US Navy Secretary Warns Of “Fragile” Supply Chain And “Great Power Competition”

The U.S. is attempting to not just decouple its economy from the rest of the world, which won’t happen until wartime, but now there’s new evidence that supply chains for military warships could soon be recognized after it was found Russia and China supply critical components.

U.S. Secretary of the Navy Richard Spencer told the Financial Times (FT) in an exclusive interview that a top-level report found many contractors building warships used “high-tech and high-precision parts” from foreign countries, some of those countries were Russia and China.

Spencer said the U.S. is in a “great power competition” with both countries, and it’s vital that critical components made in those countries aren’t used in U.S. warships. This means some of those supply chains of how contractors procure crucial components need to be reworked into allied countries and or produced domestically.

Spencer then warned about how Beijing is “weaponizing capital” across 152 countries in Asia, Europe, Africa, the Middle East, and the Americas, through its Belt and Road Initiative (BRI). He accused China of forcing countries into a ‘debt trap’ to gain access and control over natural resources.

“You go to a country in need, you fill that need which they are grateful for, but at some point do they turn around and go: ‘You know what, everybody out, we’re going to use this now . . . the keys are mine’?” Spencer said. “There’s nothing that prevents that.”

China recently began BRI projects in Italy, near the site of Italian shipbuilder Fincantieri, a top finalist to develop the Navy’s new frigate. Spencer said he had a long talk with Fincantieri management about the need to protect internal networks from Chinese hackers.

Spencer said there has been a tremendous effort to restore domestic supply chains and invest in factories to build out manufacturing capabilities.

But he added one of the most challenging parts of restoring the U.S. industrial base is convincing investment banks to fund weapon manufacturing facilities.

Spencer launched a “trusted capital” program where private equity funds can obtain more access to funding military projects.

As we heard on Monday, the U.S. and its Asian allies have launched a global infrastructure program, called the Blue Dot Network, that will directly compete with BRI.

The U.S.’ attempt to decouple its economy from the world, reorganize military supply chains away from Russia and China, and launch an alternative BRI program is a clear indication that the “great power competition” is only in the beginning innings.