CFR Report Takeaways: How to Reshape U.S. Defense Production to Counter China

Michael C. Horowitz is a coauthor of the Council on Foreign Relations (CFR) report Out of Ammo: A Two-Year Sprint to Rebuild the American Arsenal and Deter China. He previously served as deputy assistant secretary of defense for Force Development and Emerging Capabilities and director of the Pentagon’s Emerging Capabilities Policy Office. He is now the director of Perry World House and Richard Perry professor at the University of Pennsylvania.

Operation Epic Fury and the ongoing conflict with Iran have pushed a long-simmering problem onto the front page: the U.S. military does not have enough of the weapons and platforms it needs to deter and fight wars. The consequences are reverberating not just in the Middle East, but around the world. 

Before the topic hit the headlines, the China Strategy Initiative and the Defense and National Security Program at CFR convened a study group to review the future of the U.S. defense industrial base and the reforms needed to maximize U.S. military power over a two-year period and a ten-year period. Drawing on the conversation in the study group—which included experts with extensive military, policy, industry, acquisition, and congressional experience—CFR has released a new report that illustrates how the United States’ exclusive reliance on exquisite, expensive, hard-to-produce weapons and platforms is unsustainable.

This is especially true given ongoing military operations around the world and the magnitude of the challenge posed by China’s military modernization. Rebuilding an arsenal of expensive cruise missiles, exquisite air defenses, and hard-to-produce ships cannot occur within a two-year period regardless of the resources the government or private sector invests. Although government and industry are working with newfound urgency to boost replenishment rates for these munitions—which are central to the current U.S. warfighting strategy in the Pacific—their efforts will take many more years to bear fruit. The U.S.-Israeli war with Iran has also severely depleted stocks of critical munitions, including air defense interceptors and precision-guided munitions, that will need to be rebuilt.

Instead, the authors concluded that the United States should spend the years ahead, especially the next two, maximizing its investments in precise mass systems—lower-cost, more attritable, more autonomous weapons, sensors, and platforms—that can be built based on commercial manufacturing and draw on lessons learned from Ukraine’s fight against Russia and even Iran’s operations against the United States. 

Read some of the report’s main takeaways below and the full report on CFR.org.

The next two years matter

Without urgent action, the United States is becoming increasingly ill-equipped to deter or defeat Chinese aggression in the Western Pacific, particularly if China were to invade or blockade Taiwan. To address this gap, the Department of Defense and Congress should implement far-reaching reforms to enable the production, acquisition, and deployment of precise mass systems: an emerging class of military capabilities that includes drones, sensors, and enabling technologies. Precise mass systems can be manufactured cheaply, fielded rapidly, expended freely in combat, and sustained readily at scale in wartime. 

If tension with China escalate in the next two years, victory could depend on spending already appropriated funds more quickly, relaxing procurement rules, and using every available industrial policy tool to expand production rapidly. 

Unlike legacy munitions and platforms, precise mass systems can be scaled in a two-year period due to their use of commercial manufacturing, less exquisite designs, and lessons learned from Iran, Ukraine, and the inventions of U.S. industry over the last several years. Adopting precise mass at scale over the next two years is the most viable way to deter China from pursuing military conquest and coercion or deny it success if it chooses such courses of action. 

Given the two-year window, this report does not attempt to redesign the entire defense industrial base or propose sweeping structural reforms (the next report will tackle a ten-year period). Some recommendations are temporary departures from normal practices; others are durable reforms. All recommendations will strengthen U.S. military capabilities in theaters beyond the Pacific. Washington needs to immediately put production of precise mass on a wartime footing. Waiting until conflict begins will be too late. 

Congress and the White House should act now

The report outlines several critical recommendations, including these four that Congress and the White House should implement today. 

Each of these changes is within reach of the current Congress and Pentagon, but they require a new level of urgency. The two-year clock is already running.