Congress is running out of time to reauthorize foreign and domestic instruments of statecraft critical to protecting American interests.
Congress has just adjourned for the summer. And yet, in less than 90 days, many of the critical tools that America relies on to outcompete one of its most formidable adversaries, China, could disappear. This would leave the U.S. government unable to rebuild the American industrial base, stop China from cornering strategic assets and markets abroad, or protect Americans from Chinese state-directed cyberattacks.
This imperative has received little attention due to the cacophony of policy noise generated by the current administration. But by October, congressional leaders will need to reauthorize essential foreign and domestic instruments of statecraft like the U.S. International Development Finance Corporation (DFC), the Defense Production Act (DPA), and other critical Department of Commerce national security authorities that rely on evolving emergency powers. Amid recent congressional focus on President Trump’s “big, beautiful bill”—and the early August recess—Congress simply may not have enough floor time to vote to save these powerful tools in September. A rescue effort will require carefully coordinated action by both congressional leadership and the White House to beat looming deadlines.
So far, cuts to foreign assistance and scientific research, as well as radical adjustments to student visa policies, have dominated headlines related to China competition. The rather mundane business of authorizing and reauthorizing key instruments of statecraft have meanwhile been ignored. But every year, Congress and the executive branch must work together to establish, modify, and define in law what various federal agencies can and cannot do—and sometimes whether these agencies or their authorities should exist at all. The best-known example is the annual National Defense Authorization Act (NDAA), which formally affirms and adjusts the legal authorities of the Department of Defense and other national security agencies. It is the only bill that has consistently passed Congress each year for sixty-four consecutive years.
Less well-known are the regular multiyear authorization cycles for the constellation of agencies and authorities that support the U.S. national security enterprise in fields like diplomacy, economics, intelligence, or technological innovation. For these core functions of government, this is a particularly important year. While last year’s docket included the reauthorization of the Foreign Intelligence Surveillance Act—which enables certain types of foreign intelligence collection and compelled assistance from U.S. telecommunications companies—this year Congress and the White House must again act to prevent the loss of key instruments needed to outcompete China in the domains of economics and technology.
America’s Affirmative Instruments of Economic Statecraft
Established under the Build Act of 2018, the DFC, for example, is America’s high-quality international alternative to China’s below-market, strings-attached financing options. The U.S. needs this institution to win over geopolitical swing states or smaller, strategically located countries in the Caribbean and the Pacific Islands, where China hopes to build military installations and intelligence facilities. In recent years, America has used the DFC to take a financial stake in shipyards, mines, telecom assets, and other strategic infrastructure around the world that would have otherwise fallen into the control of China’s state-linked companies.
However, the agency’s authority to function will end without the passage of a bill by Oct. 6. This loss of its operating authorities could also leave tens of billions of dollars in existing foreign investments stranded around the world.
The DPA, by contrast, is a critical instrument for reindustrializing America itself and expires about a week earlier than the DFC, on Sept. 30. This powerful tool allows the government to deploy capital within strategic manufacturing sectors to address supply chain bottlenecks, boost production, or mitigate cyberattacks or natural disasters. A descendent of the 1941 and 1942 War Powers Acts, the DPA remains the nation’s best hope to close the gap with China in the industries that China has specifically targeted with state subsidies to outcompete and ultimately shutter American production. Its authorities are vital for underwriting domestic investment in China-dominated industries that both American political parties care about for the United States’s economic and national security: from shipbuilding to missile production to rare earth magnets.
Recent DPA awards supported the domestic production of rare earth magnets and much needed ex-PRC sources of cobalt, graphite, and tungsten—all products that China has recently withheld from the United States to exert geopolitical pressure. President Trump even grounded his recent executive order on critical minerals in these very same DPA authorities. Moreover, the DPA further provides important authorities for the Department of Defense to audit sensitive supply chains and address cybersecurity risks. This power is more than a wartime national security tool: It enabled the accelerated production of COVID-19 vaccines during Operation Warp Speed and America’s global leadership during the response to the pandemic. Now it is at risk of disappearing.
Other Critical Authorities at Risk
While imperfect, the DFC and DPA are America’s best bet for deploying government capital in response to fast-moving strategic threats at home and abroad. Effective, thoughtful reauthorization processes could help fix bureaucratic and operational roadblocks that today hinder the potential uses of DPA and DFC financial instruments. But other critical authorities are also at stake as legislative activity grinds to a halt in Congress. Recent court decisions reveal the need for formal legislative authorization to enshrine existing tools like the Office of Information and Communications Technology and Services (ICTS) within the Department of Commerce. This small and often overlooked office, initially a product of Trump administration policy in 2019, is a powerhouse. It allows the government to stop the flow of Chinese goods and services into the United States that may enable foreign intelligence collection operations, facilitate cyberattacks on Americans, or otherwise endanger national security.
Finally, the Export-Import Bank’s authority to provide U.S. businesses with financing to bolster the competitiveness of American exports will also expire soon. While Congress has until next year, failure to reauthorize the bank’s authorities would end its ability and mandate to sell American alternatives to China’s goods and services in sectors like artificial intelligence (AI), biotech, semiconductor manufacturing, water treatment, and wireless communications around the world.
These capabilities and others like them all have strong bipartisan support—particularly in the context of an intense competition with America’s primary adversary. If they disappear due to a lack of legal authority, it will be the result of poor planning by a disorganized White House and Congress, not political opposition to a particular policy objective.
Capacity-Centric Statecraft at a Critical Moment
China can build its tools of strategic competition unencumbered by the rule of law or congressional consultation. Its speed can provide an advantage, but only if the U.S. allows it, instead of self-sabotaging existing capabilities or failing to invest in their evolution. State capacity—much like industrial capacity—requires material and temporal investment. And it can take years to rebuild once it is lost.
The determinative contest of the 21st century between the United States and China is already underway in the fields of economics and technology. To win this superpower marathon, the U.S. government must do more to compete at home and abroad, not less. Scale matters in this competition: The American government invested $76 billion compared to China’s $679 billion on global infrastructure projects between 2013 and 2022. Planning also matters—when China attained monopoly positions in strategic sectors from metals and minerals to ships and port equipment, America was relearning how to practice basic industrial policy and affirmative economic statecraft. We’ve made progress over the past five years, but it is fragile. Investments like the CHIPS Act and capabilities like the DFC, the Department of Defense’s Office of Strategic Capital, and the ICTS Office at Commerce need time to mature.
The danger of action-forcing moments in the American system of government is when gridlock or veto players prevent basic consensus-based decision-making. Partisanship in Congress, the recent hollowing out of the National Security Council, and a fundamental lack of knowledge in the White House about the regular business of government all risk causing a massive decline in state capacity at the time when we most need it. Absent a surge in congressional attention on reauthorization legislation, we might lose the DFC or the Export-Import Bank, the Defense Production Act and OICTS rulemaking authorities, or even fail to fully utilize the power of the NDAA to drive the necessary annual course corrections into the Department of Defense.
Effective authorization processes are not easy. They take focused attention from a capable executive branch, led by the White House and the Office of Management and Budget, working in concert with their legislative counterparts. There are no AI-driven shortcuts. All of this is more critical than ever, given the Supreme Court’s reversal of the Chevron doctrine. The loss of Chevron reduces the scope federal agencies have to interpret ambiguous or unclear law on their own. The Court effectively gave Congress greater responsibility and authority, and legislators must now meet the moment.
While occasionally cumbersome, the process of seeking congressional authorization and reauthorization every few years is an action-forcing exercise in accountability. It pushes elected officials to think through priorities and trade-offs, weigh input from voters and stakeholders, and prevent the concentration of powers in otherwise unaccountable agencies and offices. At its best, it can even help pull the instruments of statecraft into something resembling a coordinated grand strategy.
Securing America and outcompeting China requires considering both the means and the ends of American statecraft. It also means recommitting to the slow and steady work of proving a democracy can run a more accountable and efficient bureaucracy than autocracies can. That, as much as anything else, is the responsibility of policymakers in a democratic system.
– Rush Doshi, William Henagan. Published courtesy of Lawfare.
