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U.S. Defense Industry Faces Soaring Demand and Supply Chain Crisis

The war in Ukraine and escalating tensions over Taiwan have led to a surge in demand for American-made high-tech weapons. And as the ongoing supply chain tightening and rising inflation continue, military industry watchers are wondering whether the U.S. defense sector can keep up.

Elbridge Colby, co-founder and principal of the Marathon Initiative, said: “You can’t rely on China for weapon parts. It is a matter of nature,” he said.

Even with the world’s largest defense budget, the US military is not vulnerable to supply chain challenges. But with an already huge budget and questions about Pentagon spending, some critics think more funding may not be the answer.

“Next year’s national security budget will likely be close to $1.5 trillion,” said Julia Gledhill, an analyst at the Defense Intelligence Center for Project On Government Oversight. “And Congress wants to add tens of billions of dollars to that number, despite the fact that the Pentagon has repeatedly shown that it does not manage its finances effectively.”

Identifying inefficiencies, advancing programs that work, and setting aside those that don’t, could be one way to address the problems that have plagued previous Pentagon big-budget initiatives. The Department of Defense did not respond to CNBC’s request for comment for this article.

Chris Dougherty, a senior fellow at the Center for a New America Security, said, “I don’t think this necessarily means running out of the defense budget.” It is about developing the ability to

Watch the video above to learn more about the challenges facing the U.S. defense industry and potential solutions to break through supply chain bottlenecks and budget constraints.

https://www.cnbc.com/2022/10/15/us-defense-industry-faces-surging-demand-and-a-supply-chain-crunch.html U.S. Defense Industry Faces Soaring Demand and Supply Chain Crisis

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