[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
MADE IN THE USA:
IGNITING THE INDUSTRIAL RENAISSANCE
OF THE UNITED STATES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ECONOMIC GROWTH, ENERGY
POLICY, AND REGULATORY AFFAIRS
OF THE
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
U.S.HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
APRIL 29, 2025
__________
Serial No. 119-21
__________
Printed for the use of the Committee on Oversight and Government Reform
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on: govinfo.gov,
oversight.house.gov or
docs.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
60-195 PDF WASHINGTON : 2025
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
JAMES COMER, Kentucky, Chairman
Jim Jordan, Ohio Gerald E. Connolly, Virginia,
Mike Turner, Ohio Ranking Minority Member
Paul Gosar, Arizona Eleanor Holmes Norton, District of
Virginia Foxx, North Carolina Columbia
Glenn Grothman, Wisconsin Stephen F. Lynch, Massachusetts
Michael Cloud, Texas Raja Krishnamoorthi, Illinois
Gary Palmer, Alabama Ro Khanna, California
Clay Higgins, Louisiana Kweisi Mfume, Maryland
Pete Sessions, Texas Shontel Brown, Ohio
Andy Biggs, Arizona Melanie Stansbury, New Mexico
Nancy Mace, South Carolina Robert Garcia, California
Pat Fallon, Texas Maxwell Frost, Florida
Byron Donalds, Florida Summer Lee, Pennsylvania
Scott Perry, Pennsylvania Greg Casar, Texas
William Timmons, South Carolina Jasmine Crockett, Texas
Tim Burchett, Tennessee Emily Randall, Washington
Marjorie Taylor Greene, Georgia Suhas Subramanyam, Virginia
Lauren Boebert, Colorado Yassamin Ansari, Arizona
Anna Paulina Luna, Florida Wesley Bell, Missouri
Nick Langworthy, New York Lateefah Simon, California
Eric Burlison, Missouri Dave Min, California
Eli Crane, Arizona Ayanna Pressley, Massachusetts
Brian Jack, Georgia Rashida Tlaib, Michigan
John McGuire, Virginia
Brandon Gill, Texas
------
Mark Marin, Staff Director
James Rust, Deputy Staff Director
Mitch Benzine, General Counsel
Kim Waskowsky, Senior Professional Staff Member
Daniel Flores, Senior Counsel
Kyle Martin, Counsel
Mallory Cogar, Deputy Director of Operations and Chief Clerk
Contact Number: 202-225-5074
Jamie Smith, Minority Staff Director
Contact Number: 202-225-5051
------
Subcommittee On Economic Growth, Energy Policy, And Regulatory Affairs
Eric Burlison, Missouri, Chairman
Gary Palmer, Alabama Maxwell Frost, Florida, Ranking
Clay Higgins, Louisiana Minority Member
Byron Donalds, Florida Yassamin Ansari, Arizona
Scott Perry, Pennsylvania Dave Min, California
Lauren Boebert, Colorado Ro Khanna, California
C O N T E N T S
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Page
Hearing held on April 29, 2025................................... 1
Witnesses
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Mr. Chris Power, Founder and CEO, Hadrian
Oral Statement................................................... 5
Mr. Kevin Czinger, Founder, Divergent 3D
Oral Statement................................................... 7
Mr. Austin Bishop, CEO, New American Industrial Alliance
Oral Statement................................................... 9
Dr. Adam S. Hersh, Ph.D. (Minority Witness), Senior Economist,
Economic Policy Institute
Oral Statement................................................... 11
Written opening statements and bios are available on the U.S.
House of Representatives Document Repository at:
docs.house.gov.
Index of Documents
----------
* Letter, May 2, 2025, from Hadrian, to Subcommittee on
Economic Growth, Energy Policy, and Regulatory Affairs dated;
submitted by Rep. Burlison.
* Statement, April 29, 2025, National Association of
Manufacturers; submitted by Rep. Burlison.
* Article, CNBC, ``This is the Trump recession, CEOs say, with
tariff price increases, job losses coming''; submitted by Rep.
Frost.
* Article, Center for American Progress, ``Trump's Tariff Pause
Doesn't Pause Economic Pain''; submitted by Rep. Frost.
* Article, The Independent, ``Trump's tariffs driving thousands
of layoffs at U.S. Manufacturing Plants''; submitted by Rep.
Frost.
The documents listed above are available at: docs.house.gov.
MADE IN THE USA:
IGNITING THE INDUSTRIAL RENAISSANCE
OF THE UNITED STATES
----------
Tuesday, April 29, 2025
U.S. House of Representatives
Committee on Oversight and Government Reform
Subcommittee on Economic Growth, Energy
Policy, and Regulatory Affairs
Washington, D.C.
The Subcommittee met, pursuant to notice, at 11:07 a.m., in
room HVC-210, Capitol Visitor Center, Hon. Eric Burlison
[Chairman of the Subcommittee] presiding.
Present: Representatives Burlison, Higgins, Donalds, Perry,
Frost, Min, and Khanna.
Mr. Burlison. This hearing on the Subcommittee of Economic
Growth, Energy Policy, and Regulatory Affairs will come to
order. Welcome, everyone, to this meeting. Without objection,
the Chair may declare a recess at any time.
I recognize myself for the purpose of making an opening
statement.
We are here today to discuss an issue that is becoming
increasingly urgent: the future of U.S. manufacturing. The
United States is facing a need that it has never faced before:
the need to shake off and reverse its fall as the global leader
in manufacturing.
We won the Second World War not just because our generals
were great leaders and strategists, and not just because we put
so many heroic men and women on the field of battle and in
support, but because we manufactured our enemies into oblivion.
The United States held approximately 40 percent of the globe's
manufacturing in 1941. After Pearl Harbor, that vast
manufacturing power became the free world's arsenal for
democracy.
For every German tank manufactured, we produced four tanks.
For every merchant ship tonnage the Japanese built, we produced
eight. For every aircraft carrier the Japanese deployed, we
launched three. For every plane that combined Axis powers
built, we, by ourselves, manufactured 1.5 planes.
Before the war, the U.S. manufactured less than 3,000
planes. By the end of the war, we had a force of 300,000
planes. Overwhelming material was pivotal to our winning the
war, and the United States left World War II as the most
wealthy and powerful nation on Earth, in very large part
because of our manufacturing prowess.
Yet as time marched on and the good post-war times rolled,
we began to forget how important our capacity to manufacture
and innovate was to making, and keeping, America great.
And as the cold war ended and we entered the ``end of
history'' era, unprecedented globalization took hold. In that
moment, instead of embracing new technologies or innovating in
the manufacturing industry, we sold off our manufacturing
birthright to other countries.
A vast amount of what once was American manufacturing was
shipped off to foreign manufacturing. In the end, we lost our
manufacturing base, and that was not just because U.S. leaders
supported globalization. It was also because we overregulated
existing manufacturing and imposed enormous obstacles to the
permitting of new manufacturing. This strangled possibilities
for new growth and further encouraged U.S. manufacturers to
move their manufacturing overseas.
In the end, the United States' share of global
manufacturing fell from the 40 percent it was in the 1950s to
the 16 percent share we hold today. We lost millions of skilled
labor jobs, the middle class has shrank, and communities across
America have been harmed.
Filling the void of the U.S. was China. China's share of
global manufacturing increased at an exponential rate. China
leaned in heavily on cheap labor, slave labor, and suicide-
inducing labor conditions to achieve the manufacturing share
that it possesses today. And China's position as the current
world leader in manufacturing poses economic, military, and
national security threats to the United States.
Nevertheless, there is hope we are approaching an American
industrial renaissance. Under President Trump, the United
States has the technology, the capital, and the political will
to reshore manufacturing stateside. Congressional and executive
branch efforts to decrease unnecessary regulatory burdens and
streamline permitting processes will encourage reshoring. And
by adopting automation and artificial intelligence, the United
States can and will multiply the economic output of the average
American worker exponentially.
Salaries will rise as costs of goods stay low. Skilled
labor and manufacturing employment that was extinguished due to
globalization will return. The middle-class will expand again.
We can and will bring manufacturing back to the United States.
And, with that, I yield to Ranking Member Frost for his opening
statement.
Mr. Frost. Thank you so much, Mr. Chair, and thank you to
the witnesses for being here this morning.
Since the 1980s, the United States has faced a decline in
manufacturing jobs that has left many workers feeling forgotten
and turned away by many once thriving communities into ghost
towns. Democrats are united in wanting to bring more good,
high-paying manufacturing jobs to these communities and making
sure America is leading the way in strategically significant
manufacturing sectors of the future.
But President Trump's disastrous tariff plan, which is
estimated to increase costs to American households by $4,900 a
year, is not the solution. During the Biden Administration, the
Democrats' Made in America agenda resulted in legislation like
the CHIPS and Science Act, the Infrastructure Investment and
Jobs Act, and Democrats drafted this legislation with
Republicans in a bipartisan way, and with the vital input of
manufacturing workers, employers, and impacted communities.
This legislation jump-started industry, helping to create
more than 700,000 manufacturing jobs in the United States, and
secure over $1 trillion in planned investments. Our country has
not seen this much new factory construction in half a century.
This legislation and these investments created during the Biden
Administration should continue to pay off, creating over
200,000 more jobs each year going forward, assuming no new
policies stifle that growth.
There is still so much to do and to support in terms of
domestic manufacturing and creating good-paying, safe and
affordable products here in the America while protecting our
environment. I am here to work with anyone, regardless of
political affiliation, to continue this work.
But I am also concerned that instead of advancing the
progress we have made over the last several years, we are going
to trend in the opposite direction due to Trump's irrational
blanket tariff policy. While Democrats' legislative
achievements in manufacturing have created again more than
700,000 manufacturing jobs, Trump's chaotic tariffs are
expected to eliminate 770,000 jobs in 2025 alone.
Tariffs are an important tool, and when used carefully and
intelligently can help the American worker. But from slashing
services at the VA to ``accidentally'' encouraging our air
traffic controllers to resign and firing the essential workers
that maintain our nuclear weapon stockpile, deporting American
citizens, and discussing sensitive military operations on
Signal, ``careful and intelligent'' does not describe this
Administration, and that is the case with their tariff policy,
as well.
Investors are pulling back from doing business in America,
which impacts critical industries and prevents companies from
actually starting new businesses to make goods here in the
United States. Hard-working Americans are seeing a tanking
stock market tank, widespread firing, and are concerned about
what is to come.
I have heard from countless Central Floridians in my
community who have fears. David, an Orlando retiree, has lost
20 percent of his 401k in the last 2 months. Patricia, an
Orlando resident, wrote in, saying she cannot make improvements
to her home with the recent instability of the economy. And
Delia, who also wrote into our office, a Winter Park working
person, said she will not be able to afford the tariff-driven
increase on the cost of food, housing, medicine, and other
things, as well.
We know there is a better way. The laws we led created the
stability that manufacturers need to create jobs, and we work
to make sure that they were jobs that Americans want and
deserve, safe jobs that offer financial security and stability.
Democrats increased both worker safety protections and worker
safety inspections while making good wages a key component to
the CHIPS and Science awards.
The Democrat-led National Labor Relations Board cracked
down on law-breaking corporations and fortified workers' right
to organize. As we know, in 2023, President Biden became the
first sitting U.S. President to ever walk a picket line when he
marched with striking United Auto Worker members in Michigan.
The President, Donald Trump, worked aggressively to put
corporate profits over workers' rights during his last term,
and he is doing it again. This is why we are going to see, in
the second term, just like happened in the first term, that
wealth inequality in this country will continue to rise.
For starters, he attacked the National Labor Relations
Board and its mission of defending workers' rights, illegally
fired the one Democratic board member, like in his first term,
and he is stuffing the board with anti-worker people. Elon Musk
even called the NLRB ``unconstitutional,'' while Trump has
praised Musk for firing striking workers. The President is also
looking at repealing sick leave, minimum wage, and overtime
protections for some categories of workers.
While making working conditions worse, he has also made it
less safe. During his first term, Trump had the fewest OSHA
safety inspectors ever, and he has already fired two-thirds of
the National Institute for Occupational Safety and Health work
force since retaking office.
His assault on workers' rights and safety does not stop at
the factory gate but it follows workers at home, as well. And
this is important, because we cannot talk about bringing
manufacturing jobs and this industry back to America without
ensuring that we empower and protect the American worker. It is
probably the most important part of this conversation, and
Democrats are going to ensure that the American worker is front
and center here.
I look forward to working with my colleagues from both
parties as well as workers' labor representative, private
industry, to continue the manufacturing boom that was started
by Democrats over the past 4 years. But this effort must never
be at the expense of safety, dignity, and prosperity of the
American worker.
Thank you. I yield back.
Mr. Burlison. Thank you. I am pleased to welcome our panel
of expert witnesses who each bring experience and expertise
that will be valuable for today's discussion on manufacturing.
I would first like to welcome Chris Power, from Hadrian,
who serves as the company's Chief Executive Office.
Next we have Kevin Czinger, who is a Founder of Divergent
and currently serves as its Executive Chairman.
Next we have Austin Bishop, who is the Chief Executive of
the New American Industrial Alliance.
And last we have Adam Hersh, who serves as a Senior
Economist at the Economic Policy Institute.
Thank you each for being here, and with that I would ask
everyone to stand.
Pursuant to Committee rule 9(g), the witnesses will please
stand and raise their right hands.
Do you solemnly swear or affirm that the testimony you are
about to give is the truth, the whole truth, and nothing but
the truth, so help you God?
[Chorus of I dos.]
Mr. Burlison. Let the record show that the witnesses
answered in the affirmative. You may be seated.
We appreciate you being here today. We look forward to your
testimony. Let me remind you that we have read your written
statement and it will appear in full in the hearing record.
Please limit your oral arguments to 5 minutes. It is very
simple. The light in front of you will turn yellow when you
have 1 minute left, and then when it is red your time has
expired.
As a reminder, please press the button, and often people do
not know to speak directly into the microphone. So, this is
being covered on C-SPAN, and we want the American people to
hear what you have to say.
And with that I recognize Mr. Power for his opening
statement.
STATEMENT OF CHRIS POWER
FOUNDER AND CEO
HADRIAN
Mr. Power. Thank you, Chairman Burlinson and Ranking Member
Frost, and members of the Subcommittee. I appreciate the
opportunity to appear here today.
I came to this country from Australia 5 years ago, purely
because I recognized that, as the Chairman quite rightly said,
we are past the end of history for Kiama phase. And what we
have done to the United States is de-industrialized the country
over the last 40 years, some through our own mistakes and some
through forcible Chinese policy, where they are using
aggressive subsidies to pull out critical manufacturing
capability from offshore.
And what I recognized before I came here to make as big of
an impact on the country as possible is that Americans treat
manufacturing as a kind of globalism-free trade over the last
40 years, and China has quite rightly treated it as a strategic
capability of being able to make things onshore.
And the Chairman was quite right in that what won World War
II was our ability to pivot the commercial manufacturing base
into the defense base when it really mattered. And over the
last 40 years we have offshored everything that was not bolted
down to the defense industrial base by regulations like ITAR.
So, we are in a real crisis now, and the impact of that,
that both the Chairman and Ranking Member Frost were quite
right, is that it decimated the middle class, it decimated the
American manufacturing work force, and culturally that means no
one wants to work in manufacturing because why would you sign
up your son or daughter to go into an industry that is
declining? So, we have created this real crisis for ourselves,
and now that China is a real global threat, we are in very much
a crisis mode.
So, I came here to make a difference in that, and I will
provide some specific recommendations. But in reality, what
this is all about is the highly skilled American work force.
And for the last 40 years, because of those declining jobs,
because the revenue has gone out of the country, there are less
factories, there are less good jobs. And now we are at a point
where most of the skilled American work force is in their late
50s and early 60s. And by skilled I mean incredibly highly
skilled, especially the defense industrial base. It normally
takes 10 to 20 years to train someone. These are very highly
paid jobs of the defense primes or subcontractors of the
defense primes, that are critical to remain onshore.
But because of that demographic load you have got most of
the work force aging out across the next decade, as people get
older and they retire, and we are losing their knowledge and
skills with them, and we are forgetting as a country to
manufacture, and it is all about the people on the ground floor
that are getting the job, day in and day out. And they are just
retiring faster and faster and faster.
So, what my company does, Hadrian--we are the fastest-
growing manufacturer in the United States--is we build
autonomous, AI-driven factories where we are not replacing
people, but we are making the American work force ten times
more efficient, so that we can compete globally while creating
new and advanced jobs along the way.
And the only way to reindustrialize this country is to
leapfrog the Chinese system, which has been built on the back
of slave labor conditions, enormous CCP policy-led energy
subsidies, raw material subsidies, that are simply not a level
playing field with American innovation.
So, what our company is built to do is build and rapidly
scale United States factories that are software and robotics
first, that do not replace people but let them be ten times
more productive and also simplify things so that 100 percent of
our work force now have never set foot inside a factory before
they join our company. We can train them in 30 days, and not 10
to 20 years. And what means is that there are new types of jobs
coming online that are higher paid, they are better, friendlier
conditions, and it allows us to scale with the demand that the
country needs, especially in critical areas like shipbuilding
and munitions, where the No. 1 problem that you will hear from
program officers or other actors in the shipbuilding space is,
``You could give me a billion dollars. I simply cannot hire
enough welders. They no longer exist in the country. There
simply are not enough machinists or quality inspectors in the
country.''
And the only way to do that to meet the national mission of
both reindustrializing the country to compete globally in this
new world order where we are disconnecting from the Chinese
economy and to meet the emerging needs of the defense
industrial base, the only way to do that is build factories
that give the American work force superpowers, and have them
have better jobs, more highly paid jobs that are robotics and
software first, and allows us to scale as a country by
leapfrogging China with what America is best at. We still have
global leadership in software, AI, and robotics, and the point
of building these advanced factories is to give the American
work force superpowers, so that we can scale as a country and
compete globally without falling into the trap of low-paid
jobs, or simply giving up the farm and not being a
manufacturing superpower anymore, which is critically
important.
There are two critical points that are in my testimony but
I would like to reinforce, given that the time is up. One is
that much of our spend that is going to China is through
defense primes or other manufacturers in the U.S. that get paid
by the Federal Government but end up offshoring a big chunk of
their supply chain. One thing that you would immediately create
millions and millions of jobs and demand in the country is by
forcing a statement that if you get paid in America you must
have your supply chain and make it in America, without us
subsidizing the competitive landscape.
And the second thing that I would like to encourage
everyone to think about, whether it is a tariff policy or other
policy, is that we have to create an even playing field with
China. Our energy costs now, raw materials cost, not to mention
labor subsidies, are ten times greater than China's, so to
compete globally we have to find strategic ways to give the
American manufacturers a level playing field with the egregious
CCP subsidies that get put on core inputs to manufacturing like
energy and raw materials cost.
Thank you for the time.
Mr. Burlison. Thank you. And I think when the yellow light
turns on we have 30 seconds left, just as a reference.
I now recognize Mr. Czinger for his opening statement.
STATEMENT OF KEVIN CZINGER
FOUNDER
DIVERGENT 3D
Mr. Czinger. Thank you, Mr. Chairman and Mr. Ranking Member
and distinguished Members of the Committee, for the opportunity
to testify here today. I am representing my company, Divergent,
and I am also here as someone who has spent a lifetime
believing in America's capacity to lead.
I grew up working class in Cleveland, an industrial city
that once took great pride in helping power the American
economy. Football helped me earn a college education as the
first in my family to go to school, and I later served as a
U.S. Marine Corps infantryman before becoming an inventor and
technology entrepreneur. What drives me is the belief that this
country, more than any other, has the ingenuity, the grit, and
the values to lead the world in innovation and in actually
creating things.
I founded Divergent because I saw what happened to
America's industrial core. We did not just outsource jobs. We
outsourced our key core national strength. We weakened our
supply chains to save a buck in the short run, both in industry
and in Silicon Valley. We ignored the needs of our workers and
our communities. We gave China the lead. And through turning
over our supply chain to them we gave them, in plain sight,
hidden control of our national security and our economic
security.
Now we need a fix. This cannot be done through traditional,
incremental steps or going back to old technology. We must
fundamentally rethink manufacturing and the factory itself.
That is why Divergent was built from a clean sheet of
paper. We started with what the future demands today. Divergent
developed the world's first fully integrated digital industrial
system. By combining together in one system generative design,
additive manufacturing, advanced materials and robotics, we
design, print, and assemble high-performance structures at
industrial volumes faster and with greater flexibility than
ever before in the history of the planet.
It is, today, fully operational, proven across aerospace,
defense, and automotive platforms, and it is entirely built and
based here in the United States.
We have proven the system at scale, delivering components
for fighter jets, hypersonics, and space systems. We are
currently working with every major U.S. defense prime and with
some of the most demanding commercial auto companies in the
world, including Aston Martin, McLaren, Mercedes, and Bugatti.
These are production programs with cars out on the road today,
with AI-designed, 3D-printed structures built here in the
United States. These companies that I mentioned do not
compromise on quality, safety, and precision.
A depleted munitions stockpile, huge sustainment backlogs,
and obsolete parts are plaguing the Defense Department.
Divergent is ready to step in now and scale production with a
scale-ready digital factory system, faster, more resilient, and
at a far lower cost to the taxpayer.
Now think ahead: a nationwide network of next-generation
American factories across, and can be in virtually every state
of the union, that do not just build resilience, they rebuild
America's industry. This is not one factory making one product.
It is factories, each able to serve many industries, produce
any parts, and support hundreds of companies across the
country. That is what Divergent enables. That is how we upskill
the American work force. That is how we take jobs back from
China and bring them back home, under standards that uphold
human rights and deliver good wages.
This is about more than advanced technology. It is about
responsibility and resilience. It is about rebuilding an
industrial base that is accountable to the Nation it serves.
Because we have seen what happens when fragile global supply
chains break, whether in a pandemic or in a war.
After the Soviet Union launched Sputnik, President Kennedy
went to Dr. von Braun, then the Space Director of NASA, and
asked how the U.S. could catch up. Wernher Von Braun said,
``Mr. President, we will not catch them in Earth orbit. We need
to beat them to the Moon.'' The good news is in the last decade
we have done that moon shot and we now have a fully digital
factory that is ready to scale.
Divergent is proof of what is possible when innovation is
unleashed. Now think about what we could achieve if we aligned
policy, capital, and the will to accelerate this innovative
transformation. This is our chance to re-industrialize with
purpose.
Let us not only play defense. Let us play offense. Let us
not only reshore manufacturing over the coming years. Let us
leapfrog China and disrupt them with proven technology. Let us
lead again. And let us do it in a way that builds a more
vibrant, secure, and equitable America.
Thank you. I look forward to your questions.
Mr. Burlison. Thank you. I now recognize Mr. Bishop for his
opening statement.
STATEMENT OF AUSTIN BISHOP
CEO
NEW AMERICAN INDUSTRIAL ALLIANCE
Mr. Bishop. Chairman Burlison, Ranking Member Frost, and
Members of the Committee thank you again for the opportunity to
testify today.
We are at a pivotal moment in American history that demands
urgency, imagination, and national unity. The question before
us is whether America can lead the world in cutting-edge
production again but whether we choose to.
Reindustrialization is not about nostalgia or recreating a
past economy but about building a dynamic, future-facing
industrial base that strengthens national security, revives
economic mobility for working Americans, and reclaims American
leadership in critical sectors.
This is a non-partisan challenge and a once-in-a-generation
opportunity. As the Ranking Member said, work force is at the
front of this. I am a guy from Cleveland, Ohio, as well, and
over the decades that I grew up there, and certainly decades
leading up to that, I wished that there was this much interest
in ensuring that our industrial base stayed onshore. And what
we saw over those few decades is something that we have a
chance to reverse going into the future.
The COVID-19 pandemic exposed a painful truth, which is our
overreliance on globalized supply chains has left American
families vulnerable and our economy brittle. Basic goods, from
personal protective equipment to microchips, became scarce
almost overnight. Moms in the Midwest could not get baby
formula because the Suez Canal was blocked, an absurdity that
everyone must admit reveals the massive weakness created by
surrendering sovereignty over where and how things are
produced.
Resilience on far-flung manufacturing hubs, particularly in
Asia, has caused a profound loss of confidence in our system's
resilience. We are all worse off in a world where the West
cannot manufacture certain goods in abundance. That reality
forces us to rely on the good graces of distant powers to meet
our needs, weakens our militaries' ability to deter aggression
or defend its allies, and deprives millions of Americans in
every state of stable, high-productive employment in high-tech
industries.
Moreover, this vulnerability was not accidental.
Deindustrialization was a choice resulting from bad policy
decisions and flawed ideologies that prioritized short-term
cost savings over long-term national strength and discouraged
investment in capital-intensive industries. Cheap labor abroad
and foreign subsidization, combined with burdensome regulations
and protracted permitting processes, hollowed out our domestic
manufacturing base. We socialized the costs and privatized the
gains, as entire cities were reduced to rusty shells of their
former selves while the S&P 500 made record highs. We should
remember the pandemic as a warning shot: we cannot entrust our
prosperity to fragile, distant supply chains.
Further compounding this is the reality that China is an
increasingly hostile geopolitical rival and sits at the center
of many global supply chains. Today, the United States depends
heavily on China for critical minerals, semiconductors,
pharmaceuticals, ships; everyone in this room knows this, at
this point.
These supply chains could collapse overnight in the event
of conflict or even heightened tensions. We must be clear-eyed:
economic dependency is strategic vulnerability. If we cannot
produce the essentials of modern life within our own borders,
we are not truly sovereign.
Onshoring critical industries is not simply an economic
imperative but a national security mandate.
Bringing manufacturing home is also not about reliving the
past; it is about forging a better future. The future has to
look like the future. I say this again as a guy whose city is
maybe most famous for its rivers catching on fire. We are no
fans of that. The old industrial jobs of the 20th century were
the foundation of the American middle class, providing millions
with good wages, dignity, and upward mobility. Since
manufacturing's share of the GDP declined from 30 percent in
the 1950s to just 11 or 12 percent today, we have witnessed the
undeniable hollowing out of our middle class.
However, the manufacturing jobs of tomorrow will not look
like the jobs of the past. They will be extensions of the
advanced manufacturing jobs that we already have here in
America, at companies like some of my colleagues here: highly
skilled, technologically advanced careers working with
robotics, precision manufacturing, AI logistics, and more.
Onshore companies will also need workers for sales,
construction, management, maintenance. This represents millions
and millions of jobs, many of which do not require a 4-year
degree.
By investing in a modern industrial base, we can rebuild a
middle class that is not only larger but is better equipped for
the demands of the 21st-century economy.
Finally, onshoring manufacturing will ignite innovation
across our economy. Historically, industrial leadership has
been inseparable from technological leadership. When we
manufacture, we invent. When we lose production capabilities,
we lose the ability to innovate. Today America lags in critical
manufacturing R&D areas, from battery production to advanced
materials to microfabrication.
By bringing industry back home, we will secure our supply
chains and unlock new frontiers of research, entrepreneurship,
and invention. The average American will benefit far more from
reliable access to goods and a healthy, more dynamic economy
where workers share more directly in the Nation's growth and
prosperity.
Finally, reindustrialization is not about going backward;
it is about moving America forward. It is about making America
safer, more prosperous, and more unified.
It is about empowering the next generation of American
workers with the tools to build a better future.
Thank you again for the opportunity to testify. I look
forward to your questions.
Mr. Burlison. Thank you. I now recognize Mr. Hersh for his
opening statement.
STATEMENT OF ADAM S. HERSH, Ph.D.
SENIOR ECONOMIST
ECONOMIC POLICY INSTITUTE
Mr. Hersh. Chair Burlison, Ranking Member Frost, Members of
the Subcommittee, thank you for the opportunity to talk with
you today. My name is Adam Hersh, and I am a Senior Economist
at the Economic Policy Institute, where I study trade,
industrial policy, manufacturing, and the U.S.-China economic
relationship.
Today's hearing covers an important topic for legislators.
Manufacturing is a special and economically critical activity.
And I have to say I agree with most of what I have heard from
my co-panelists here about the causes of its long-term decline.
While we are having a timely discussion, the premise for
this hearing is somewhat out of date. The previous
Administration had already ignited a renaissance in key
manufacturing industries. 2024 saw the highest U.S.
manufacturing investment in our history. 2023 was the next-
highest year. This was achieved with an embrace of industrial
policy that incentivized U.S. manufacturing and defended
against unfair and mercantilist practices from our trading
partners. Now, in less than 100 days, the current
Administration has squandered this progress with policymaking
chaos, senseless cuts to critical and effective government
programs and investments, and an indiscriminate, non-strategic
approach to trade policy. Economic indicators now, for the
manufacturing sector outlook, are hitting near or at their
lowest levels in recorded history, and economic policy
uncertainty is at its highest level ever.
To be sure, industrial policies begun under President Biden
left room for improvement. But President Trump is not doing
this. He is not so much throwing the baby out with the bath
water as he is demolishing the entire bathroom. As a Nation,
this will leave us all poorer, more dependent on foreign
technology leadership, and more exposed to supply chain
disruptions.
There is another way forward. It is not going back to the
failed trade policies that brought us here, but it is also not
continuing with the chaotic, indiscriminate, and non-strategic
tariff policies we have seen for the past 3 months. Nor will we
get there with corporate tax cuts and deregulation.
The path forward is to recognize the emerging consensus in
economics that industrial policy is both feasible and
effective, and if we heed its recommendations for how and when
it can succeed. I provide some detail of this in my written
testimony. But I will summarize here by saying the economy is
rife with market failures that call for strong public sector
interventions and scientific research and coordination of
economic stakeholders. Research finds that public investments
in science yield a return on investment of between 140 and 210
percent. To put it in comparison, the long-run average return
for the S&P 500 is less than 10 percent.
Public research complements and enhances private sector
development. For example, my co-panelists here are no doubt
impressive and even visionary entrepreneurs. But they stand on
the shoulders of 3D printing technology that was developed by a
government scientist in a public research center in Japan.
In addition to research, policymakers should identify
priority industries for economic and national security
importance, analyze the unique webs of complementary
investments required to succeed in those industries, and devise
coordination strategies specific to each application. This is
how China's BYD became the world's No. 1 electric vehicle
manufacturer. They did not do it by stealing U.S. technology.
We do not have that technology here.
Succeeding at industrial policy requires substantial state
capacity, which the so-called Department of Government
Efficiency is rapidly dismantling. When China began its
economic reforms in the 1980s it did not cut its bureaucracy.
It ousted the political hacks and added millions more
bureaucrats, scientists, engineers, management professionals.
There is no successful implementation of industrial policy in
world history where state capacity is in decline.
Finally, let me talk about manufacturing jobs. These were
not always good jobs. They only became good jobs when
unionization achieved high density. As manufacturing unions
have declined so has manufacturing job quality. We will not
restore manufacturing jobs to anything like the levels in
America's economic heyday, but we can ensure that the jobs we
create everywhere in the economy provide dignity and decent
pay.
Thank you. I look forward to our questions.
Mr. Burlison. Thank you. I now recognize Mr. Perry, from
Pennsylvania, for 5 minutes of questions.
Mr. Perry. Thank you, Chairman. Mr. Bishop, it is estimated
that the U.S. has lost 3.7 million jobs since 2001, largely due
to Chinese illegal trade practices. You know, they bypassed the
trade rules, as you know, through shell companies, backdoor
tactics. They steal protected American intellectual property,
and then they use that--the products--to undercut American
sales.
Since 1981, the U.S. Federal Government--that is what China
does, right. But since 1981, our government has issued at least
one manufacturing-related regulation per week, since 1981. Now
that is a long list of regulations, which, quite honestly, has
played into China's hands, bringing our manufacturing to a
standstill, which is what they love.
Do you have any recommendations for where to start with
onshoring manufacturing deregulation? Like where do we start?
What is the highest priority, and then give us like a roadmap,
if you have one, about how to deal with that.
Mr. Bishop. Thank you for the question. I mean, to this
point, just the example of BYD that just came up, they did not
steal the technology, for sure, but they were able to leapfrog
us over the last 5, 6 years, literally because American ex-auto
executives and consultants went over and gave them the
playbook. I know this because I know a number of these ex-
executives and these consultants. And one of the reasons that
they are able to take ideas and then turn them into a reality a
lot faster is on the regulatory front.
To your point, I think one of the things that we should be
aiming the highest at, and this is certainly on everyone's mind
right now, is NEPA regulation. And again, as I said, the town
that I am from had a lot of rivers catching on fire in the
1970s. I am, for sure, no fan of that. But I think we are so
far away from where the pendulum has swung from those days, to
now we have law firms making hundreds of millions of dollars a
year just doing NEPA compliance regulation.
If I had one thing to focus on I think it would be a more
commonsense regulatory regime that is modern and built for the
century that we are in rather than something that was built in
the 1970s.
Mr. Perry. Well, as a person who is in the manufacturing
business, we, I think, on this Committee, would like your
specific recommendations on where to start, whether that is
NEPA or something else, some things that are specific that
plague us. Look, we have got a lot of work to do, right. One a
week since 1981. We obviously have a lot of work to do. But we
need to start with some kind of prioritization and get after
it.
Mr. Power, China accounted for almost 15 percent of all
U.S. imports in 2023. It is also the largest foreign supplier
of critical technology for the Department of Defense. Greg
Hayes, the CEO of Raytheon, stated that it would be impossible
for him to decouple from China due to the company's reliance on
thousands of Chinese suppliers. Meanwhile, the Communist Party
of China considers the United States of America and its
businesses not strategic adversaries, not strategic
competitors, but the enemy.
What are the real-world implications, as you see them, for
America's warfighting capabilities if we do not change course?
Mr. Power. Thank you for the question, sir. In my opinion,
we are on a 5-to 8-year clock with China threatening Taiwan.
And in the current state of the vast majority of defense
manufacturing the supply chains are so intermingled with rare
earth minerals that produce magnets.
Mr. Perry. Do not call them rare earth. They are not rare.
They are critical but they are not rare. There is plenty of
them in this country. We are just not allowed to go get them.
But carry on.
Mr. Power. That is correct, sir. I appreciate the
clarification. They are so intermingled that even--I will give
you a practical example. There are components on the F-35
program that the DoD gave an exception--I think it was a
magnet--that is in the Chinese supply chain. And it is not just
one part. It is not like a class of things, like magnets. It is
all over the place. And yes, it will take time to decouple. It
is not a trivial thing to do. But in my mind the only thing to
do is pass legislation that says if you are getting paid in
America you have to have your whole supply chain in America and
let the economic system correct. Because at this point they
could shut off a lot of our critical programs, not to mention
semiconductors, and we would be flying completely blind, and we
would simply not have the productive capacity to make it past
the first 2 weeks of a conflict.
Mr. Perry. Mr. Chairman, I yield.
Mr. Burlison. Thank you. I now recognize Mr. Frost for his
5 minutes of questions.
Mr. Frost. Thank you, Mr. Chairman. I am really glad that
my Republican colleagues want to continue the Democratic
historic efforts to rebuild America's manufacturing sector and
revitalize local economies, an effort that has led to the
creation of over 700,000 manufacturing jobs during President
Biden's term.
But the goal is not simply just the quantity of jobs but
also the quality of these jobs, as well. We have to be focused
on creating manufacturing jobs and working conditions that
allow workers to actually prosper and support their families.
This includes rules for better worker safety, increases in OSHA
inspections, an emphasis in prevailing wages when awarding
Federal funding, and working closely with organized labor.
Mr. Hersh, how does a unionized manufacturing work force
benefit workers and the manufacturing industry?
Mr. Hersh. Thank you for the question. It benefits in
several ways. No. 1 is it attracts high-skilled work force with
good wages and good compensation, and it retains them so that
they can accumulate skills on the job that get fed back into
the production process.
No. 2 is it gives the workers from the shop floor, who
understand the production process, the ability to contribute
and work with management in designing more efficiencies and
improving production as well as innovating and products.
Mr. Frost. And how does a unionized manufacturing work
force also benefit the people who buy their products and the
people in the community as a whole?
Mr. Hersh. Well, this is something that Henry Ford
recognized when he started paying a living wage to his workers
back at the turn of the previous century. He recognized that
for workers in communities to be able to have the consumption
to meet the growing production capacity of our economy they
needed to be paid a decent wage. So, unions help provide that
decent wage. When unions go away, the wages of the
manufacturing jobs decline. We have been adding manufacturing
jobs, but on net, in large part, these are in parts of the
country where labor standards are quite low and not very well
enforced. So, while manufacturing has been expanding, the
quality of those jobs has been in decline. Essentially we are
creating American maquiladoras.
Mr. Frost. And union apprenticeships can also help us, and
they frequently boost manufacturing by helping provide us with
the skilled and reliable work force that is needed. Mr. Hersh,
what do these moves tell us about the quality of manufacturing
jobs that Trump policies will create? And the moves I am
talking about are the fact that President Trump has tried to
convince workers that his policies will be good for them, while
at the same time working aggressively to attack collective
bargaining rights and the agencies responsible for protecting
worker health and safety.
Mr. Hersh. Well, I think Commerce Secretary Lutnick has
given us a clear vision of what these jobs will look like from
the Trump administration. He says that Americans should be
screwing little screws into iPhones. Now, these are not the
jobs of the future that are going to make our country
prosperous again.
Mr. Frost. The Trump Administration also is working
aggressively to strip Americans of their regulatory
protections. This is problem for all of us as industrial
hazards go beyond the factor door and extend to surrounding
communities, as well. Without these protections in place and in
force, these hazards threaten our drinking water, the air we
breathe, the food we eat, and the products we use. Some would
have us believe that it is a zero sum game, that you have to
pick one or the other, zero regulation, rolling everything
back, or regulation up the wazoo and no one can do anything.
But I think with the use of a core technology and a skilled
work force and good workers we are able to have a world where
everybody can thrive.
Mr. Hersh, how do current regulatory protections keep
manufacturing workers safe, not just at work but when they are
at home, as well?
Mr. Hersh. These regulations exist for a reason, and often
they are working so well that people have long forgotten the
problems that they were put in place to solve. When we take
them away they are going to be problems again. And what they
will do is shift the costs and the risks from the companies who
are doing this to the workers, to the communities where
production is happening, to the country as a whole and
consumers.
You know, people do not want to have polluted water and
polluted air in their communities. They do not want their kids
playing on a playground where there are toxic chemicals in the
air. They do not want to go fishing where there are toxic
chemicals in the water. So, these regulations play an important
role in preventing that.
And the way we could be using tariff policy instead of this
chaotic and indiscriminate approach, which is disrupting and
causing so much uncertainty, is we could be using this to
create a regime of high standards, whether it is for worker
rights or whether it is for environmental protection, whether
it is for stopping the pollution of carbon emissions, putting
those costs back onto the goods that are being produced abroad
without those protections.
Mr. Frost. Thank you. I yield back.
Mr. Burlison. Thank you. I now recognize myself for 5
minutes. I want to start, Mr. Czinger, during one of the
previous witness's testimony it was said that you, American
manufacturing, is standing on the shoulders of 3D printing that
was developed by other governments in Japan. Would you say that
is accurate, that you are standing on the shoulders of that
technology?
Mr. Czinger. Specifically, as to what we do, our printing
machine is not based on any Japanese patents. It is solely
based on U.S. inventions, a U.S. supply chain, and is built
within our factories in the U.S.
Mr. Burlison. Thank you. Many critics argue that
manufacturing simply cannot return to the U.S. because we have
high labor costs. From your perspective, what is the strongest
counter-argument to that?
Mr. Czinger. The strongest counter-argument is that right
now we have European carmakers, that we are relatively high-
cost labor market, California, shipping to Aston Martin and
other companies. So, Aston Martin, Bugatti, McLaren, Mercedes,
and Porsche, these are customers of an American company, with
American workers, shipping today. I think that is because
American innovation can create tools for American workers that
allow them to do things faster, better, and cheaper. And when
that happens, then you create a competitive manufacturing
infrastructure, which we absolutely can have, and we absolutely
can rebuild our global manufacturing market share. But it has
to be based on new leapfrog technology that exists today
commercially.
Mr. Burlison. Can you give us an insight as to the issues
regarding supply chain, for example, the resources that you
need? You have some objects in front of you that are printed
with a type of aluminum. I think that the last aluminum smelter
was in southeast Missouri--it is no longer there--in the United
States. Is there any concerns about the core materials in that
supply chain?
Mr. Czinger. I would say we have a variety of materials
that range from aluminum alloys we develop to high-temp
materials for hypersonic applications to high-strength
materials for munitions. From the very start, and the company
was founded about a decade ago, we wanted to make sure that we
had a secure supply chain, so we use U.S. allied suppliers.
What I would say is these are metal powders. That atomization
process, there is no reason that with different areas in the
United States that have cheap, abundant energy, such as natural
gas, that we could not bring back atomization production of
metal powders and scale that as we build advanced
manufacturing. And that is something we absolutely can do and
should do.
Mr. Burlison. Mr. Power, we have had previous hearings on
the situation with our energy infrastructure. Can you expound
on what companies, what is going through their process when
they are deciding where to locate a facility, and how much does
electricity cost and availability play into that?
Mr. Power. Thank you for the question, Mr. Chairman. Energy
costs and regulations related to energy are a huge part of
where we decide to put new factories in the United States.
First, just for speed of building you would be probably
surprised at how hard--we could build a factory faster than we
could get the permits to rig up electricity to it, in certain
states, which is a huge barrier to speed and pace, especially
in the United States. And energy costs are such a huge part of
our cost base that compared to China I think our energy cost is
10 to 20 times, without subsidies.
And the second point I would make on energy costs is 95
percent of the cost of aluminum, as an example, is actually the
cost of energy. So, having energy too cheap to medium in the
United States is not just helpful for running factories and
having energy grids that can scale with all these advanced
factories, but also for the raw material costs and inputs that
are being passed on to our customers. So, I think it is
incredibly important, and strength of the grid, clean power,
and then the cheapness and scalability of that power really
drive a lot of the decisions of where we put factories, where
we put data centers, and any advanced facility going into the
American states.
Mr. Burlison. Thank you. I yield back, and I now recognize
Mr. Khanna, from California, for 5 minutes.
Mr. Khanna. Thank you, Mr. Chair. Mr. Power, I appreciated
your testimony and your focus on innovation, your focus on
stabilizing demand, on building capacity. I noticed, even
though you are here as a Republican-called witness there was a
word missing in your testimony, the beautiful word of
``tariffs.'' I assume by that omission you do not think that
President Trump's tariff strategy is working in building
advanced manufacturing here.
Mr. Power. Thank you for the question, Congressman. We are
not really impacted by tariffs, and it is hard for me to
comment on it directly in this hearing, because our entire
supply chain is regulated, that we have to have everything from
raw materials and everything onshore. So, for United States
companies that serve the defense market, we do not really buy
anything offshore, and it is hard for me to comment on----
Mr. Khanna. Mr. Power, you are certainly a thoughtful
person. I mean, if the President asked you, do you think his
tariff policy is working to bring advanced manufacturing into
the United States, would you answer yes or no?
Mr. Power. I think we are starting to see countries come to
the table and negotiate. But my perspective is purely China
focused.
Mr. Khanna. So, do you think his policy is working, in
terms of the way he has implemented the tariff policies?
Mr. Power. I think we are going to start to see tariffs
work over the next 90 to 100 days. As things settle down----
Mr. Khanna. You support his tariff policy.
Mr. Power. I think tariff policy that means China cannot
hide manufactured goods going through other countries----
Mr. Khanna. No. I am not asking you theoretically. I am
saying the way the President has gone about the tariff policy,
do you support it or not?
Mr. Power. Yes, largely I support tariff policy to reshore
United States manufacturing.
Mr. Khanna. Do you support Trump's tariff policies?
Mr. Power. Yes.
Mr. Khanna. Mr. Czinger, do you support Trump's tariff
policies? Mr. Czinger, do you support Trump's tariff policies
as he has implemented it?
Mr. Czinger. I am not an expert on tariff policies, and I
would tell you I am an expert----
Mr. Khanna. Do you support----
Mr. Czinger. If I may----
Mr. Khanna. You know, I noticed none of the Republican
witnesses mentioned tariffs, the beautiful word ``tariffs.''
Here he is, on a manufacturing industrial policy, the three
Republican experts are recommending everything but tariffs,
everything but tariffs. Your testimony did not have tariffs.
Correct?
Mr. Czinger. I am an expert on enabling advanced
manufacturing scale-up in the United States and not on tariffs.
Mr. Khanna. Did your testimony have any word of tariff in
it, your opening testimony?
Mr. Czinger. Of course not. I did not come to testify on
tariffs.
Mr. Khanna. Mr. Power, did your testimony have any word
``tariff'' in it?
Mr. Power. No, sir. I was asked to testify on bringing in
advanced manufacturing to the United States.
Mr. Khanna. Mr. Bishop, did your testimony have anything to
say with tariffs in it?
Mr. Bishop. No.
Mr. Khanna. So, the three Republican witnesses come to a
hearing on industrial policy, and none of them mentioned the
word ``tariff,'' not a single one. And yet all Donald Trump is
doing is tariff policy, when the three Republican witnesses are
recommending 100 different things other than tariff policy.
Mr. Bishop, do you agree with Donald Trump's tariff policy?
Mr. Bishop. I am not here as an economic expert.
Mr. Khanna. You are saying you are not here as economic
experts, and yet you are giving us all of these recommendations
for how we build an industrial base. Is it that you do not have
any expertise that we should just pick up any random citizen,
or are you here with some economic expertise on industrial
policy?
Mr. Bishop. Is that for me?
Mr. Khanna. Yes.
Mr. Bishop. Oh, sorry. I misspoke on this. I mean, On
tariffs, this is just one--like these guys, as well, we are
focused on building companies here.
Mr. Khanna. But I do not understand how----
Mr. Bishop. And there is----
Mr. Khanna. The President of the United States is saying
the way to build manufacturing is to have these tariff
policies. You are here to testify on manufacturing, how we are
going to build it, and you are telling me you do not have an
opinion of whether the Trump tariff policy is successful or
not?
Mr. Bishop. We are here to represent private industry,
people who are actually building companies, not people who are
theoretical.
Mr. Khanna. This is not a theoretical matter. He has
implemented tariffs. I am not even trying to trick you. Do you
agree with all his tariff policies or do you disagree with
them? Or are you so afraid that you do not know what to say?
Mr. Bishop. I think all of us have been really clear. This
is not what we are here to talk about.
Mr. Khanna. But do you agree with it or disagree with it?
Yes or no? I mean, you can say either thing.
Mr. Bishop. I have the same position as these guys. We are
here to talk about how to incentivize more manufacturing and
industrial jobs.
Mr. Khanna. Right. But do you think that the President's
tariff policies are doing that, or not?
Mr. Bishop. I think it is a mix. As Chris said----
Mr. Khanna. Do you think some of it is correct and some of
it is wrong? Do you think some of Trump's tariff policies have
not worked?
Mr. Bishop. No, I am saying I agree with actually what
Chris was saying, which is that what we have seen so far, and
what we are going to be seeing over the next 90 to 100 days has
been really interesting, especially as more countries are
coming back to the table. But I cannot----
Mr. Khanna. It is mind-boggling to me----
Mr. Bishop [continuing]. Tell the future.
Mr. Khanna [continuing]. That three of you are so afraid of
criticizing Donald Trump that even though you do not mention
tariffs in any of your testimonies, none of you are willing to
say that this policy is totally backfiring.
Mr. Bishop. I just do not want to try to predict the near
future. I am not a mind reader. I do not know what is going on
in the minds of the counterparties in other countries, and I
think this is an inappropriate place to be asked.
Mr. Khanna. Inappropriate to ask you about tariff policy in
a manufacturing hearing, when that is the President's policy?
Anyway, my time has expired.
Mr. Burlison. Thank you. I now recognize Mr. Donalds from
Florida, for 5 minutes.
Mr. Donalds. Thank you, Chairman. I think I am in Committee
at the opportune time. Look, this is a great hearing about
bringing manufacturing stock back to the United States. At the
end of World War II, about 40 percent of the world's
manufacturing capacity was here in America. Today, depending on
who you ask, maybe around 15 percent, maybe lower, maybe a
little bit higher.
I want to ask all three of the witnesses--actually, I will
ask you too, Mr. Hersh--what has actually been the No. 1 driver
for a lack of manufacturing capacity in the United States since
World War II? Mr. Power.
Mr. Power. Thank you for the question, sir. In my mind it
is specific CCP policies that have artificially subsidized,
well past the cost of good jobs and competitive labor in
America, where if you will remember there was a large language
model like Deep Seek that got released by China, and they are
charging one-hundredth of a use case versus OpenAI. And they
are doing that to draw the consumer into using that product
more and more and more, which obviously then captures data.
It is the same sort of industrial policy that has been
going on for the last 40 years, where we could buy a block of
raw material in the United States, of aluminum, and it will be
twice as expensive as the fully landed cost, including
shipping, of that same component from China. And it is not
possible for them to be so cheap and competitive, apart from
the slave labor conditions, because they aggressively subsidize
energy, raw materials, and kind of reverse tariffs, where if I
sell something to you from China to the U.S. I get a subsidy
back from the CCP.
It is a strategic policy that has pulled the manufacturing
out of the United States for the last 40 years, and it has been
done very intentionally. So, it is artificial, anti-competitive
subsidies that have pulled that cost base out of the United
States, and therefore destroyed millions and millions of
American jobs, is my opinion on the one core reason.
Mr. Donalds. Mr. Czinger, do you choose to add or bring
your own knowledge?
Mr. Czinger. Yes, I will add something briefly, which is if
you look at 2000, China had a 7 percent global manufacturing
market share, in 2000. That was a brief 25 years ago. With WTO,
I would say two things. Going to what Mr. Powers said, we did
not enforce any of these violations by China after we gave them
most favored nation status, and obviously they understand that
national security is directly connected, and being a world
power is directly connected to global manufacturing market
share, and they went about using a set of policies to capture
that.
At the same time, I would say driven primarily by some of
our large technology companies, we started to outsource
manufacturing to companies like Foxconn. So, if you look at the
actual kind of Industry 4.0 scale-up of automated CNC
machining, computer numerically controlled machining, between,
I would say, between 2006 and 2016, you saw Apple pour $100
billion plus into Foxconn, a China-based contract manufacturing
company, and they went from a couple hundred CNC machines to
150,000 automated, lights out, by 2016.
Those two things, allowing people to cheat and undermine
you from a national strategy, global strategy standpoint, and
then having our process IP relating to manufacturing from our
most advanced companies offshored to contract manufacturers and
building that contract manufacturing industry around Foxconn
and other contract manufacturers, that is what drove it.
Mr. Donalds. Thank you, Mr. Czinger. Mr. Bishop.
Mr. Bishop. I would just echo what both of my colleagues
here have said. I mean, especially if you drill into the supply
chains that go into the DoD right now and the massive
permissive use of waivers; I mean, there are already plenty of
rules in place that would, in theory, disallow everything from
electronic components to just basic machine parts that go into
all the crucial material and devices that our warfighters use.
And the reality is just the massive, rampant use of waivers has
been a huge problem, and when you actually go and drill down
into that supply chain you are finding not only direct links to
China, which are the easy ones to find, but this huge web of
shell companies and shell relationships between shell companies
that effectively allow China to have, I mean, first of all, a
huge supply chain risk directly in the DoD and anywhere
wherever we want to project power.
Mr. Donalds. Gentlemen, I am sorry. Mr. Hersh, I am sorry.
Five minutes goes fast in this town. I appreciate that. I think
it is important for the Committee to recognize that while the
goal overall is to bring manufacturing back to the United
States in as much of a capacity as we can, either onshore or
nearshore, one thing is crystal clear: we have not been minding
the store in the United States when it comes to trade policy
writ large, especially when it comes to enforcement of trade
policy.
And with that I yield back.
Mr. Burlison. Thank you. I now recognize Mr. Min, from
California, for 5 minutes.
Mr. Min. Thank you, Mr. Chair, and I want to thank you for
bringing this hearing forward. I also share the panelists'
concerns around China and the threat they pose to our economy.
I also share the desire of everyone speaking today to bring
back manufacturing to the United States. And I represent a
district that does not have a lot of manufacturing. But I
wanted to start--and obviously it is important for our
economy--I wanted to start here by just following up on the
comments of Mr. Khanna. I note that all of you up there on the
Republican side said you are not economists. I wanted to give
Dr. Hersh, an economist, a chance to weigh in, as well, to
following up on Mr. Khanna's questions.
Mr. Hersh. Yes. I guess I am the only one up here who
supports tariffs, in theory. When a tariff is targeted and
strategic it can be an effective tool for supporting industrial
development. But what we are seeing under President Trump's
policy is the opposite of that. It is broad based. It is
indiscriminate. It is non-strategic. It is going to be a
disaster.
Mr. Min. Yes, so I guess what you are saying, if I can
summarize, is that tariffs can be a tool to address some of the
strategic and uncompetitive behavior we are seeing out of
places like China, but not when they are applied in such a
blanket and haphazard way as we are seeing right now.
Mr. Hersh. Absolutely, and we have seen that just in the
past week or so with a determination on shipbuilding, on solar
panels. We saw President Biden invoke a 100 percent tariff on
Chinese electric vehicles. These are all things that will
contribute to rebuilding manufacturing, including the steel and
aluminum tariffs of Mr. President, of Mr. Trump, which helps
keep that smelter which Chair Burlison referenced, online for
much longer than it could have been.
Mr. Min. So, I want to follow up by nothing that the view
that you expressed now is shared by many others. In fact, I
would say it is a consensus view among economists. And I know
the other three are not economists. You are very careful to say
you are not economists and have no views on the strategic
effectiveness of these tariffs.
But I just want to quote Jerome Powell, who said a few
weeks back that the Trump tariffs are likely to cause, quote,
``higher inflation and slower growth.'' Janet Yellen, former
Secretary of the Treasury, described Trump's tariffs as, quote,
``the worst self-inflicted wound that I have ever seen an
Administration impose on a well-functioning company.''
I also want to bring it back to a company in my district
that does do some manufacturing. They do electronics
manufacturing. And one of the things that I did not hear any of
you talk about is the way that the global supply chain is
constructed these days, that a lot the manufacturing that takes
place in the United States is dependent on parts and
improvements made cross-border. The gentleman I am describing
here, who spoke at a roundtable we had, talked about how his
goods are typically adjusted or improved in Mexico, maybe in
Singapore. They come back to the United States. They cross the
border many times. Each time they are potentially subject to a
tariff, and the aggregate of that is going to have huge
impacts. He described this as something that is an existential
threat to his business, the tariffs that Trump has proposed.
Mr. Hersh, do you have any comment on that?
Mr. Hersh. Yes. So, nothing is 100 percent made in America.
Across the U.S. manufacturing, about 45 percent of the value
added comes from imported content. We cannot just rip that out
at the roots. We have to have a strategic approach to gradually
replace that without disrupting the businesses that are already
operating. And when we put 145 percent tariff on China without
that strategic approach in place then foreign competitors in
manufacturing can access all those intermediary inputs without
paying a tariff, that is putting U.S. manufacturers at a
disadvantage.
Mr. Min. I will just close by noting that I was just in a
congressional delegation a couple of weeks back to Korea, and
we met with a number of the chaebol out there--Hyundai, LG,
Hanwha. A number of them have actually committed hundreds of
billions of dollars to manufacturing in the United States,
following Trump, one, to try to build out manufacturing
capacity here in the United States, but also in response to
clear incentives. We talk about a stick-and-carrot approach. I
think we can characterize Trump's tariffs as a big, massive
stick that is going to club every economy in the world. We had
the carrots approach from the Biden Administration with things
like the Clean Energy Tax Credits to incentivize solar, EVs, et
cetera, the CHIPS Act, which is starting to bring
semiconductors back.
And I will just tell you and share with you that these
companies were very concerned about the tariffs policies but
also very concerned that the Trump Administration would pull
back on some of these tax incentives and other incentives that
actually made manufacturing pencil out in the United States.
What are your views, and I will ask this quickly to the
panel: Mr. Power, Mr. Czinger, Mr. Bishop, Mr. Hersh, on these
programs that actually seem to bring manufacturing back to the
United States?
Mr. Power. Whether it is a carrot or a stick policy or
regulations that make easier to produce Americans jobs, I
support both sides, whether it is the carrot or the stick.
Mr. Min. You support keeping those programs in place.
Mr. Power. Which programs? Sorry.
Mr. Min. The Clean Energy Tax Credits, the CHIPS Act, some
of the IRA incentives that have seemed to bring manufacturing
back.
Mr. Power. Yes, CHIPS Act was a great bipartisan
legislation that was designed to bring massive semiconductor,
which is such a critical piece of the supply chain.
Mr. Min. Thank you. I think I am out of time, so Mr.
Czinger.
Mr. Czinger. I would agree with the comment on the CHIPS
Act.
Mr. Min. What about the Clean Energy Tax Credits?
Mr. Czinger. I would have to look at them in more depth to
be able to give you a reasonable answer.
Mr. Min. Mr. Bishop.
Mr. Bishop. I support all of the above. We are trying to
incentivize more jobs here and more innovation.
Mr. Min. Thank you for that answer. Mr. Hersh?
Mr. Hersh. Pulling back on these policies now risks
stranding hundreds of billions of dollars in investments and
jobs. And I will say my co-panelists have talked about the
issue of energy costs. Just in the past 3 months, $8 billion of
new energy projects, supporting 8,000 jobs, have been canceled.
Mr. Min. Thank you. I yield back.
Mr. Burlison. Thank you. I now recognize Mr. Higgins, from
Louisiana, for 5 minutes.
Mr. Higgins. Thank you, Mr. Chairman. Mr. Bishop, from your
perspective what happens to the sovereignty of a nation when it
loses its industrial base?
Mr. Bishop. Well, that is a softball question, I feel like,
and I appreciate it.
Mr. Higgins. It is a setup for a hard one.
Mr. Bishop. I imagine. No, and I am slightly joking because
you would think it would be an obvious answer, but it seems
like over many decades no one has taken this as a softball
question, has either not taken it seriously or has come to the
wrong conclusion.
Mr. Higgins. So, clearly you concur that the sovereignty of
a powerful nation will gradually disintegrate with the gradual
loss of its industrial base.
Mr. Bishop. You cannot have one without the other.
Mr. Higgins. You cannot have one without the other. There
you go. So, the loss of American industrial base, largely to
China--let us just talk about China--would you concur that
there has been some perceived price advantage for products on
the shelves, that this has been a foundational like driving
factor, setting aside the details, basically, people want more
stuff and cheaper stuff, right?
Mr. Bishop. That has certainly been the driving narrative.
Mr. Higgins. Clearly. So, the price advantage, the price
advantage from goods manufactured in China, transported across
the ocean to America, ends up on American shelves, that price
advantage. In some way, is that price advantage the result of
some combination of subsidized endeavors from communists, child
labor, and slave labor?
Mr. Bishop. All of the above.
Mr. Higgins. All of the above. So, there you go America. I
want you to think about this, please, as a child of God, as a
compassionate human being. Do you really want a cheaper product
on the shelf that has been subsidized by communists and
produced with child labor and slave labor? This is what the
Trump Administration and some conservatives in Congress are
pushing back against. We seek to establish the truth, that
cheap products, produced in abhorrent conditions, on foreign
soil, subsidized by communism, and produced by child labor and
slave labor, not only should they not be available for a
cheaper price on our shelf, they should not be available at all
on American shelves, in the opinion of some.
So, we not only support the aggressive effort of our
executive branch to push back against this worldwide, but
particularly with China, we not only support it, we demand it.
And some of us, I am 63 years old. I have watched our
industrial base disintegrate in my lifetime. And what we hope--
and I am going to ask you, Mr. Bishop, to address what this
means for the next generation. I am prayerful that we can fix
this thing in this Congress, at least change the trajectory of
trade imbalance by insisting upon core principle trade deals
with nations like China. And we have to be aggressive about it
for the coming generation.
Mr. Bishop, how would you see, if we fix this thing, what
happens for the next generation of Americans, if we restore the
industrial base of our sovereign nation?
Mr. Bishop. It is a golden era. I mean, you look at where
the cities where we used to produce things, St. Louis,
Cleveland, Pittsburgh; I mean, these were some of the richest
cities not just in the country but in the entire world. We
literally called it a ``Gilded Era.'' And what has happened
over the last century, and has certainly accelerated over the
last two decades, is something that is reversible, but we have
to get very, very serious about it.
Mr. Higgins. Do you believe a new ``Golden Era,'' that has
been described, is achievable, good sir, if we make the
necessary corrections now?
Mr. Bishop. We still have time, but in my opinion we have
to get really serious right now.
Mr. Higgins. Well, Mr. Chairman, we are really serious
right now. Thank you for convening this hearing, and I yield.
Mr. Burlison. The gentleman yields. I submit for the record
a document from the National Association of Manufacturers,
giving recommendations for how to improve manufacturing in the
United States.
Without objection, so ruled.
Mr. Burlison. And I now recognize Mr. Frost for his closing
statement.
Mr. Frost. Well, thank you so much, Mr. Chairman, and thank
you to the witnesses again, for coming to share your expertise
on a very important subject, ensuring that we continue the
manufacturing boom we saw under the Biden Administration, into
the future. Like I said, this is about, of course, the quantity
of jobs but also the quality of these jobs.
But I also have to bring up something that one of my
colleagues, Representative Khanna, had brought up, and it has
to do with the tariffs policy. And while advanced manufacturing
creates job, that number of jobs will pale in comparison to the
negative impact of Trump's tariffs. Tariffs are a tax on all
consumers. They put the heaviest burden of that tax on middle-
and working-class Americans. One of the witnesses is shaking
his head no, but we just went through this, and you all
conceded that you know nothing about tariffs and have nothing
to say about it.
Tariffs will result in greater unemployment, as well. I
have three unanimous consent requests. The first one is an
article from CNBC from April 7, 2025, entitled, ``This Is a
Trump Recession, CEO Says, With Tariff Price Increases, Job
Losses Coming.''
Mr. Burlison. Without objection.
Mr. Frost. The other one is an article from The
Independent, April 22, 2025, entitled, ``Trump Tariffs Driving
Thousands of Layoffs at U.S. Manufacturing Plants.''
Mr. Burlison. Without objection.
Mr. Frost. The third one is a report from the Center for
American Progress from April 10, entitled, ``Trump Tariffs
Pause Doesn't Pause Economic Pain, Will Cost Families $4,600 a
Year.''
Mr. Burlison. Without objection.
Mr. Frost. This is important. I appreciate the nuances in a
lot of the ideas we heard from all of our panelists that were
brought up today. But if you were to ask the President what he
is doing to bring back U.S. manufacturing, he would tell you to
look at his tariff policy. And so, it being brought up here I
think was completely germane to the subject at hand, and
hopefully next time we can dive into that, as well.
Thank you so much, and I yield back to the Chair.
Mr. Burlison. Thank you. Now, in my closing statement,
again, thank you witnesses for coming today. Today's testimony
has made one thing clear to me, something that I did not have
before, which is hope. Mr. Power, Mr. Czinger, and Mr. Bishop,
the efforts that you guys are working on gives me a level of
hope.
U.S. manufacturers stand ready to expand production here in
the U.S., hire American workers, and bring critical
manufacturing capabilities back onshore. Financial backers of
manufacturing, moreover, are not waiting for a miracle. They
have been waiting for a signal, and now they have it, from
President Trump, from Congress, and from the American people,
that the U.S. is serious about rebuilding our once great
manufacturing prowess. Americans want to produce here in
America. They are willing to buy products made here. The demand
is not just patriotic. It is economic, strategic, and it is
cultural. It is about security, self-reliance, and yes,
national pride.
Reviving American industry is not just an economic goal. It
is a national imperative. Industrial strength built this
country. It won our wars. It fueled our prosperity and lifted
generations out of poverty and into the middle class. And we
can do it again.
American factories can roar again. Let us seize this moment
not just to restore what was lost but to build something even
greater. Let us make American manufacturing not just a memory
of the past but the backbone of our future. Reindustrializing
will make America great again, and we should all strive to help
make that happen.
Again, thank you for your time today, and with that, all
Members will have 5 legislative days within which to submit
materials and to submit additional written questions for the
witnesses, which will be forwarded to the witnesses for their
responses.
And if there is no further business, without objection the
Subcommittee stands adjourned.
[Whereupon, at 12:24 p.m., the Subcommittee was adjourned.]
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