Critical Minerals and Rare Earth Elements

Four points framed Dr. Doshi’s remarks to the U.S. Senate Committee on Banking, Housing, and Urban Affairs. First, China is an ambitious and formidable competitor unlike any the United States has faced. Second, the United States needs the Defense Production Act (DPA) to cope with China’s overlapping military and nonmilitary threats. Third, China’s system has far broader authorities than the DPA, putting us at a disadvantage. Fourth, smart reforms to the DPA can address concerns about overuse without narrowing its scope. China seeks to “catch up and surpass” the U.S. technologically; to make the world dependent on China’s supply chains economically; and to acquire the capability to defeat U.S. forces militarily The PRC is now 130% of U.S. GDP by purchasing power, two times the U.S. share of global manufacturing, and two times U.S. power generation. Without DPA reauthorization, the U.S. simply cannot address China’s military and non-military threats. Beijing is undertaking the fastest military buildup in history. It now boasts two-hundred times our shipbuilding capacity, eighty percent of global drone production, and global leadership in hypersonics. The U.S. also face new non-military challenges including cyberattacks and geoeconomic warfare. The DPA is critical to addressing these threats. DPA Title III can fund new production lines for cruise missiles and uncrewed systems, expand shipyard capacity, and reshore the batteries, motors, and rare earths China now makes. DPA Title VII can help the U.S. find PRC threat vectors in American networks and critical dependencies in our supply chains. And DPA Title I and Title III can help the U.S. reallocate goods or boost production after a debilitating cyber or supply chain attack. China’s defense production authorities also vastly exceed America’s. The PRC requires all citizens, companies, universities, and state-owned enterprises to fully support defense mobilization. Effectively, Beijing has total power to redirect production, reassign personnel, and requisition property. The U.S. can reform DPA without narrowing its scope. Congress could consider updating the definition of “national defense” to make DPA flexible and strategic without making it a catch-all tool. Congress should allow DPA Title III investments in allied nations supporting the U.S. defense industrial base. Next, Congress should establish multi-year DPA Title III funds and authorize and appropriate funding for key national security priorities like missile production or rare earth processing. Finally, Congress should appropriate funds and encourage agencies to reactivate the now dormant National Defense Executive Reserve, originally established under DPA Title VII, to ensure a pool of industrial experts are available in a crisis.