Reliance on imports leaves U.S. vulnerable to disasters, report says

An increasing reliance on imports, combined with the fraying of the nation’s power grid, highways and rail lines, leaves the United States more vulnerable to the damage of natural disasters and terrorist attacks, according to a report to be released Wednesday by former homeland security secretary Tom Ridge.

The report, which Ridge shared with homeland security officials Tuesday morning, warns that the offshoring of U.S. factories means that rebounding from a catastrophe will be more difficult because so many critical supplies would have to come from overseas.

“We are a country at risk because we’ve ignored the gradual erosion of our manufacturing basis,” he said in an interview. “We’ve ignored the need to rebuild the nation’s infrastructure.”

Citing the aftermath of disasters such at Hurricane Katrina and the Sept. 11, 2001, attacks, the report adds to the long-running debate over whether the offshoring of U.S. manufacturing has harmed the nation.

“At a time when the frequency of large-scale disasters seems to be increasing, the U.S. seems to be at an all-time low in terms of being able to supply our own critical needs,” said Scott Paul, director of the Alliance for American Manufacturing, which sponsored the report by Ridge and Robert B. Stephan, who was an assistant secretary of homeland security from 2005 to 2008.

Paul said, for example, that half of the world’s steel comes from China.

Among other things, Ridge and Stephan call for using “buy America” provisions for federal spending and for the greater enforcement of trade laws to support U.S. manufacturers.

The United States already applies “Buy America” provisions to some federal spending, particularly in defense and highways and trains. In addition, the Buy America act requires federal agencies to report the amount of acquisitions from businesses that manufacture outside the United States.

Last year, of $374 billion in defense spending, $24 billion, or 6.4 percent, went to foreign entities, according to the department’s report to Congress in May. More than half of the $24 billion, however, was spent on fuel, construction and subsistence — not manufactured goods.

“The future vitality of our national and economic security goes hand-in-hand with that of our ­domestic manufacturing base,” Ridge and Stephan wrote.

Free-trade advocates question the idea of limiting foreign goods as a means of bolstering U.S. security, however, in part because it is difficult to anticipate what catastrophes might be forthcoming, and, therefore, what kinds of manufacturing to protect.

“These discussions play out in an amorphous sense of danger as opposed to specific attacks — that is the problem,” said University of Virginia professor Philip Levy, who was a senior trade economist at the Council of Economic Advisers during the George W. Bush admnistration.

Levy said that although it might seem logical to protect “important” industries, it is difficult to select just what sectors are most important. Should agriculture be protected for food? What about the textile industry, to make sure there are enough clothes?

“It’s quite tricky to figure out what is unimportant,” Levy said.

Peter Whoriskey is a staff writer for The Washington Post handling investigations of financial and economic topics. You can email him at peter.whoriskey@washpost.com.
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