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Experts told the Daily Caller News Foundation that American defense startups increasingly depend on Chinese parts, creating a significant risk of Beijing exploitation.
Since 2021, hundreds of startups have joined the U.S. military-industrial complex, boosting business, according to The Wall Street Journal. However, experts warned that these contractors rely on China for crucial components like motors, chips, and rare earth minerals, which could allow Beijing to exploit or disrupt critical U.S. defense technologies.
“This is a serious problem for two reasons,” John Lee, senior defense expert at the Hudson Institute, told the DCNF. “First, as we saw during the pandemic, over-reliance on Chinese supply chains for components and inputs leaves countries and economies vulnerable to politically or policy-motivated restrictions being imposed by Beijing. Second, components can have elements inserted into them without the knowledge of the end user. This could be spying equipment, channels for China to disable or damage the component from a distance, or even materials that can weaponize the component.”
New defense contractors rely heavily on Chinese-made parts because they lack the financial resources of more prominent industry players, and China’s components are cheaper. However, industry executives told The Wall Street Journal that these startups are wary of this dependence, given China’s active efforts to undermine the U.S. and its potential to be an adversary in a global conflict. Although decoupling from China-based suppliers is challenging and costly, defense startups acknowledge it is necessary for long-term security.
“There’s a lot of lip-flapping about national security resilience manufacturing. But there’s no money for us to do this,” Scott Cololismo, CEO of defense startup LAND Energy, told the WSJ. Colosimo also explained LAND has some funding grants from the Pentagon, but needs more support to thrive.
The rare-earth minerals China supplies to U.S. defense contractors, such as neodymium, yttrium, and samarium, are crucial for advanced military technologies. These minerals are essential in high-tech equipment like laser and missile systems, jet engines, communications devices, and nuclear propulsion systems, making them invaluable to modern defense capabilities.
“Critical minerals are the building blocks for many of the most sensitive products in our defense industry,” Adam Savit, director of the China Policy Initiative at the America First Policy Initiative, told the DCNF. “China can abuse its dominant position in other critical mineral supply chains at any time. The only long-term solution to this is to enact comprehensive permitting reform to approve domestic mining projects, and work with allied nations to develop new production when the U.S. lacks the relevant natural resources.”
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