The annual "must-pass" defense authorization legislation contains provisions to address supply chain domestication in light of the COVID-19 pandemic, which could have far reaching implications on the American economy and global trade agenda. While members of Congress and the administration have expressed concerns regarding supply chain vulnerabilities in the last several years, the recent shortages of medical equipment to combat the COVID-19 pandemic has refocused policy-makers' attention on the issue. These recent shortages, along with growing economic competition with China and other foreign actors across a wider range of sectors, including technology, energy, aviation, minerals, financial services and agriculture, have made taking action on supply chain domestication a matter of national security.
After returning from a multiweek recess, the U.S. House of Representatives and Senate considered their versions of the National Defense Authorization Act (NDAA) (S. 4049 and H.R. 6395), both of which contain numerous provisions that expand domestic defense manufacturing and address supply chain vulnerabilities. The House passed their version of the legislation by a vote of 295-125, while also accepting several amendments relating to supply chain domestication on July 21. The Senate passed their version by a vote of 86-14 on July 23. During the amendment process on the Senate floor, Sen. John Cornyn's (R-TX) amendment to authorize a federal grant program for states to build or modernize domestic semiconductor manufacturing facilities was approved by a vote of 96-4, showing a bipartisan effort to further secure America's supply chain.
While the differences in the legislation must be reconciled during conference before being signed into law by President Trump, it is most likely that the supply chain provisions will find bicameral support and remain a critical component of the final bill. A summary and comparison chart of the supply chain provisions included in both chambers' legislation is provided below.
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