American brands are facing unparalleled supply chain challenges in the wake of the COVID-19 outbreak, and Senator Cory Booker has reintroduced legislation that he hopes will help bolster small businesses amid the chaos.
At a Senate Small Business and Entrepreneurship Committee hearing about the coronavirus that took place on Thursday, the Democratic senator from New Jersey asserted that the country’s overreliance on foreign manufacturing—especially from China—has endangered global supply chains.
“These vulnerabilities we’re seeing in our supply chain speak to our failure as a country to invest in our own competitiveness,” Booker said in the hearing.
“This is a national security crisis,” he added. “One of our serious adversaries is doing things strategically to undermine our health and economic well-being. At any point, they could cripple our economy.”
Booker announced that he would be reintroducing the Scale-Up Manufacturing Investment Company (SUMIC) Act in order to give U.S. entrepreneurs access to capital that would help them grow their businesses and commercialize their advanced manufacturing operations.
Administered by the Small Business Administration, the SUMIC Act would establish a fund that would offer federal loan guarantees to investors in advanced manufacturing startups that build their products stateside.
According to Booker, a lack of access to funding has pushed innovative manufacturing startups to other countries that offer attractive financing opportunities that make scaling more feasible. That migration has led to a dearth of well-paid, high-skilled manufacturing jobs in the U.S., he said.
“To remain competitive and keep innovative technologies and capabilities in the U.S., the federal government must partner with the private sector to increase access to capital,” he said, urging officials to reach across the aisle to ensure the bill’s passage.
“This bill invests in the potential of entrepreneurs in the advanced manufacturing sector by providing them with the funding they need to scale-up and commercialize new technologies.”
“This is an obvious area where we should have bipartisan commitment to fill these vulnerabilities and actually build more American manufacturing,” Booker said. “You cannot just flip a switch and have the manufacturing capacity here.”
Earlier on Thursday, Booker, along with Senators Kristin Gillibrand (D-NY) and Kamala Harris (D-CA) urged the Senate to include paid family leave and paid sick days in any economic package it passes.
The senators’ moves come amid growing outcry from trade groups representing American businesses, which are pushing for aid as the global coronavirus pandemic cripples supply chains.
On Tuesday, the Footwear Distributors and Retailers of America (FDRA) sent an open letter to director of the U.S. Economic Council Larry Kudlow, urging the administration to freeze duties across the board.
Such an action could help mitigate COVID-19’s impact on shoe companies and their workers, which have already taken hits due to the ongoing trade war with China.
The FDRA also voiced its support for the Trump administration’s proposed payroll tax cut, which would provide a slight cushion for shoe industry workers whose jobs will undoubtedly be impacted by the viral outbreak and its effects on consumer confidence at retail.