Reshoring PPE: A National Priority

Aug 24, 2020

Commentary: Senator Lindsey Graham of South Carolina, along with Senators Mike Rounds (South Carolina) and Shelley Moor Capito (West Virginia), has introduced a bill called the U.S. Made Act of 2020, which has the objective of reshoring Personal Protection Equipment (PPE) from China to the U.S. PPE equipment that is deemed to be a national priority under Graham’s bill includes sanitizing/disinfecting wipes, surgical/respirator masks, face shields, surgical gowns, and items used in hospitals such as bandages and bedding. The bill would mandate that all PPE be American-made within five years. Graham is pushing to have the bill incorporated into the Phase IV coronavirus relief package, if the White House and Congress, and Republicans and Democrats, can come to an agreement.

   Not surprisingly, the bill is endorsed by large associations such as the National Council of Textile Organizations, the Alliance for American Manufacturing, and the AFL-CIO. During the announcement for the bill, Graham stated, "Ninety percent of our personal protective equipment that our doctors and nurses and healthcare workers use to keep us safe is made in China." At the heart of the bill, the main hook, if you will, to reshore PPE manufacturers are tax credits for equipment used to make PPE.

   Being beholden to other countries for supplies that are deemed a national priority is a position the U.S. should never have put itself in. Ensuring that plenty of PPE supplies are available is a government responsibility to its citizens. It’s surprising that it was not a war, but a global pandemic that is making this crystal clear. There is a precedent for the federal government to mandate that certain products be American-made. The Berry Amendment, which was originally passed in 1941 and made a permanent part of subsequent apprpriations in 1994, restricts the Department of Defense from using any funding for procurement of clothing, food, textiles, hand tools, and measuring tools that are not American-made. This ensures that in times of crisis, the U.S. military will have critical supplies such as uniforms being made at home.

   It is unclear if all PPE can be American-made within five years. This would require a quantum leap compared to where the PPE situation currently stands. However, with a mandate and good leadership, the U.S. can move mountains if it needs to. We also might consider negotiating PPE import targets with trusted trading partners such as Canada and Mexico. This could help us with the shift from China to North America within five years. After the implementation of the United States-Mexico-Canada Agreement on July 1, trade friction between the three neighbors seems to be settling down. We do not want to stoke these frictions, especially with these two valued allies that have worked with us during the pandemic. Inputs/components from Mexico and Canada can help with the production of U.S.-made products.           

Incentives are a good start in terms of luring PPE companies to the U.S. Another would be for other federal agencies, states, counties, municipalities, and public agencies to commit to purchasing American-made PPE. This will ensure PPE companies a local market by which they can succeed and grow.

   And why not use the local supplier base or develop one that can supply this movement of PPE back to the U.S.? A preferential program also can be developed for these companies to use U.S. suppliers of cloth, paper, metals, plastics and other materials in order to make their products. Perhaps, incentives could be offered to tier one, tier two, and tier three supplies that would ramp up their production to allow PPE to quickly come to the U.S. Incentives could take the form of federal tax credits, job training grants, and expansion incentives for U.S. suppliers of PPE production inputs that expand their workforce in a national program of reshoring PPE.

   Amid the partisan squabbling in Washington, D.C., the Graham bill will need to have buy-in from both parties. Parts of it will probably change, as provisions are added and eliminated. Incentives may have to be strengthened or a combination of incentives may need to be developed. Regardless, now is the time to stop talking about putting a plan together to ensure that the U.S. doesn’t get caught flat-footed during the next pandemic, and actually put a viable plan together. This is not a Republican or Democrat issue, it is an American issue for the health (literally) of our country.