House hearing on the lessons being learned from the coronavirus and how its affecting critical supply chains. Live coverage here on cspan3. Community safe, all started to become familiar with navigating this technology, i do want to remind members of a few procedures. First, consistent with the regulations, the committee will keep microphones muted to limit background noise. Members are responsible for unmuting themselves when they seek recognition or when recognized for their five minutes. Members and witnesses must have their cameras on at all times. Weve got to keep track of you even if you step away from the proceedings. Please leave your camera on rather than logging out. Finally as you know, we may have votes during todays hearing. It looks like theyre going to be later. If we do have votes, it would be my intention not to recess. Members should vote when their group is up and come back immediately. If your turn for questioning comes up while youve stepped away, i will get back to you. Today were holding a hearing on trade manufacturing and critical supply chains, lessons from covid19. Its a little poignant for us to start our proceedings, First Committee activity that ive been involved with since we lost mr. Lewis who really set the standard on so many Different Levels with the conscious of the committee, was someone who touched us all, and showed not just courage and stamina, but humility that is rare in our environment. He was truly a unique human being and will be sorely missed. He will continue on in our memories with all the great times and experiences that weve shared with him. As john lewis would have wanted, we must continue the peoples work. And i hope all of our work will be guided by his principles and his valiant example. Today marks the First Virtual hearing of the trade subcommittee. The hearing topic is one of the upmost importance for our ability to emerge from this ongoing covid19 pandemic with a stronger, more resilient economy. Reexamining the trade and manufacturing policies that have led to a fragile, brittle and opaque Global Supply chains and amplifying the painful lessons were learning from covid19 to make sure were better prepared for the inevitable future crisis and challenges. The pandemic highlights the impact of globalized supply chains, designed to pursue the lowest price whatever the true cost without appropriately accounting for possible risks such as an anticipated disruptions to sourcing, relying on complicated supply networks easily disrupted and losing key manufacturing flexibility in the United States. I think we fail to fully appreciate these vulnerabilities. The pandemic has revealed the almost total extreme lack of transparency into supply chains while exposing the dark underbelly of what were once considered innovative, costsaving business models. The dependence on limited inventory and just in time delivery enhances our vulnerability. And covid19 has served as a painful example of the longexisting problems. In the spring i was horrified to see medical facilities across the country, including hospitals and Nursing Homes in my community, struggle to secure personal protective equipment and livesaving medical devices like ventilators. We witnessed state governments forced to turn to unreliable suppliers to obtain needed medical products. While i hope this dark period was behind us, in the past few weeks, were seeing shortages again emerge as cases spike in various parts of the country. Despite the tool at its disposal, the administration has been unwilling to use the full power of the federal government to develop american productive capacity to meet the ballooning demand for these critical products. For the richest country in the world, this seems absurd and a sad reality. Covid19 underscores the decline in American Manufacturing which presents major economic, National Security, and Public Health challenges that can no longer be ignored. We must think strategically about our domestic manufacturing capacity both in the context of the covid19 crisis and what comes next. These considerations must be under in the ongoing and emerging Economic Security and technological competition with china. China has not been shy about its intent to use industrial policies that deploy the full light of the chinese economy in the furthering of its goals. The United States cannot sit by as china invest heavily in those ambitions. As members of congress, its incumbent upon us to seek out experts like our Witnesses Today to identify issues and learn from past mistakes. Policymakers must think about how the United States can mitigate the risk while cultivating manufacturing capacities and Economic Opportunity for our workers and for our families. As part of the effort to first understand and address the deficiency in our existing policy, im pleased that we were able to convene this panel of experts who can provide a diverse range of views and perspectives as we consider policies that ensure greater resilience in critical supply chains. We must keep an open mind about the policy levels that are appropriate moving forward. I encourage my colleagues on the subcommittee to use todays hearing as an opportunity to actively examine available policy tools for addressing one of the most consequential challenges of our time. In the conversations that have been developing around the topic of reexamining supply chains and the relationship between trade and manufacturing at home, theres been a lot of excitement regarding tax incentives or applying additional tariffs. Our examination, i would argue, should not fixate on one particular tool to the exclusion of others. Lets keep an open mind, keep our eyes focused on our objectives. Meaningful solutions will require us to Work Together to be thoughtful and creative. Theyll require our best tools and ideas to work in concert, likely across policy areas without prejudging what specific tools may be, im confident that trade policy is an important part of the answer. Todays hearing is to assist our committee in a robust and bipartisan effort to harness trade and manufacturing policies to create resilient and versatile supply chains. The future of the american economy, the health of our workforce and our leadership in innovation is at stake. With that, let me please turn to Ranking Member, mr. Buchanan, for his opening comments. Thank you, mr. Chairman. I also want to take a moment to offer my condolences to the family of congressman john lewis. John and i worked closely together on many issues as members of the ways and Means Committee including as chairman and Ranking Member of the oversight subcommittee. We worked on closely worked on taxpayers first act, the first reform to the irs in two decades. He was a remarkable man to dewh dedicated his life to making it better. This committee and this congress will never forget. Thank you, mr. Chairman, for holding this timely hearing. This important issue has been at the forefront of our minds as weve been fighting the covid19 pandemic. I hope we can Work Together to find Commonsense Solutions to make our medical independence, strengthen our supply chains. More manufacturing jobs here in america. I want to thank our witnesses for taking the time to testify and sharing your views with the subcommittee. This panel has shown us how important it is for us to be medically independent and to have a supply chain that are reliable and flexible, no matter how theyre structured. If we want stronger, more resilient supply chains here, we must be the best place in the world to do business. I enthusiastically support the tax cuts and jobs act because it will improve our tax incentives for manufacturers and conduct research and development in the United States, creating more jobs here at home. President trump has enacted many commonsense Regulatory Reforms over the last several years that have greatly improved our competitiveness around the world. As we Work Together through the health and economic effect of the pandemic, republicans understand that action is needed to make us more medically independent and prepare for the future crisis. The pandemic has showcased the urgency for having a vital medical products like ppe and pharmaceutical availability quickly and reliably. We cannot rely on our a adversaries like china. We seek to create and expand tax incentives to make the United States more medically independent. Im proud to have introduce the American Innovation act which allows startup businesses to expense more of their startup costs and preserve the important tax benefits like r d credits in the hands of american innovators to develop new cures and treatments. This package is just the beginning. Committee republicans continue to put forth winning progrowth proposals that will strengthen our Manufacturing Base and create more investment and production in jobs here at home. Its vital for america to maintain its status as the premier location of the world for any innovation and manufacturing. Thats the goal of the republican progrowth agenda. I also introduce the secure american medicine cabinet act to create a new office to stockpile Encouraging Companies to ramp up manufacturing and create the National Center for excellence for advanced pharmaceutical manufacturing to develop and manufacture more active pharmaceutical agreements within the United States. Another key consideration when assessing supply Chain Resilience is diversity of supply. Our allies play a vital role with us to make us medically independent like china poses serious threats. Working with trusted allies maximums our strength and safeguards our role as a Global Leader in manufacture and Health Care Innovation and it effectively discourages our partners from adopting localization measures that cut off our vital export markets. Mr. Chairman, this is a nonpartisan issue. Lets Work Together to address the challenges we face in a seamless, proactive, stable way that ensures our health, security and economic prosperity. Thank you, again, mr. Chairman, for calling this important hearing and i want to also thank all of your witnesses. I yield back. Thank you very much. We appreciate your comments and leadership and partner. We have a distinguished panel of witnesses to discuss the policies. I would first like to welcome professor of engineering in Public Policy. And then we will hear from senior fellow at the center for Global Development. Following him will be Roxanne Brown, International Vice president at large of the united Steel Workers and kim glass, president and ceo of the National Council of textile organizations and following ms. Glass is senior fellow at the hudson institute. Each of your statements will be made part of the record in its entirety. I would ask that you summarize your testimony in five minutes or less, if you could. Professor, you may begin. Thank you, chairman blumenauer and members of the subcommittee. During the pandemic i spoke with a mediumsized u. S. Medical supplier which has imported equipment from china capable of manufacturing 9 Million Masks per month. Surprisingly, their most challenging bottleneck was the ear loops for the masks. Work in their automated machines, the elastic needed to be no latex, a precise width and to come in a bag. They found a domestic supplier for a small fraction of the necessary elastic. But on a spool and for a while, a worker hand unspooled the elastic with the expected productivity slow down. When discussing Critical Technologies, we wouldnt think elastic. And yet, that lack of elastic cost our country millions of masks a week. The lesson from this story, however, is not that we need to produce elastic, per se. Whats missing is the capability to pivot. Diversity the suppliers internationally, adapt the equipment, change the elastic, change the regulations. That inability to pivot is the tip of the iceberg for how dilapidated the u. S. Manufacturing ecosystem is. First, for the u. S. To compete, we must make Innovative Products here that are demanded by the world. If we do it right, it can be a win win for National Security, the economy and jobs. Making advanced products domestically can create good jobs for hardworking High School Graduates. Im not talking about automating everything. While automation, i. T. And digitalization are clearly important, theyre just one set of a range of innovations. Our Research Shows that many of the advanced manufactured products on todays Critical Technology lists are likely to create more demand for skilled crafts people and empower those skilled High School Graduates to have more involvement in the innovation process itself. How do we get that technology manufactured in the United States . Unfortunately, my Research Shows that the globalization of production makes it harder for u. S. Innovators to bring their ideas to market. When firms move manufacturing to developing countries, it reduces the cost of old products, making Innovative New products have to be that much better to compete. We need to help u. S. Innovators leap over this valley of death through mechanisms such as increased and extended fbir funding. Second, the u. S. Needs to rebuild its manufacturing ecosystem through strategic investment in infrastructure. Infrastructure for transit, energy, communications and data address needs of society and manufacturing. Done right, it can also build National Capabilities in the companies and skilled workers who become the manufacturing workforce of the future. To lead in manufacturing the products of the future, we need to build the infrastructure of the future. The Computer Science skills relevant to transportation and Infrastructure Systems have corollaries in grid infrastructure, privacy and intelligent manufacturing. Our investments and training should be strategic to leverage these overlaps and the Career Transitions between them. Third, as youve heard, manufacturing the right advanced products domestically can increase National Security and demand for skilled High School Graduates. The right investments in infrastructure can serve triple duty in creating the groundwork for manufacturing success. But we must make the right investments which brings me to my final point. We cannot just produce for products we cannot just produce more reports with lists of Critical Technologies. The u. S. Needs a nimble entity that combines Program Managers and analysts to make Strategic Investments that ensure National Technology competitiveness. That entity needs enough money for its investments to be influential, but a sufficient lack of money such that it is required to engage and influence other agencies to have a larger effect. Getting these decisions right is going to require an organization with Technical Depth run by Interdisciplinary Teams of our best and brightest. Otherwise, as we are currently with covid19, we will be flying blind. Thank you, doctor. Members of the committee, im a senior fellow at the center for Global Development and affiliate professor and lecture at harvard medical school. Over the last two decades, my research has focused on Global Medical supply chains. Thank you for the opportunity to share my viewpoints to this committee and for convening this very important hearing. Ppe testing supplies and other products have highlighted the grave challenges we face in our medical supply chain. Much of the discussion has focused on ppe. The supply chain for different types of medical products varies a lot in its economic geography. The supply chain for test kit is less dependent on manufacturing in china than in europe. Ireland, germany, switzerland and mexico make up half of the u. S. Imports. The u. S. Is a significant exporter of medical products with a 12 global share of the market. A different picture emerges, china is the top exporter of face masks. India is a significant exporter of medicines. Its due to the clustering of technical know how, tax incentives offered by certain governments and proximity. For api, for example, environmental legislation was one of the