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Top takeaways from POLITICO’s supply chain event

Emerging technologies and new threats have forced lawmakers to rethink supply chain resilience.

New technologies, evolving threats and the wars in Ukraine and Gaza have strained global supply chains and forced the U.S. to rethink how it will meet its own needs, and those of its allies, at a moment of intense global tension. Experts and leaders convened Wednesday by POLITICO laid out the challenges — and some of the solutions.

In a standing room-only crowd, senior Pentagon officials, members of Congress and private-sector leaders gathered for “On the Watch: Securing America’s Supply Chain for Critical Infrastructure” and discussed how emerging technologies and new threats have forced lawmakers to rethink the country’s supply chain resilience.

Here are four major takeaways:

1. Hackers remain a serious threat to U.S. critical networks

The event made clear that hackers, particularly those linked to the Chinese government, are an acute threat to U.S. critical networks.

In the past year, top Biden administration officials have repeatedly sounded the alarm on threats to U.S. networks from the Chinese government hacking group Volt Typhoon, and warned that the country’s hackers are prepared to launch cyberattacks to hinder efforts to defend Taiwan.

Brandon Wales, executive director of the Cybersecurity and Infrastructure Security Agency, warned that the threat has not diminished. “China’s targeting of our critical infrastructure continues unabated,” he said.

The extent of this targeting may be far wider than the administration has made clear. Wales, when pressed on which companies were being targeted by Volt Typhoon, said that while China is going after larger groups, in many cases the targets are smaller and less obvious.

“If I was to show everyone the list of places where we have gone on site and found Chinese pre-positioning on our critical infrastructure, a portion of that list no one here would recognize the names of those assets,” Wales said. “They’re not big, huge, important pieces of critical infrastructure, but they are geographically dispersed across the country. They target various sectors that the Chinese believe will help induce the societal panic they want to accomplish.”

2. U.S. ‘on path’ to hit target for 155mm shell production goals

Douglas Bush, assistant secretary of the Army, said production of 155 mm artillery shells is expected to reach more than 55,000 per month by the end of the summer.

That level of production puts the U.S. on track to reach its goal of 100,000 shells per month by the end 2025, Bush said. Efforts to sharply increase production have taken on new urgency as Ukraine struggles to defend itself from Russian forces.

“The ultimate target remains 100,000 a month by the end of next year,” Bush said. “We’re on path to that.”

3. The workforce remains a limiting factor

The American workforce is still a major limiting factor that hinders efforts to ramp up manufacturing inside the U.S.

Eric Fanning, the president of Aerospace Industries Association, said that “‘Buy American’ can make it harder to sell American” because of limited capacity.

“Where do we get the workers to do this? How do we train them? How do we entice them in very early ages to get interested in the different types of skills — everything from well trained, highly educated engineers to people who have to work very sophisticated machinery on the factory floor.”

As the U.S. is still unable to entirety return manufacturing to within its own borders, Manning said Washington will be forced to rely on its allies in Europe and the Indo-Pacific.

“We’ve seen in Ukraine, we don’t have the capacity, and can’t grow to the capacity to do everything we want in the United States,” Fanning said. “We need to do it collectively.”

4. Ellzey: Federal agencies limit the ability to source raw materials at home

Rep. Jake Ellzey (R-Texas) said that federal agencies that limit American abilities to produce rare earth minerals place the U.S. at a disadvantage to countries like China, Russia and Iran.

Ellzey said that those limits don’t exist from Moscow and Beijing, which are “all the way up into Central America.”

“What happened to the Monroe Doctrine? Apparently, it went away — not for me, but it’s no longer existent,” Ellzey said.

In particular, Ellzey singled out the EPA as an agency limiting efforts to source materials at home.

“We can mine cobalt in the United States and process it, but we won’t because of the EPA,” he said. “The Chinese have no rules like that.”

Lee Hudson and Connor O’Brien contributed to this report.