Axios Event: Defense supply chain vulnerability is the "new battlefield"

WASHINGTON – Addressing vulnerabilities in manufacturing, sourcing and materials in the U.S. defense supply chain are top government priorities, leaders said at an Axios roundtable discussion event.

Why it matters: Supply chain security has become an increasingly important asset in warfare as dominance over rare and critical earth minerals gives countries a strategic leg up — but the U.S. is lagging behind in procurement and production, experts said.

• Axios' Colin Demarest and Erica Pandey moderated the May 21 discussion, sponsored by Exiger.

What they're saying: "It's an issue whose day has come," said Council on Foreign Relations senior fellow for technology and innovation Mike Horowitz.

• Experts have warned about supply chain vulnerability "going back several administrations," Horowitz said.
• "But in the context of the broader move toward tariffs, and the continuing recognition of the enormity of the threat China poses, then supply chain security has just moved way up the priority list. … It was always very important. It now also seems urgent."

The big picture: "We are really entering a new era of non-kinetic warfare," said Exiger president Carrie Wibben Kaupp. U.S. adversaries "really treat supply chains as the new battlefield," she said.

Zoom in: Having better insight and visibility into hidden supply chain vulnerabilities down to raw materials is critical to understand risk, said Patrick Kelleher, deputy assistant secretary of defense for materiel readiness.

• "When you can track everything back to the raw material … and then understand the providence of the resources, the materials, the ownership of the companies, who sits on the board, who's investing in the company, I think that can give a you much better insight into the risks associated with those particular suppliers," Kelleher said.
• There is an "imperative" to do more, he added.

What's next: "For any future replicator purchase, we should be doing an AI-based supply chain analysis," Building Cyber Security CEO Lucian Niemeyer said.