strengthen the manufacturing and defense industrial base,” Mr. Navarro said. “Trade policy is just one of many tools to do that… You’ve got to attack these vulnerabilities” in multiple ways.
Some experts question the decision to invoke national security concerns for trade issues, such as the tariffs imposed last year on steel and aluminum exports. “There remains room for mischief in any governmental review of national security and international trade,” said Jim Hasik, a senior fellow at the Atlantic Council, a think tank.
Mr. Hasik said the arguments for invoking such concerns over imports of steel and aluminum are weak, given the small relative consumption of both for military use. A push into other areas could lead to “mission creep” rather than to direct benefits to the military supply chain.
The report cites the absence of U.S. plants producing a fiber used to make military tents. That in turn could require “decisive efforts to modernize and revitalize the domestic fiber and textile industry,” said the report.
Pentagon and industry officials have recognized choke points and potential problems for a number of years, ranging from issues securing specialized ball bearings to a single U.S. plant making propellers for the Navy.
“We are aware of the critical issues,” said one senior executive who has worked at both the Pentagon and in industry. “You can fix those relatively quickly.” The Pentagon already makes targeted contract awards
to support struggling firms, for example accelerating payments or increasing the order size.
Ellen Lord, the Pentagon’s acquisition chief, has said that the department had burrowed four or five levels down into the supply chain to uncover weaknesses.
“There is a large focus on dependency on foreign countries for supply, and China figures very prominently there,” she told reporters in July. “I am very concerned that we have secondary sourcing in all of our critical components.”
The sharp drop in military spending between 2013 and 2015 also hit industry hard, though the trend has reversed. The last two defense budgets added $75 billion for procurement and research, a 15 % bump over fiscal 2017. The 2019 budget also is the first in a decade that Congress has passed on time, providing companies with more certainty for investment and hiring decisions.
Nearly 17,000 U.S. firms stopped serving the defense department as prime contractors between 2001 and 2015, according to a study by the Center for Strategic and International Studies, a think tank.
That, in turn, led thousands of workers to leave the defense industry, while big contractors such as Boeing Co. and Northrop Grumman Corp. shed thousands more as part of cost-cutting efforts. The result has been worker shortages, exacerbated by delays in approving security clearances and competition for staff from the tech industry, as the biggest challenge, say industry executives.
Jacob M. Schlesinger contributed to this article