Another incident has to come to light that proves that if America doesn't get tough with China on matters of trade and counterfeiting, the very security of the United States could be placed at risk. Counterfeit electronic components being sold to the U.S. military from overseas must be stopped, or the effectiveness and readiness of the world's proudest and ablest fighting force may be jeopardized.
The Reuters news agency reported last week that fake electronic parts, more than 70 percent of which are of Chinese origin, are widespread in key U.S. military systems and threaten our national security. A year-long investigation by the Senate Armed Services Committee found counterfeit parts from China in the Air Force's C-130J cargo plane, in assemblies for Special Operations helicopters and in the Navy's Poseidon surveillance plane. The investigation found 1,800 incidents of counterfeit parts in the Department of Defense supply chain in 2009 and 2010. The total number of suspected fake parts in those cases topped 1 million.
It is bad enough that it is illegal to use counterfeit, foreign parts for such purposes and that those one million parts could have been built by American workers to the profit of American businesses. But it is a true outrage that many of the key weapons systems used by our men and women in uniform are now dependent upon these Chinese-made, counterfeit parts. During a time of war, China need not attack America or sign an alliance with our enemy, they need only stop shipping the key components for these weapons systems to leave our forces without the reliable equipment necessary to maintain preparedness and superiority.
This situation not only impacts safety and security, it costs tax dollars as well. It will cost an estimated $2.7 million to replace a memory device in a Missile Defense Agency missile that was found to be counterfeit. China has failed to take steps to halt this counterfeiting. One Chinese company, alone, has been found to have provided 84,000 counterfeit parts directly into the Department of Defense supply chain. When U.S. Senate staff wanted to travel to China to further the investigation into this crucial matter, the Chinese government denied their travel visas. This systematic breaking of rules, allowed by what can only be characterized as flawed enforcement at the Department of Defense, hurts our nation by denying American workers jobs, denying profit and fair market competition to American businesses and places at risk the safety, security and readiness of our fighting men and women.
According to the Semiconductor Industry Association, counterfeits cost U.S. semiconductor companies more than $7.5 billion annually in lost revenue, including nearly 11,000 American jobs. Counterfeit goods were found in military missiles, which the Missile Defense Agency says would have surely caused the missile to fail. Other faulty parts found in use by the Navy have caused errors on SH-60B helicopters, which would greatly hinder a pilots' ability to conduct night missions or accurately fire their missiles.
At its heart, this is another case of government not doing its job--to the harm of America's workers, businesses and global interests. Many of the counterfeit goods found went unreported to DOD or any government officials or criminal investigators. For certain, government is too big and too expensive, but worse yet, in instances such as this, it is ineffective and largely indifferent to its purpose: to serve the citizens of this nation and to protect our interests around the world.
The Chinese government has a practice in place to skirt international law, disregard trade agreements and take every possible step to strengthen its position in the world relative to the United States. At the same time China is selling sub-quality, counterfeit parts to our military, American officials are negotiating the Trans-Pacific Partnership, which will increase trade with nations in the Pacific. China's response to these good faith negotiations has been to continue its practice of currency manipulation in a way designed to offset any gains made on behalf of American companies in the trade agreement. I support an effort being made by a coalition of manufacturers who are pressing U.S. trade officials to include rules in trade agreements preventing deliberate currency manipulation. We must insist that nations with which we trade must adhere to the rules and allow American goods into their markets.
As complex and serious as these problems are, I believe the solutions are relatively simple. Taxpayer dollars should be used to buy American made products whenever possible. This is especially true with regard to military hardware. Vendors, government procurement agents and those charged with enforcement who do not play by the rules should be punished. Foreign nations who do not honor the laws and agreements of our government and international trade regulations should be denied access to our markets until they are willing to do so.
I have demanded that the Department of Defense investigate the counterfeiting of parts for military hardware and I voted for the 2012 National Defense Authorization Act, which includes a plan to address weaknesses in the military supply chain which have allowed these things to happen. I will continue to insist that these efforts are put in place and that the investigation into the counterfeit parts outrage is stepped up. Those responsible, either by action or inaction, must be held accountable. We must get this right. There is too much at stake, both on the battlefield and on the plant floor, to allow this sort of activity to continue any longer.