defence industrydisruptions of supply chaincompetition
CFR Report Takeaways: How to Reshape U.S. Defense Production to Counter China
A new Council on Foreign Relations report, "Out of Ammo: A Two-Year Sprint to Rebuild the American Arsenal and Deter China," highlights critical vulnerabilities in the U.S. defense industrial base. Long production timelines and supply chain bottlenecks, worsened by munitions depletion in the Iran conflict, have left the U.S. ill-equipped to deter Chinese aggression in the Western Pacific. Author Michael C. Horowitz argues that the U.S. must pivot from an exclusive reliance on expensive, hard-to-produce weapons toward "precise mass" systems. These lower-cost, autonomous, and attritable capabilities, such as drones and sensors, can be rapidly scaled using commercial manufacturing processes within a two-year window.
To achieve this, the report recommends four urgent reforms: unlocking industrial speed by giving Pentagon program offices more authority, accepting higher risk in procurement for low-cost systems, moving toward multiyear budgeting to provide industry predictability, and resolving supply chain bottlenecks by investing in second-source suppliers. Horowitz emphasizes that waiting for a conflict to begin before putting production on a wartime footing will be too late. The next two years are critical for implementing these changes to ensure the U.S. can effectively counter or deny Chinese military coercion.
CFR: Council on Foreign Relations
Michael C. Horowitz
24.08.2026
