China’s control over critical supply chains poses a significant threat to U.S. national security in key technological sectors such as artificial intelligence, quantum computing, and biotechnology. This growing concern has prompted calls for immediate action to reduce dependence on Chinese supply chains and secure the United States’ economic and technological resilience.
Beijing has demonstrated its ability to weaponize supply chains by leveraging its dominance in rare earths, a critical component in many advanced technologies. During President Donald Trump’s recent trip to Asia, he had to de-escalate a rare-earth dispute, highlighting the potential for China to exert leverage over the U.S. economy. However, rare earths are just the beginning of the challenge, as China’s influence extends to more advanced technologies that are critical for national security.
The U.S. is at risk of significant and growing Chinese leverage in three key technologies: artificial intelligence, quantum computing, and biotechnology. American leadership in AI, for instance, depends on access to specialized chemicals, printed circuit boards, and networking equipment from China. Similarly, China controls critical inputs for quantum computing, including precision lasers and essential minerals. In the field of biotechnology, China is the sole supplier of at least one critical ingredient for more than a third of nearly 2,000 U.S.-approved medicines, including amoxicillin, one of the most widely prescribed antibiotics.
Despite these challenges, the United States still holds powerful cards to play. The U.S. private sector leads the world in research and development spending, and U.S. capital markets are the deepest and most liquid in the world, capable of financing ambitious projects. The talent pool of American workers, from machinists to STEM researchers, is well-positioned to build and benefit from the return of critical supply chains.
However, creative incentives are needed to unlock these advantages. The U.S. government must act now to de-risk critical supply chains by incentivizing domestic production of essential inputs for semiconductors and data centers, as well as materials for quantum computing and biotechnology. This includes various chemicals, hardware components, and essential drug ingredients. Government action is also crucial to mobilize private investment toward quantum computing and biotechnology, using the Department of Defense’s procurement power to create demand for viable quantum computers and supporting biomanufacturing hubs nationwide.
While economic security begins at home, America is not alone in this race. The European Union, Japan, and South Korea have also pledged investments that could help strengthen U.S. manufacturing and critical supply chains. When the U.S. government stockpiles essential drug ingredients or critical minerals, it should consider trusted markets, as illustrated by the recent framework struck with Australia.
James D. Taiclet, chairman, president, and CEO of Lockheed Martin, and Justin Muzinich, CEO of Muzinich & Co., both co-chair of the Council on Foreign Relations Task Force on Economic Security, emphasize the need for a coordinated approach. They advocate for establishing an Economic Security Center to enhance government coordination, upgrade technical expertise, and deepen partnerships with the private sector. With strong bipartisan support for strengthening critical supply chains, the authors stress the importance of maintaining momentum to ensure the American economy can compete and win in the new era of technology.