Editor’s Note: Asa Hutchinson is the governor of Arkansas and chair of the National Governors Association. Phil Murphy is the governor of New Jersey and vice chair of the National Governors Association. The opinions expressed in this commentary are their own.
As Americans strive to emerge from the darkest days of the Covid-19 pandemic, our reliance on products from outside the US has been on stark display. From a dearth of new cars to the increasing costs of construction materials to shortages of some household staples, supply chain constraints — due to Covid-related factory shutdowns and increased demand — have affected almost every American consumer. Our nation’s reliance on manufacturing key products and components in China and other foreign nations has hampered our ability to make up for the production gaps.
These supply chain issues are not just inconveniences, but threats to both our economic and national security. So, as we work our way into the “new normal,” it has become abundantly clear that we must create the infrastructure here at home that allows us to reduce our reliance on foreign goods, particularly those produced in China.
This is why we believe Congress needs to pass bipartisan legislation that addresses vulnerabilities in our domestic supply chain by supporting science and engineering research and incentivizing homegrown semiconductor production. Transforming the US manufacturing sector could increase our Gross Domestic Product by up to $460 billion and add as many as 1.5 million jobs to our economy, according to a McKinsey Global Institute analysis of IHS Markit data. That is real economic progress at a critical time in our recovery from the pandemic.
Semiconductors are the foundation of our 21st-century society. They power not just our smartphones, PCs and home electronics, but also our country’s transportation, navigation and medical equipment. Reliance on foreign-made products presents an unacceptable threat to our economic security. Take our auto industry, which has been hobbled by the extreme shortage of chips. Without an adequate supply of semiconductors, many automakers were forced to shut down production. And, as a result, working and middle-class Americans are finding it harder to afford both new and used vehicles that get them to work.
Our reliance on foreign-made semiconductors is not only an issue of rising inflation and scarcity, but also our national security. Chips are used in everything from military weapons systems that keep us safe to equipment power plants, internet service providers and other areas of critical infrastructure.
As governors, we are acutely aware of the struggles we face in recovering from this once-in-a-lifetime pandemic.
In Arkansas, we created the Council on Future Mobility to focus on innovation in moving goods and people. Some of the world’s most successful transportation companies call our state home, and their work makes Arkansas a leader in transportation and logistics. The council will drive development of autonomous vehicles, electric vehicles and drone delivery. And as these technologies progress, prescription medicine, groceries and even coffee will be quickly and affordably delivered. And chips will be a central component, as they will operate and navigate the complex structures and data needed to run this integrated global network.
In New Jersey, we have also implemented policies to spur development — not just in our research and development labs, but also in advanced manufacturing facilities here at home. Last year, we broke ground on the New Jersey Wind Port, an offshore wind manufacturing facility that will reduce our dependence on foreign energy. We also enacted the New Jersey Buy American Act, which ensures that large infrastructure products in our state are using American iron and steel.
New Jersey and Arkansas are very different states, and we represent different parties and different political ideologies. Yet despite those differences, we have come together in bipartisan fashion and we urge Congress to do the same.
Currently, Congress is considering various pieces of legislation, including the bipartisan United States Innovation and Competition Act in the Senate and the America COMPETES Act in the House, to boost US competitiveness and spur domestic semiconductor manufacturing. Although we may disagree on specific provisions of these bills, we believe that Congress can overcome these hurdles largely through good-faith compromises. Congress should reduce these bills to the core elements both parties can agree on and quickly pass this legislation for the good of our nation.
Focusing on domestic production is strong economic policy that will shore up our supply chains, bring down the cost of everyday products, decrease our reliance on China, and keep manufacturing facilities running. Our elected leaders in Washington must make American competitiveness — and its corresponding check on Chinese power — a priority. We urge them to unite on an agreement that spans both houses of Congress as well as ideologies across the spectrum — from the most conservative to the most progressive — and get a bill to President Biden’s desk.