of the most 
important ones to me in this year--and to all of you for 
testifying today.
    The COVID-19 pandemic has laid bare the significant 
vulnerabilities in our domestic supply chain, and I think we 
all are recognizing it is crucial we take immediate steps to 
address these issues. But this unprecedented crisis has 
reverberated across almost every sector of our economy and 
continues to impact American workers and consumers every day. 
From medical supply challenges that we saw during the pandemic 
to the ongoing semiconductor shortage, it is clear hardening 
our domestic supply chain is as much a national security issue 
as it is an economic issue.
    I want to discuss direct measures to assure the security 
and resilience of our domestic supply chain, although I can't 
follow my colleague and friend, Mr. Guthrie, and not say I am 
happy the auto companies are staying here. It was sad to lose 
some of them to Kentucky and Tennessee.
    And, Mr. Lincicome, I appreciate your comments, but the 
fact of the matter is other countries really do support their 
industries, and it is important that our industries be 
supported by government too.
    So the backbone, I think, of the American manufacturing is 
the automobile sector. And we have all seen the devastating 
impact the semiconductor shortage has had on automotive 
manufacturers and their suppliers. This chip shortage has dealt 
a huge blow to autoworkers in districts like mine that have 
significant numbers of auto-related jobs, not to mention 
negative impacts on consumers across the country.
    You may be familiar--all of you may be familiar with the 
CHIPS Act funding passed in the Senate, which includes $2 
billion for semiconductor chips used by our auto industry. Over 
the past year, I keep raising the critical importance of 
improving this funding, and I have introduced identical 
legislation in the House.
    Mr. Sills, can you provide your thoughts on how funding in 
the CHIPS Act to increase American production of semiconductors 
would help support American manufacturing?
    Mr. Sills. Thank you for the question, Congresswoman.
    And I believe I did speak to it briefly earlier in this 
meeting that our industry is highly reliant on the--that older 
CHIPS Act that the $2 billion as part of the CHIPS Act.
    Mrs. Dingell. Legacy. Legacy. I hate the world ``old.''
    Mr. Sills. Me too, me too. The legacy chips.
    And we have been dealing with the significant shock of 
having shortages. As everyone is well aware, it has new 
vehicles, mostly manufacturing, now sitting on lots, waiting to 
be finished because they don't have access to the chips. And 
that is devastating to the industry.
    But it is also very harmful to the consumer who, as I said, 
needs the vehicle. It has caused increased pricing in used 
vehicles because they can't get the new vehicles. And it has 
created a surge in demand for maintenance of the existing 
vehicles because that is, again, how people go about their 
daily lives.
    So it was definitely laid bare through this the importance 
of having stable and secure supply of these legacy chips. And 
so anything we can do to secure that, I think, is very 
beneficial not just to the industry but to the American 
consumer.
    Mrs. Dingell. Thank you, Mr. Sills. I am going to ask you 
to talk in writing to expand upon that and why supporting 
that--supporting it matters.
    But let me move to another issue. I have got 1 minute left. 
Critical shortages of critical products during the COVID-19 
public health crisis demonstrate that the private sector alone 
can't identify, monitor, and address supply chain 
vulnerabilities.
    The Biden administration's comprehensive supply chain 
review found that focusing on maximizing capital returns has 
led to the private sector's underinvestment in long-term 
resiliency. That underinvestment led to a declining share of 
corporate income going into R&D, new facilities, or resilient 
production processes.
    Mr. Paul, do you agree with the Biden administration's 
assessment that the private sector has not appropriately valued 
supply chain resilience and it is why we are in the mess we are 
in?
    Mr. Paul. Absolutely, Representative Dingell, I completely 
agree with it. I look forward to the supply chain work that the 
White House is doing as it continues, but you have hit the nail 
on the head. The incentives that are built into our system, 
particularly for manufacturers, which is capital intensive and 
which may have a lower rate of return for shareholders, 
particularly for things like supply chain resilience, is 
especially vulnerable because of the financialization of our 
economy.
    That is why there is a role for the Federal Government to 
help provide the right kind of incentives and markets so that 
we can develop more resilience. There has been a market 
failure, and it does need to be addressed.
    Mrs. Dingell. Madam Chair, I am out of time. I have many 
more questions, so I will be submitting them for the record. 
Thank you.
    I yield back.
    Ms. Schakowsky. The gentlewoman yields back.
    And I now recognize Mr. Soto for 5 minutes.
    No, I am wrong. I am sorry. Excuse me.
    Of course. Congressman Bucshon for 5 minutes. Excuse me.
    Mr. Bucshon. Thank you, Madam Chair.
    Ms. Schakowsky. Sorry.
    Mr. Bucshon. Thank you for holding this legislative hearing 
on ways to strengthen and support American manufacturing and 
competitiveness.
    In 2019, the year prior to the pandemic, Indiana 
manufacturing formed the backbone of the State's economy, 
accounting for over 17 percent of the jobs in the State and 
exporting over 38 billion in goods, ranging from automobiles to 
pharmaceuticals, around the globe.
    However, since the beginning of the COVID-19 pandemic, I 
have heard from manufacturers, businesses, and consumers across 
Indiana, as many of you have in your States, about various 
supply chain shortages and their impact on businesses and 
communities, whether it was the inability to purchase toilet 
paper at the store early on, or a Toyota plant in my district 
having to temporarily halt production just last month. So this 
is a big issue, and I am glad we are having this hearing.
    Mr. Lincicome, given these struggles, do you believe 
businesses will be incentivized to voluntarily share the types 
of information advocated for in some of the bills before the 
committee today without the presence of strong liability 
protections?
    Mr. Lincicome. It is a great question. I don't know, 
Congressman.
    Quite frankly, I left the law behind when I joined Cato a 
few years ago. But I can say that we already have some 
indications that companies are extremely hesitant to share 
proprietary supply chain information with the Government 
without really strong protections, not merely on the liability 
side but on the business confidential information and 
proprietary nature of this.
    You know, back a couple of years ago, when the Trump 
administration was investigating automobiles under--for 
national security purposes, automakers across the United States 
were extremely concerned about divulging this type of data.
    And so, to the extent that supply chain transparency and 
the Government sees a role there, it is really going to need to 
get multinational manufacturers comfortable with sharing this 
type of information and on their business practices, which are, 
of course, highly proprietary.
    Mr. Bucshon. Yes, I would agree. And I think that that is, 
unfortunately, going to be a big hill to climb, because 
proprietary information on not only their supply chain but the 
rest of the way they run their businesses is going to be a 
challenge.
    I am also glad we are considering measures to ensure 
American competitiveness in hard-hit industries like travel and 
leisure, with bills such as the Restoring Brand USA Act that I 
cosponsored.
    Known as the crossroads of America, Indiana has a thriving 
travel industry with designations including, of course, the 
Indianapolis Motor Speedway, home of the Indy 500, the Indiana 
Dunes National Park along the shores of Lake Michigan, and 
Holiday World in Santa Claus, Indiana, and numerous local 
festivals that attract millions of visitors annually, such as 
currently ongoing Parke County Covered Bridge Festival.
    Holiday World, for example, a theme park in my district, is 
a prime example of supply chains and sectors besides 
manufacturing have also been majorly impacted over the 
pandemic. In the times that has even been allowed to operate--
at times they have been allowed to operate during the COVID, 
the park has struggled to fill open staff positions. And 
lodging and travel costs increased, partially due to their own 
supply chain woes.
    Additionally, replacement parts for vehicles and roller 
coasters have become unpredictable and difficult to source, 
while food and beverages are more expensive and still suffer 
from major shortages. And as we have more inflation, this gets 
worse.
    As Congress is looking for ways to secure and support our 
supply chains, we must keep in mind the lodging and tourism 
industry and keep them competitive, as guests are finally 
making their way through the parks and resorts thanks to quick 
work distributing a safe and effective vaccine.
    Mr. Lincicome, what work can Congress do to show 
establishments like Holiday World in southern Indiana, who we 
really failed to provide substantial relief for during the 
pandemic due to the high number of seasonal workers they have 
that were factored into that equation--what can we do to work 
towards showing this type of industry that we are there to help 
possibly, with the supply chain issues they are facing not 
only--this isn't just manufacturing, as they get their feet 
back on the ground after the pandemic?
    Mr. Lincicome. Thank you, Congressman.
    I now really want to take my daughter to Holiday World.
    Mr. Bucshon. You should.
    Mr. Lincicome. She would love it, I am sure.
    In terms of the specifics of the tourism industry, I really 
can't speak to that. But what I can say is that, to the extent 
that American companies in that industry are reliant on access 
to imports, whatever it is, I think the Government really has a 
role to ensure that that access is available.
    An example, I think, is the section 301 exclusion process 
that has been shut down and just restarted that a lot of 
American companies in services and elsewhere really need to 
utilize so they can get the stuff they need to keep business 
open.
    Mr. Bucshon. Thank you very much.
    Madam Chairwoman, my time is expired.
    I yield back.
    Ms. Schakowsky. The gentleman yields back.
    Now I recognize Mr. Soto for 5 minutes.
    Mr. Soto. Thank you, Madam Chair.
    We are at a crossroads with American manufacturing. We have 
the opportunity to change our trajectory, to boost domestic 
manufacturing, and stop this manufacturing decline, especially 
in areas of strategic and national security interests.
    In central Florida, my constituents are ready to work. We 
have production jobs that constitute about 13 percent of what 
we do here in Florida's Ninth Congressional District, such as 
aerospace defense and boat manufacturing in east Orange County, 
beverage manufacturing in Polk County, including the largest 
manufacturing plant in North America. And we just started 
making microchips in Osceola County.
    So passing the bills that we are hearing on the agenda 
today will make critical investments in places like central 
Florida to boost domestic manufacturing, fix supply chain gaps, 
and protect production of critical national security, areas 
like medical supplies, communications, defense, microchips, and 
other tech products.
    And as for central Florida's top tourism industry, we 
rebounded fairly steady, boosted primarily by domestic tourism. 
We have tourism attractions such as Disney World, Universal, 
SeaWorld, Legoland, and others. You may have heard of them. And 
for a full recovery bill, we need to have international travel, 
as well, rebound.
    So we applaud the Biden administration for ending the 
pandemic-travel bans for Canada, Mexico, Europe, Brazil, India, 
China, South Africa, and other areas over the next few months. 
This will greatly help.
    But the committee needs to go further, which is why I agree 
with my fellow Floridian, the ranking member, Gus Bilirakis, 
that we must support the Restoring Brand USA Act to make $250 
million in unobligated funds available for Brand USA travel 
promotion.
    Thank you, Madam Chair, for agendaing it today.
    Mr. Paul, you had some interesting initial conclusions. We 
have our goals of boosting manufacturing and having a just 
transition to a green economy. And you mentioned that 
deregulation tax cuts aren't the only things that we can do to 
get there. It is going to take targeted investments and key 
industries.
    We saw the Senate pass the U.S. Innovation and Competition 
Act. Eighteen Senate Republicans voted for that bill, along 
with 50 Democratic Senators. So, while it is a surprise for a 
few of our colleagues on the other side of the aisle to 
criticize it, obviously, it has got overwhelming bipartisan 
support. And this is the House's shot at this.
    We see the Supply Chain Health and Integrity for the Nation 
Act, Manufacturing Economy and National Security Act, Building 
Resilient Supply Chains Act, Supply Chain Security and 
Resilience Act.
    Are bills like this the kind of targeted investment that 
you are referring to, to help give a lift to domestic 
manufacturing?
    Mr. Paul. Congressman Soto, thank you so much for the 
question. Yes, they are.
    And I will say--and I will say this as someone who worked 
in the House of Representatives some time ago--that I wouldn't 
defend the wisdom of the Senate in every case, or rarely. But 
in this case, it was a product of they compromised. There were 
a number of--number of extraordinary individuals who came 
together to make that happen. I have confidence that the House 
can do the same thing.
    I do think that it fulfills a need. And I think that is the 
important thing, that there is this demonstrated market failure 
in semiconductors and that there is this need to bolster our 
supply chains and to make them more resilient and, when 
possible, to reshore more of them to provide well-paying jobs 
for future generations as well.
    And so, this is not legislation that is in search of a 
problem. I want to be clear about that. This is legislation 
that has been introduced with some intent, and that is to 
ensure that the manufacturing sector in the United States, 
which is broad and deep in every State, can thrive as we also 
transition to technologies, to energy sources, and to new 
innovations that we haven't even imagined yet in the future.
    We have been caught behind in the competitiveness game for 
a variety of reasons, and this is a chance to help level set.
    Mr. Soto. As we are coming up with our bills and eventually 
going to be negotiating with the Senate, what is in the U.S. 
Innovation and Competition Act that we may be lacking in the 
House so far that you think would be helpful?
    Mr. Paul. Again, that is a great question. I will say the 
USICA was not perfect. I wouldn't just rubber stamp it. I do 
think that the----
    Mr. Soto. They are not going to.
    Mr. Paul. Yes. Please don't.
    I do think that there were some provisions in there that I 
think would be less effective and some that were more. I don't 
know that there is enough time to talk about all of them right 
now.
    But I do think that it makes sense for the House to take a 
targeted approach and specifically to ensure that the funds 
that you are offering go to jobs and innovations that are going 
to be produced in the United States. So there need to be some 
guardrails established that would do that.
    Mr. Soto. Thank you so much. My time has expired.
    Mr. Paul. Thank you.
    Ms. Schakowsky. The gentleman has completed his questions.
    And now, Mr. Dunn, you are recognized for 5 minutes.
    Mr. Dunn. Thank you very much, Madam Chair.
    I appreciate the opportunity to discuss manufacturing 
competitiveness and supply chain resiliency today.
    We are all acutely aware of the ways in which the COVID 
lockdowns disrupted our supply chains and affected our 
constituents. Unfortunately, public policy never seems to get 
ahead of the impending ``everything'' shortage that we are 
hearing about every day. So I am sure there will be more 
lessons learned in the coming months.
    In the wake of a global pandemic, it is more important than 
ever to ensure that we have a secure medical and pharmaceutical 
manufacturing industry, from PPEs, to APIs, to complex 
pharmaceuticals. Our time is short, and so I want to get right 
into the questions.
    Mr. Lincicome, you mentioned in testimony that the National 
Science Foundation data shows that private-sector R&D 
expenditures have reached an all-time high by 2019 prepandemic. 
And I am certain that we all want to stay on that track by 
ensuring the United States remains an attractive place to do 
business.
    Maintaining U.S. manufacturing competitiveness is going to 
rely on diversifying supply chains, lowering barriers to trade 
among the free world, public-private partnerships in the 
generic space, I think, and ensuring adversarial nations such 
as China do not continue to be sole source providers for basic 
and complex resources.
    So can you illuminate for us what led to the increased 
productivity of U.S. R&D expenditures, most especially as it 
relates to biotech and pharmaceutical industries, prior to the 
pandemic?
    Mr. Lincicome. Thank you, Congressman. It will be difficult 
to speak to the biotech sector in particular. I will note a 
couple of things.
    Mr. Dunn. Make it general, then. Make it general.
    Mr. Lincicome. Well, I think that it is clear over the 
last--if you look at the trends, the private sector really has 
stepped up in terms of United States R&D. With U.S. R&D 
spending hitting for the first time ever 3 percent of GDP, this 
was primarily a private-sector initiative and driven, I think, 
by, as I mentioned, when you lighten regulatory and tax, 
particularly corporate tax burdens----
    Mr. Dunn. OK. That is where I was hoping you were going to 
go with this.
    Mr. Lincicome. Studies show that you have, with lighter 
corporate tax burdens, you have more innovation, you tend to 
have that.
    Mr. Dunn. I am so shocked. I am so shocked.
    I am short on time.
    What specific--Mr. Lincicome again--what specific current 
regulatory barriers or trade barriers, regulatory or trade----
    Mr. Lincicome. Yes.
    Mr. Dunn [continuing]. Do you think are the worst for our 
Nation's manufacturing industry?
    Mr. Lincicome. Well, going back to the pharmaceutical 
space, for example, I think that we have a really tremendous 
opportunity to strengthen partnerships with Europe, which 
actually has a substantial biotech industry as well.
    And there was a thing back when--a little while ago--called 
the TTIP that we were actually looking to lower trade barriers, 
harmonize regulatory barriers with Europe. You look at 
something like the Pfizer vaccine is a great example of that 
type of multinational partnership.
    Mr. Dunn. It was. It was. We are running out of time. And I 
am going to submit some questions, by the way.
    But here is what I would like to know: What can Congress do 
to encourage companies to commit resources to our Nation and to 
participate with our free world allies in medical industries 
instead of our adversaries, like China?
    Mr. Lincicome. Yes, sir. I think negotiating international 
agreements with our allies is really an essential aspect of 
this that has seemed to kind of been put by the wayside for the 
last 5 years or more. So I think that is certainly one area.
    But the other thing I think that is critical is consistency 
and predictability in our tax and regulatory environment. If we 
are consistently changing the tax code, changing the regulatory 
environment every couple of years, it makes it very difficult 
for investors in the United States and elsewhere to have the 
predictability they need to make those massive capital 
investments.
    I think full expensing is a great example of that. The TCJA 
did that for a couple of years--or 5 years. That really needs 
to be made permanent because investors need that type of 
certainty to really lay down the cash and do the things that we 
want the private sector to do.
    Mr. Dunn. So as a guy who has actually planned some 
businesses and built some businesses--and I could tell you, you 
are right, stability in the tax code, it would be a very, very 
nice thing to do, because you are gaming the will of Congress, 
which is, as I found in the last few years, more difficult even 
than it looks like.
    So with that, Mr. Lincicome, I don't have enough time left 
to ask any questions. So I am just going to say thank you, and 
I will submit some questions in writing.
    Madam Chair, I yield back.
    Ms. Schakowsky. The gentleman yields back.
    And Congresswoman Rice is recognized for 5 minutes.
    Miss Rice. Thank you, Madam Chair.
    Ms. O'Connell, you mentioned in your--I don't know if you 
said this specifically in your oral statement, in your opening 
statement, but in your submitted written statement you talked 
about how global supply chains are often opaque to private and 
public decision makers, which is a really frightening concept, 
especially when you go on to talk about the need for us to 
really invest in a system that has reliable resiliency.
    You talk about the 2021 Executive order on America's supply 
chain, which stated that the United States needs resilient, 
diverse, and secure supply chains to ensure our economic 
prosperity and national security.
    And you go on to talk about how important it is for the 
U.S. Government to make the investments necessary to ensure 
that outcome. And you also say that businesses cannot be 
expected to shoulder the burden of this task without 
recompense.
    I think this idea of resiliency is so critically important. 
I think that what I am hearing a lot of today, which is an 
agreement on both sides of the aisle that we need to shore up 
supply chains in various different aspects, but the resiliency 
of those supply chains is incredibly important.
    So if you could just kind of expound on what your thoughts 
were in terms of going into--whether it is research and 
development, investment in human capital, vocational schools--
if you could just kind of expound on how important it is for 
the U.S. Government to invest in those aspects of supply chain 
and resiliency.
    Dr. O'Connell. Yes. So I think the biggest concern that I 
would have is the fact that we have accepted risk in all sorts 
of places, but we have no idea where they are. We are sort of 
flying blind, quite frankly, and we will continue to be 
surprised.
    And resiliency will depend on creativity. And that is not 
to say that we will always be able to muddle through, because I 
think under some circumstances muddling through is just not 
going to cut it.
    And so I think the real priority is understanding what is 
the priority that needs to be protected, and then, given that 
priority, understanding the supply chains that underpin that 
particular sector or that particular interest. And I think 
getting more insight into that would be crucial.
    Miss Rice. Well, in your opinion, what are the top three 
areas that we need to focus on of national security importance? 
And then take it from there.
    Dr. O'Connell. So I think when people think of national 
security, they are thinking sort of the large, cleared defense 
contractors like your Boeings, your Lockheeds, your Northrop 
Grummans. But nearly a quarter of DoD contracts by value go to 
small businesses. And when we have insight into subcontracts, 
nearly 40 percent also go into small businesses.
    So when I am talking national security, the breadth and 
scope of what that means really touches across multiple 
sectors, and getting a handle on that, and even trying to make 
that problem a little bit more tractable, I think, would be 
sort of the first step.
    And also, just to appreciate, when we say national 
security, I think people think of guns and missiles and fighter 
jets. But a lot of these national security interests have IT, 
regular aerospace, just broadly covers a lot of different 
industries.
    And I think the breadth and scope of that, we just 
basically need to spend more effort in understanding it and 
then figuring out where we don't have that resiliency and try 
and build it into the system.
    Miss Rice. So how can we do better? Does this legislation 
get us there or on the right track? Or how can we make it 
better? What are your thoughts on that?
    Dr. O'Connell. I am not a legislative analyst, so I will 
not comment on the particular legislation before you.
    I think that the critical thing--and of course I am an 
analyst, so my priority is we need to understand the problem. 
And just sort of investing money blindly might not produce the 
results that you are looking for. And having some clear 
insights on where that money could be most useful, I think, 
would be incredibly important.
    Miss Rice. Mr. Paul, your thoughts on that?
    Mr. Paul. Thank you for the question.
    I agree that we shouldn't throw money blindly. I do think 
it will take investment, because there has been a market 
failure. There are not the right market incentives in place. 
The security of our country, resiliency, is a good that is hard 
to measure for profit-seeking companies.
    But I am encouraged by the steps that the White House, that 
the Senate, and the House may be prepared to do to move us in 
the right direction, because it does extend beyond these 
security goods. It goes to a lot of things that we take for 
granted as consumers or that we depend on as workers as well.
    Miss Rice. Agreed.
    Thank you, Madam Chairwoman.
    And thank you to all the witnesses for coming today.
    Ms. Schakowsky. The gentlelady yields back.
    And now, Congresswoman Lesko, it is your 5 minutes.
    Mrs. Lesko. Thank you very much, Madam Chairman.
    I represent part of Arizona, and it will be--the site of 
the new Taiwan Semiconductor Manufacturing corporation, will be 
in my district. And also, of course, on the other part of the 
Phoenix metropolitan area, Chandler, Intel in Chandler will be 
expanding their semiconductor chip manufacturing as well.
    I think that we can all agree that we have a major problem 
with our supply chains. And the question is, How do we fix it?
    One of my concerns is that there is a lot of legislation 
out there that wants to subsidize certain types of industries, 
like, let's say there is more priority on clean energy 
industries than maybe other supply chains that need help.
    And at the same time, in the same proposal, it is proposing 
higher taxes on these same corporations. So we want to give 
them Federal money, but then we want to tax them more money, 
tax them more.
    The administration wants to ban mining of critical minerals 
that are needed for the manufacturing in the United States, and 
they want to squash production of oil and gas energy in the 
United States. It doesn't make sense to me.
    And so, Mr. Lincicome, can you tell me if that makes sense 
to you?
    Mr. Lincicome. No, it certainly doesn't. Thank you, 
Congresswoman.
    And I think that one of the real concerns I have, aside 
from some of the incoherence of the approach, is that if you 
look at the history of these subsidy programs--and I have 
delved into this a lot in my research--you see that there are 
really two big reasons for concern.
    The first is that a lot of times these subsidies end up 
being captured by large companies with the lobbying, legal, and 
financial resources to navigate and afford the process--and to 
afford the subsidy's conditions, whether it is Buy American 
rules or labor mandates or whatever.
    In fact, studies show that in past green energy subsidies, 
there is a strong connection between lobbying expenditures and 
loan amounts, and that most loans actually went to large 
businesses that didn't need government help and could have 
gotten private funding themselves.
    The second concern is that there is a long history of these 
types of programs raising producers' costs and actually 
delaying, if not thwarting outright, prioritized government 
projects.
    So even subsidy recipients that successfully navigate the 
process end up bogged down in the bureaucratic details, or they 
have high costs that make them totally uncompetitive versus 
their global peers.
    And so it is that type of unintended consequence that 
pervades a lot of past industrial policy.
    Mrs. Lesko. Thank you very much.
    And, Dr. O'Connell, you and others at RAND are familiar 
with China's ambitions in artificial intelligence. I think 
autonomous vehicles will happen with or without U.S. 
leadership.
    And my question to you is, How concerned are you that China 
will set the standard for AVs, thus compromising an important 
area of national and economic security for the United States?
    Dr. O'Connell. That is an excellent question.
    I think that the first statement is, I don't think they 
will set the standards with our application of autonomous 
vehicles in the United States. And certainly there are a lot of 
hurdles currently that are in the United States for that 
progressing.
    It is a delicate balance between sort of international 
research and fostering innovation broadly and globally and sort 
of ensuring that we have the investments made to be a leader in 
innovative sectors and technologies that we find to be 
critical.
    And so I am not sure if I have actually answered your 
question, mostly because I am not an autonomous vehicle expert. 
But I think there is a delicate balance. And I know we are 
walking that balance as well with quantum technologies. And I 
think we don't want to stifle the innovation, but we also want 
to protect nascent industries.
    Mrs. Lesko. Thank you.
    And in my last 17 seconds, I just went to make a statement 
that obviously the Port of Los Angeles, there is a backflow, 
and other ports. So that is causing part of the problem. But 
there is a huge trucker shortage too.
    I have a huge--I have Knight Transportation, which is a 
huge trucking organization in my district, and they were 
talking about the push for electric--all-electric trucks. Well, 
all-electric trucks only go 200 miles versus a diesel truck 
that goes 1,500 miles. So every 200 miles you would have to 
stop and charge the truck.
    So I guess what I am trying to say to some of my colleagues 
is, we need to be strategic on how we spend taxpayer dollars to 
solve this problem.
    And with that, I yield back.
    Ms. Schakowsky. The gentlewoman yields back.
    Next would be Bobby Rush.
    I don't see you on camera, however. Are you there?
    If not, I call now on Congresswoman Trahan for 5 minutes.
    Mrs. Trahan. Thank you, Chairwoman Schakowsky.
    And thank you to the witnesses today.
    Access to loans and other financial instruments at 
reasonable rates is critical for manufacturing products that 
are important to our national and economic security. But the 
cost of capital for lower-margin goods in this country can be 
far more expensive than our economic rivals, which may drive 
production overseas.
    Many American manufacturers are expected to produce 12 to 
14 percent returns for such products to be able to repay loans 
and stay profitable. European manufacturers are expected to 
produce nearly 7 to 9 percent returns, and many Asian firms 
only need to get 5 to 7 percent.
    Mr. Paul, has access to affordable capital posed challenges 
to manufacturing products in the United States?
    Mr. Paul. Representative Trahan, that is an excellent 
question, and indeed, yes, it has. And that is not just myself. 
That is Federal Reserve observations over the years, 
particularly among small and midsize enterprises, and even 
among the larger corporations.
    Manufacturing is capital intensive. The rate of return may 
be slower if you have the option of developing an app that may 
take a couple of people and no physical infrastructure. That is 
where the capital may go. It is a difficult road for 
manufacturing.
    And it is a competitive environment. As you just mentioned, 
manufacturing uniquely in the American economy is in global 
competition, every single firm, which makes it particularly 
exposed.
    That is why assistance programs at the State or Federal 
level that can help with respect to loan guarantees, to 
interest rates, or in some cases for outright grants are 
critically important.
    We face extraordinary pressures, whereas in Germany, for 
instance, a lot of small and midsize firms have access to that 
more patient capital that exists. In China, the loans are often 
forgiven by the state government and act as a direct subsidy.
    So it is particularly challenging for American 
manufacturers in that environment. Ensuring that there is 
access to affordable loans or to subsidized interest rates, 
loan guarantees, or direct subsidies in a targeted way is going 
to be crucial as we move ahead.
    Mrs. Trahan. Do you see that some of the supply chain 
legislation under consideration today corrects these market 
failures?
    Mr. Paul. Yes. I think it gets us on the road to progress, 
absolutely.
    Taken as a whole, the body of bills that have been 
presented would represent, again, an intent to do something 
about the problem. Identification would start to develop those 
public-private partnerships that are necessary and would direct 
some much-needed investment in supply chain resiliency and in 
sectors that are critical to the functioning of our economy as 
well as to our homeland security, national security sectors as 
well.
    Mrs. Trahan. Great.
    Other nations are investing heavily in their industrial 
bases. You mentioned Germany's investment and development bank, 
which provides financial assistance to German small and medium 
manufacturers, provided $100 billion of loans and $5 billion in 
grants in 2020. South Korea provides financial assistance to 
support industries critical to their economic and national 
security as well.
    Dr. O'Connell, are there lessons that can be learned from 
these international models? I mean, after all, the 
manufacturing output of countries like Germany and South Korea 
is growing far faster than the manufacturing output of the 
United States.
    Dr. O'Connell. I think what is notable from these other 
countries is the fact that you don't have to sacrifice quality 
or a standard of living for your workers, and you can still 
have an established and strategically managed sector.
    It is not a perfectly rosy picture, and there are certainly 
aspects of it that want to be considered. But I think there is 
something to be said for the collective good that the public 
sector can offer these private companies.
    Mrs. Trahan. Great. I appreciate that.
    Mr. Paul, did you want to expound on that at all or----
    Mr. Paul. No. I completely agree. As I said before, the 
race to the bottom is not a race the United States is going to 
win. We are never going to be able to underregulate or undertax 
compared to some other countries. But making smart investments, 
working collaboratively with the workforce is going to be a 
strategy that should have measured progress as we move ahead.
    Mrs. Trahan. Thank you.
    Well, I am the daughter of a union ironworker, and I know 
how important manufacturing jobs are to families. And I think 
as Members of Congress it is essential that we pass legislation 
that incentivizes U.S. manufacturing jobs.
    Representative Curtis and I recently introduced the 
Reinforcing American-Made Products Act, which would clarify the 
national Made in the USA standard so that companies and 
consumers can easily support U.S. manufacturing. In order to 
reclaim our title as a world leader in manufacturing, we need 
historic investments and economic incentives.
    Thank you so much for being here today and for all your 
expertise.
    I yield back.
    Ms. Schakowsky. The gentlewoman yields back.
    And now I recognize for 5 minutes Mr. Pence.
    Mr. Pence. Thank you, Madam Chair.
    Before I begin my remarks, I would like to ask for 
unanimous consent to enter into the record a letter of support 
for my bill, H.R. 2907, the Global Investment in American Jobs 
Act. The letter is from the Global Business Alliance.
    Ms. Schakowsky. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pence. Thank you, Chair Schakowsky and Ranking Member 
Bilirakis, for holding this hearing.
    And thank you to all the witnesses today for the time you 
have taken and the testimony you have given.
    To grow manufacturing jobs, we need a welcoming business 
environment for companies to invest in American innovation and, 
of course, ingenuity.
    One opportunity we are discussing today is foreign direct 
investment, a key driver for jobs in the State of Indiana. In 
my own hometown, we have Toyota, Clawson, Enkei, and across my 
district we have Honda and Subaru and other companies.
    Over 250,000 Hoosiers are employed as a direct result of 
international investment, half of which is in the manufacturing 
sector. That is why I introduced the bipartisan Global 
Investment in American Jobs Act with my colleague, Congressman 
Bobby Rush, to ensure that the U.S. remains a premier 
destination to invest, innovate, hire, and manufacture.
    This legislation would review the attractiveness of foreign 
investment into the U.S. and identify bureaucratic barriers--
which we have discussed is an issue--that are holding back 
American competitiveness.
    Earlier this year, I urged the Secretary of Commerce to 
help us prioritize foreign direct investment. I am encouraged 
and report to you today the Secretary committed to working with 
us to advance this bipartisan legislation.
    While I applaud the discussion today on addressing long-
term strategies to improve our domestic manufacturing sector, 
we need to consider the underlying issues we are already 
dealing with today.
    Supply chains that are relying on adversarial countries 
like China face steep delays and increased costs for necessary 
production materials.
    I will continue to champion initiatives to improve 
opportunities for manufacturing investment into the U.S. But 
before solving long-term outlooks, we need to address issues 
that are already facing U.S. consumers and producers right now. 
We saw some of the information that came out today from the 
Government.
    Mr. Lincicome, over the past year the impact of inflation 
and supply chain disruptions are affecting both supply and 
demand in the market, as we said. Month after month, job 
reports are indicating poor economic growth, as we all know. I 
am concerned that we may be moving forward without accurately 
identifying the real cause of the problems in our economy.
    In your opinion--and here are a number of questions--do we 
have an accurate understanding of the underlying economic 
factors affecting PPI, CPI, labor shortages, and supply 
disruptions? What if we are misidentifying the problem? What if 
the real issue is prolonged demand destruction and supply 
pricing manipulation by China in an OPEC-like model?
    Mr. Lincicome. Thank you, Congressman.
    It is a complex question. I would just say that I am not 
very concerned about PPI and CPI, quite frankly. I am more 
concerned about labor shortages and what is causing that.
    It seems to me that there has been a natural assumption--by 
myself included--that everybody who was in the labor force 
prepandemic is going to be in the labor force now, and it 
really doesn't seem like that is the case. It seems that, for 
whatever reason it is--whether it is early retirements or 
change in lifestyle or geographic mismatch or government 
payments that have given people the financial comfort and 
stability to stay home--it doesn't matter.
    But what does appear to be the case is fewer workers now 
available.
    Mr. Pence. What if the jobs are disappearing as well? Like, 
you have been to restaurants. They have reduced their hours, 
the number of seating. What if the jobs are actually 
disappearing as well because of demand?
    I am concerned that demand is causing a lot of these 
problems, the reduction in demand. China may not be producing 
as much. Have we looked at that?
    Mr. Lincicome. Not that I am aware of, Congressman.
    Mr. Pence. With that, I am running out of time. I wish I 
had more time to talk to you about it.
    Thank you again for holding this hearing. I yield back.
    Ms. Schakowsky. The gentleman yields back.
    We have one more Republican who is on the subcommittee, Mr. 
Armstrong, who will be next. And then we are going to move to 
people who have waived on.
    So, Mr. Armstrong, you have 5 minutes.
    Mr. Armstrong. Thank you, Madam Chair.
    I am going to start with a couple of specific questions and 
then just have some general comments. That is what is nice 
about getting to go towards the end.
    The Generalized System of Preferences and Miscellaneous 
Tariff Bill programs both reduce tariffs on products that 
aren't available from U.S. suppliers. Both programs have long 
enjoyed bipartisan support. However, Democrats did not 
prioritize reauthorization before these programs expired at the 
end of 2020. The lapse of both programs effectively acts as a 
tax increase, which is particularly difficult for smaller 
businesses to handle.
    Mr. Sills, do you agree that the resulting tariffs are an 
unnecessary burden that worsens inflationary pressures?
    Mr. Sills. Thank you for the question.
    Let me speak specifically to the 301 tariffs, because those 
are the ones that affected my company and my industry the most. 
And while perhaps the intent was to make America more 
competitive by making imports more expensive, I do not believe 
it had the intended effect. I believe that the vast majority of 
the cost of those tariffs was borne by the American importers 
and not by the Chinese companies.
    And speaking for myself--but I think I can also fairly 
speak for a lot of my peers in the industry--we passed those 
tariffs on. And so, ultimately, it ended up in increases at the 
cash register.
    I do not believe it caused much, if any, reshoring. It 
perhaps created a certain amount of shifting of production from 
China to other low-cost countries. But I don't believe that it 
had the intended consequences. I believe it really mostly just 
increased cost.
    Mr. Armstrong. I think Mr. Lincicome is agreeing with you. 
So I am going to ask him the same question.
    Mr. Lincicome. Yes, I am definitely going to ditto 
everything that Mr. Sills said. That is certainly confirmed by 
my research as well.
    Now, specifically on GSP and the Miscellaneous Tariff Bill, 
these are relatively narrow programs in the sense of causing 
macroeffects like inflation. But they do affect small 
businesses, particularly those that are reliant on these 
products and have come to at least expect the resumption of GSP 
and the Miscellaneous Tariff Bill, which usually happens.
    But Congress has a way of taking these programs, I think, 
for granted because they are not huge programs. But they do 
affect a lot of small businesses in the United States, and 
certainly I think reauthorization is indeed appropriate.
    Mr. Armstrong. Well, and for me I represent a State that 
essentially doesn't have large businesses. It is North Dakota. 
It is all small businesses. We are the geographic center of 
North America. We produce a lot of things we don't consume 
here. We want to get them out.
    And that is kind of my point to this. Like, even 
prepandemic, when you start looking at supply chain, I am old 
enough to remember when we cared about the cost of prescription 
drugs, not where they were sourced from.
    Steel: perfect example of dealing with tariffs. Obviously, 
there are a lot of bad actors in the steel trade, moving, 
flooding the market, dealing with those issues. We have steel 
companies ramping up in the U.S. We obviously want to buy 
American. But, for example, essentially Turkey is the only 
place that makes real pipeline steel.
    So in the process of trying to shore up our domestic supply 
and all of that, how do we deal with the situation where we are 
not capable of producing it?
    I mean--and this isn't a matter of higher cost or lower 
cost. These are oil pipeline companies. They will pay to put it 
in the ground. They just couldn't get it. Like, they physically 
couldn't get it. They couldn't work the waiver provisions.
    And, Mr. Lincicome, you had said something earlier about 
when we do these incentives and deal with this, about only 
really large companies are able to navigate the bureaucratic 
land mines that exist to do this. They have whole floors of 
companies of compliance officers and lawyers, where smaller 
businesses take the hit.
    But I think we also have to view this in a way of, like, 
what is made in America and how that works. I think USMCA 
actually got a bunch of this right. Ford Expeditions are made 
in Mexico. Toyota Tundras are made in Michigan. The parts come 
from everywhere all over the world.
    And we have to be able to deal with that, not only in being 
able to get them quickly, but also to be able to get them and 
have a redundancy set in place and make American companies 
competitive. And I just often find that when we try and put a 
government program in place or a government regulation in 
place, we do the exact opposite of what we are trying to do.
    That was a lot. It is towards the end. Do you have any 
comments?
    And then I would ask Mr.--actually, I am going to ask Mr. 
Sills that.
    You haven't got to talk as much today, and you are the one 
who does this on the ground every day.
    Mr. Sills. I am not sure what is the question.
    Mr. Armstrong. A comment on whatever you want for the last 
4 seconds.
    Mr. Sills. I am out of time. I am sorry. It is too open-
ended. I would rather not speak to it. Thank you.
    Mr. Armstrong. Thank you.
    I yield back.
    Ms. Schakowsky. The gentleman yields back.
    And now we will begin. I have never seen this before. This 
is a tribute I think to how important this topic is, many 
topics that we have been hitting today about manufacturing and 
our economy. But we have five people who have waived on to our 
subcommittee.
    First, let me recognize for 5 minutes Congresswoman Blunt 
Rochester.
    Ms. Blunt Rochester. Thank you so much, Madam Chairwoman. 
Thank you to Chairman Pallone, as well as yourself, for calling 
this important meeting--hearing.
    And thank you to the panelists. I think you are right, 
there is a lot of interest because all of us are being touched 
by this.
    And amongst the most pressing issues that I hear about from 
my constituents, as well as employers here in Delaware, whether 
they are large, medium, or small, are supply chain disruptions 
and workforce challenges.
    And so I am so proud that our committee is working toward 
solutions and also proud to have worked alongside 
Representatives Malinowski and Kinzinger to introduce two 
bipartisan pieces of legislation, the Building Resilient Supply 
Chains Act and the Manufacturing Economy and National Security 
Act.
    Both bills take important steps to stabilize and make more 
resilient our supply chains by providing financial support to 
develop, diversify, restore, and expand our supply chains and 
ultimately strengthen our national and economic security.
    In Delaware, every industry has been impacted in some way: 
healthcare, agriculture, restaurants, car dealerships, and 
housing. Not only are these supply chain disruptions impacting 
our access to critical goods, but these disruptions are also 
creating price hikes at a time when we continue to build toward 
economic recovery. Passing these bills will be an important 
step in Building Back Better.
    With that, I ask the Chair for unanimous consent to submit 
into the record a letter of support from Representative 
Malinowski for the Building Resilient Supply Chains Act.
    Ms. Schakowsky. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Ms. Blunt Rochester. Thank you, Madam Chair.
    In Delaware, despite our economy reopening, our restaurants 
continue to suffer the effects of the COVID-19 pandemic. Food 
costs are extremely unstable, and rising gas prices are 
impacting restaurants' ability to deliver food.
    A recent survey found that 75 percent of restaurants were 
forced to change their menu items due to supply chain issues. 
And the Biden administration has identified that supply chains 
for agricultural commodities and food products are critical.
    Mr. Paul, how could stabilizing our supply chains prevent 
sticker shock and inflation in the future?
    Mr. Paul. Thank you very much for the question.
    Obviously, sometimes there is whiplash after unpredictable 
events with respect to supply and demand, and you will see 
temporary increases. That is obviously not uncommon.
    The question is whether this is transitory or whether this 
is going to be a longer state of play here, which is why it 
makes sense to invest in productive capacity.
    This is a good time to do it, to ensure--particularly for 
items in which the supply chains are tremendously globalized or 
supply categories where there is a lot of import penetration in 
the United States--that we take a look at where we can make a 
difference, to offer an adequate supply, particularly in a time 
of need, or to have companies that have ramp-up capability here 
at home so that it doesn't have to sit on a ship for 73 days 
and get to the United States.
    So will these bills obviously solve the problems that exist 
this day? They won't. But this is a chronic condition as well. 
And so that is why I believe that the committee, that the House 
of Representatives, should take action on a set of 
competitiveness bills. I think that that would do a great deal 
to help those in the food industry and other categories that 
are dependent on getting supplies in a timely and efficient 
way.
    Ms. Blunt Rochester. Thank you.
    And just to follow up, the Building Resilient Supply Chains 
Act actually will not only use Federal funds to strengthen our 
supply chains but also ensure employers who receive the funds 
allow workers to use their voice to form a union if they choose 
to do so.
    Can you talk about why you think creating good-paying union 
jobs is important when the Government provides significant 
Federal support to manufacturers?
    Mr. Paul. I think it is absolutely important to reward 
companies that are doing the right thing by workers and sharing 
some of their profits with their workers. It makes a great deal 
of sense.
    Too many of the gains over the last couple of decades in 
our economy have benefited a certain class--shareholders--and 
others have been left behind. And particularly in industries 
that we are trying to grow, we find that they are 
underrepresented by women and people of color. And so this is 
an opportunity to ensure that workers are a part of the 
beneficiaries of the policy choices that are being made.
    Ms. Blunt Rochester. Thank you. My time is up.
    Mr. Sills, I will follow up with you later. But thank you 
very much for your testimony. And specifically I will follow up 
to ask you about how these shocks have affected your ability to 
compete internationally, even though North America is your 
primary market.
    So thank you so much, Madam Chair. And I yield back.
    Ms. Schakowsky. The gentlewoman yields back.
    And, Mr. Johnson, you are recognized now for 5 minutes.
    Mr. Johnson. Well, thank you, Chairwoman Schakowsky. I 
really appreciate you waiving me on to your subcommittee today.
    I am very pleased that my legislation, H.R. 5476, the 
Advancing Tech Startups Act, was included in today's 
legislative hearing. I am also pleased that this legislation 
has received bipartisan support from my colleagues Bobby Rush 
and Dean Phillips.
    This legislation promotes a national strategy for 
encouraging more tech-focused startups and small businesses in 
all parts of the United States. I mean, you don't have to be in 
Silicon Valley to successfully launch a tech startup. The 
talent, sustainable cost structure, and opportunities are 
available in many locations across the country.
    Specifically, H.R. 5476 requires the Secretary of Commerce, 
in coordination with the heads of other appropriate Federal 
agencies, to conduct a study within 2 years on the impact of 
technology startup companies on the United States economy.
    This study must establish a list providing descriptions and 
the locations dedicated to the creation, development, and 
growth of tech startups, in addition to a list detailing the 
activities of public-private partnerships focused on promoting 
tech startups.
    Furthermore, this study requires the development of a 
comprehensive list of Federal agencies asserting jurisdiction 
over entities and industry sectors dedicated to the creation 
and growth of all tech startups, and to also identify all 
Federal rules and regulations as they relate to States, cities, 
or geographic areas committed to the creation of technology 
startup companies.
    This information can really help identify barriers that may 
hinder technology and small business startups from taking root 
all across the country.
    Additionally, in order to identify emerging risks, long-
term trends, and to assess the severity of risks posed to 
relevant marketplaces and supply chains, this study must also 
include a survey of relevant marketplaces and supply chains 
impacting the creation, growth, and development of technology 
startups.
    As we all know and are continuing to experience, the 
pandemic has served as a painful lesson about the importance of 
creating products, supply chains, and intellectual capital 
right here at home. We can't rely on China or anyone else--and 
we don't need to.
    While we must ensure our supply chains are resilient in a 
global economy, we must also be self-sufficient in critical 
areas. And it is time to fully unleash the American spirit of 
innovation and entrepreneurship across the entire United 
States.
    As I mentioned, you don't have to be in Silicon Valley to 
successfully launch a tech startup. Some of my colleagues on 
both sides of the aisle may already know that both Columbus and 
Cincinnati were named in Forbes' list of top 10 rising cities 
for startups. For instance, Columbus-based READY Robotics 
empowers manufacturers to be more competitive through a line of 
easy-to-use industrial robotic systems.
    Additionally, Physna, short for Physical DNA, is a fast-
growing software company based in downtown Cincinnati that 
offers industry-leading geometric deep learning technology, 
including a geometric search engine that allows users to 
search, store, share, and collaborate on 2.5 million 3D models.
    And from Youngstown, just outside my district, JuggerBot 3D 
is an additive manufacturing machine builder whose mission is 
to design and build the finest 3D printing solutions in the 
world while delivering technology solutions that meet their 
customers' criteria for performance, reliability, and value.
    Their goal is to deliver innovative products that break 
down barriers and open doors to new possibilities for their 
clients. By enabling companies to utilize readily available 
production materials for their additive manufacturing 
applications, JuggerBot is helping to push 3D printing to the 
forefront of production.
    And this is just a small sampling of the innovation taking 
place through tech startups in Ohio.
    Madam Chairman, it is time to tap into the American spirit 
of ingenuity and entrepreneurship that is expanding and 
thriving well beyond Silicon Valley so that we can ensure that 
all parts of the United States can benefit from these tech 
startups.
    I did have a question for Mr. Lincicome, but I see that my 
time has expired. So I will yield back at this point.
    Thank you, Madam Chairman.
    Ms. Schakowsky. Go Ohio, and go Midwest. And the gentleman 
yields back.
    And now I recognize Mr. Joyce, who has waived on to the 
committee, for his for 5 minutes.
    Is he here? I don't see him.
    So I am going to move on to--OK.
    Last chance. Mr. Joyce? No.
    I am going to move on, then, to Mr. Carter.
    You are recognized for 5 minutes.
    Mr. Carter. Thank you, Madam Chair, for allowing me to 
waive on to your subcommittee.
    And thank everyone, all the presenters. I appreciate you 
being here.
    The bills that we are discussing today fail to address 
domestic manufacturing and competitiveness of medical products.
    One thing that we have recognized during this pandemic--and 
I think there is a difference between knowing something and 
realizing something. We have known for a long time that we were 
too dependent on other countries for our PPE, for our drugs, 
and the pharmaceutical ingredients. All of that we have known.
    We realized it during the pandemic. We realized that we 
were too dependent on that, particularly China, and 
particularly India. In the case of China, I mean, 90 percent of 
all antibiotics that we have here in America are made in China. 
Ninety percent of all the Ibuprofen, made in China.
    We had 26 drugs that were held back by India for their own 
use until they made sure that they didn't have to have them 
before they would send them to us. Same thing happened with 
China.
    We spoke, the Doctors Caucus had the former Secretary of 
ASPER, the Assistant Secretary of Preparedness and Emergency 
Response, Dr. Kadlec, at one of our meetings a couple weeks 
ago, and he told us that we noticed a downturn in the amount of 
PPE that China was sending us way back in September of 2019--in 
September of 2019. Not when we first recognized we had the 
pandemic back in the first of 2020--in the early months of 
2020, in February and March--but in September of 2019, which is 
a whole 'nother story.
    It tells us, first of all, they knew what was going on. But 
the point is, is they decreased the amount of PPE that they 
were sending us.
    So we know that we have got to have manufacturing of 
medical products here in America. That is why I have introduced 
a bipartisan bill, the MADE in America Act, manufacturing aids 
to pharmaceuticals and drugs and excipients here in America, 
trying to repatriate those companies back to America so that we 
are not dependent on other countries for our pharmaceutical 
needs.
    That is bipartisan legislation. And I hope that we will get 
the opportunity to look at that bill, and I hope we will get 
the opportunity to call that bill up.
    I want to ask you, Mr. Lincicome. I have the honor and 
privilege of representing the entire coast of Georgia. It 
includes two major seaports, the Port of Savannah, the number-
three container port in the country, the fastest-growing port 
in the country, the Port of Brunswick, the number-two roll-on/
roll-off port in the country.
    All of these ports are extremely important. And we 
recognize--and you have even said it, many of you have said 
that we receive goods through a global supply chain and they 
come through our ports. I mean, even the leader of the 
committee has said that the Biden administration's message to 
many Americans is that we may not receive our Christmas and 
holiday gifts this year on time because of the supply chain 
issues that we are experiencing in our ports.
    Mr. Lincicome, I wanted to ask you, what do you see as the 
largest issue at our ports currently? And how can we address 
that issue?
    Mr. Lincicome. Thank you, Congressman.
    I mean, I think it is first essential to understand that 
some of this is just the pandemic doing its thing. Massive 
supply-and-demand imbalances all over the world are going to 
wreak havoc on global shipping. And then these things tend to 
build on each other as containers get locked up at port.
    That said, there are significant, I think, systemic 
problems facing the United States' logistics in port 
infrastructure. The United States, our ports--according to the 
World Bank, not a single U.S. port ranks in the top 50 in terms 
of efficiency in the world. The Port of L.A. in Long Beach out 
West, one of the largest--the largest in the country--is around 
335th in the world in port efficiency.
    Now, why is this? Well, if you actually start digging into 
the issues, you see one of the reasons is that port unions over 
the years have opposed automation of U.S. ports and have 
specifically demanded that they not be as efficient and 
productive as possible.
    U.S. maritime law, the Jones Act and other things, make 
dredging ports prohibitively costly. And they also push 
coastwise shipping--so, for example, bringing oranges from 
Florida to Boston--they push that onto our highways, further 
clogging up trucking capacity.
    It is those type of long-term systemic issues, along with 
our trade rules--I mentioned the chassis tariffs--that we 
really need to think about for the next potential supply chain 
crisis. And this is about maximizing efficiency and 
flexibility, not just picking winners and losers in the market.
    Mr. Carter. Well, you are absolutely right, and I 
appreciate that.
    And also the regulations that we have to go through. We are 
dredging the Savannah port right now, and the Savannah Harbor 
Expansion Project, started it in 1996. China has started and 
completed three ports since that time period. So that is a big 
problem too.
    And I am out of time, Madam Chair, and I yield back.
    Ms. Schakowsky. The gentleman yields back.
    And last but not least, I recognize as a waive-on to this 
great subcommittee Mr. Kinzinger for 5 minutes.
    Mr. Kinzinger. Thank you, Madam Chair.
    And to the witnesses, thank you for being with us.
    And, Chairwoman, thank you for allowing me to waive on.
    As the spread of COVID-19 began accelerating, the U.S. 
quickly came to understand just how debilitating some of our 
overlooked or underaddressed supply chain vulnerabilities had 
become.
    My office spent 14 months developing and consulting with 
experts, culminating in the introduction of bipartisan 
legislation, which is the MADE in the Americas Act, to address 
these national security issues posed by countries of concern.
    This bold and ambitious legislation takes many of the 
painful lessons we learned from the pandemic and aims to 
strengthen the security of our Nation and our economy.
    While my original bill is not being considered today, my 
MEANS Act, which is, aims to accomplish much of the same. The 
MEANS Act would provide financial tools to manufacturers 
operating in countries of concern to move their manufacturing 
operations to the United States or, when it would be 
financially impossible, to other allied nations or key 
partners.
    Whether it is China threatening to withhold lifesaving 
goods from the U.S. in the middle of a pandemic or the record 
number of freighters waiting off the coast for entry to port, 
it is clear that action is needed.
    A legislative hearing on these bills represents a major 
step in addressing these challenges.
    I believe my colleagues would agree that these bills are 
not yet perfect, and each measure would require further 
negotiations and consultations with stakeholders and experts.
    But I am proud of the work each office has done to this 
point. I look forward to keeping up the momentum through 
Congress.
    Mr. Lincicome, I appreciate your testimony. You are clearly 
pessimistic about Federal industry policy. But I think you and 
I have more in common than not on policy preferences.
    I agree that the U.S. must make itself internationally 
competitive. This should be done by keeping corporate tax rates 
low, immediate full expensing, and lightening regulatory 
structures.
    We should also be engaging in more bilateral and 
multilateral trade agreements, reducing tariffs, and otherwise 
eliminating as many nontariff trade barriers as possible.
    In fact, the bipartisan supply chain bill I introduced in 
May, the MADE in the Americas Act, sought to accomplish these 
goals.
    My bill under consideration was developed to fit solely 
within this committee's jurisdiction. And while there is 
overlap between the MADE and MEANS, pretty much all the tax, 
trade, and foreign policy provisions from the former are 
absent. For the record, I stand by those provisions.
    Where you and I differ is on the matter of industrial 
policy and the idea that there is little to no role for the 
Government in this space.
    You mentioned how the pandemic led to a shortage of PPE, 
medical equipment, and pharmaceutical ingredients, and how 
resilient the market was in filling that void. I couldn't agree 
more. It is a testament to America.
    But we need to consider the real-world impacts of those 
shortages both from a practical standpoint and as a matter of 
national security and foreign policy. We cannot ever allow 
another nation, China or otherwise, to have the power to 
withhold exports of critical goods.
    While I agree it would be best for the market to self-
correct, we have to look at it primarily from a national 
security standpoint and not as an academic or theoretical 
exercise. The Federal Government's primary role is to protect 
its citizens from foreign threats.
    Let me ask you, do you happen to know by chance how many 
Americans died because we didn't have enough masks, 
ventilators, cleaning products, drugs?
    Mr. Lincicome. No, Congressman.
    Mr. Kinzinger. Yes, I don't think that is a figure anyone 
can have. And I think the point is we can all agree that the 
answer is definitely too many.
    We are not looking to one-up these market corrections. We 
are looking to provide tools to replicate them for other 
critical goods, particularly those related to critical 
infrastructure, because major supply chain shocks cost lives. 
And in order to preserve life, we have to be proactive and not 
reactive.
    The rate at which China is cornering the markets, ranging 
from rare earth minerals, to semiconductors, to industrial 
chemicals, combined with the strained nature of our bilateral 
relationship, is making a future crisis increasingly likely.
    So when we have seen such major vulnerabilities in certain 
supply chains, we can't stand idly by putting all our faith in 
purely just market-driven forces.
    Let me close that by saying, I don't mean to be 
adversarial. You are clearly well informed on these matters and 
we agree on a lot. We just simply differ on a few approaches.
    So I would like to ask you, are you willing to work with my 
office to make any improvements to the policy proposals under 
consideration today and have an open conversation?
    Mr. Lincicome. Yes, Congressman. Of course I am happy to 
help. Of course, again, Cato does not specifically lobby on 
specific pieces of legislation. But in terms of the principles 
and the ideas, I am happy to lend my knowledge.
    Mr. Kinzinger. Excellent.
    Well, Madam Chair, I have got some more, but we are coming 
up on 20 seconds left. So I will yield that back.
    Thank you to everybody for being here.
    Ms. Schakowsky. I thank the gentleman, who yields back.
    And I want to now just give a really big shout-out and 
thank you to our witnesses. I am on a number of committees and 
subcommittees and rarely see five individuals actually ask to 
waive on to a conversation like this.
    I want to see if my ranking member just wants to say a few 
closing words of thanks as well.
    Mr. Bilirakis. Well, I just want to say thank you, Madam 
Chair. I want to thank the presenters, of course, and all the 
Members who stayed on with this, and also the people that 
waived on. Thanks for your patience. And I think it was very 
productive. So I appreciate you holding the hearing.
    And with that, I yield back.
    Ms. Schakowsky. The other thing I just want to say to the 
witnesses, this was incredibly bipartisan also in most 
situations. And so there are a number of bills that we are 
considering, and hopefully we will have your support and help 
and advice as we move forward.
    I want to remind all Members that, pursuant to committee 
rules, that they have 10 days to submit additional questions 
for the record.
    And I want to say to the witnesses, we ask you--that those 
inquiries that are clearly going to come to you, people 
referred to them. I have never seen 5 minutes also go by as 
fast as in this particular hearing that we have had.
    So you are going to get questions. And we are asking that 
these questions be answered by the witnesses who have appeared 
as quickly as possible.
    And with that, let me just say that we do have to submit 
for the record three letters, a letter from the Premier 
Healthcare Alliance, a letter from the U.S. Travel Association.
    And without objection, then, that would be so ordered.
    [The information appears at the conclusion of the hearing.]
    Ms. Schakowsky. And at this time the subcommittee is 
adjourned.
    [Whereupon, at 2:59 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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