Central Computer Processor digital concept (Getty images)
When Donald Trump takes office at noon on Jan. 20, 2025, he will face a very different threat environment from when he left office four years ago.
In particular, the People’s Republic of China (PRC) that he will confront will not only be the pacing threat that he identified during his first term, but will pose an even greater challenge than the Soviet Union did during the Cold War.
The PRC is wealthier, in both absolute terms and relative to the United States, than was the Soviet Union. While COVID damaged both the American and Chinese economies, Beijing has nonetheless seen its GDP grow from $14.8 trillion in 2020 to about $18 trillion today. And China has more levers of power than its Soviet predecessor, able to mobilize its academics, media, businesses, diplomats and military to compete with Washington.
Perhaps the greatest difference between China and the USSR: America is fully intertwined economically, including on supply chains with the PRC. And while that’s an issue lawmakers have been working to figure out, the focus all too often is only on what matters for cutting edge technologies, ignoring that China holds key positions in less noticed, less sexy supply chains that can nonetheless have devastating consequences.
In 2019, for example, “China accounted for 95 percent of U.S. imports of ibuprofen, 91 percent of U.S. imports of hydrocortisone, 70 percent of U.S. imports of acetaminophen, 40 to 45 percent of U.S. imports of penicillin and 40 percent of U.S. imports of heparin, according to Commerce Department data.” As Rosemary Gibson, author of China Rx, has noted, “Medicines can be used as a weapon of war against the United States.”
Similarly, although the PRC has not established a globally competitive position in terms of the most advanced logic chips, it holds a strong position in terms of “legacy chips.” As defined in the CHIPS Act, legacy chips are semiconductors built on process nodes that are 28nm or larger. A far cry from the logic chips that are currently at 7nm and pushing 2nm nodes, but legacy chips are essential parts of virtually every piece of equipment that uses electronics, from microwaves to automobiles to combine harvesters to fighter jets.
To address these threats, the Trump administration can leverage the bipartisan efforts of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (aka, the House China Committee). This committee has emerged as a vital platform for examining and recommending policies to counter China’s strategic maneuvers. By working alongside this body, the administration can engage in a truly broad-based, bipartisan effort to counter China’s supply chain position, and prioritize the development of strategies that directly target vulnerabilities.
A Multifaceted Approach To Resilience
To reduce reliance on China, the administration must adopt an innovative and multi-pronged strategy that incorporates both domestic reforms and international collaboration:
- Supply Chain Mapping and Innovation: Partnering with the House China Committee, the administration should commission a comprehensive supply chain map to identify critical dependencies. Enhanced use of advanced analytics and artificial intelligence can improve risk assessment and guide precise interventions. This effort, moreover, needs to target not only high technology items such as semiconductors, but strategically vital sectors such as pharmaceuticals and lower end microchips.
- Strategic Export Controls: A stricter set of export controls on emerging technologies, such as artificial intelligence and quantum computing, can protect US innovation and promote industrial independence. The ongoing efforts to monitor and control American direct investment in China also needs to be sustained and strengthened. It makes little sense to limit physical exports, yet fund Chinese efforts to circumvent those same exports or to establish indigenous industries.
- Collaborative Alliances: Deepening cooperation with allies like Japan, Australia and the European Union is critical. Joint ventures in rare earth mining, refining, and advanced manufacturing will diversify supply chains and reduce vulnerabilities. Facilitating transnational efforts to expand respective defense industrial bases, such as AUKUS, must also be encouraged. Additionally, free trade agreements emphasizing secure supply chains can strengthen partnerships.
- Public-Private Partnerships: Engaging US companies in a public-private initiative to build secure supply chains for critical technologies is essential. Collaboration with private industry could drive investments in domestic innovation hubs, especially in regions struggling economically, providing both security and economic revitalization.
These measures will inevitably have trade-offs, including higher consumer costs and potential retaliation from China. However, prioritizing national security while mitigating economic impact requires a clear, forward-looking strategy.
Just weeks after the US election, China banned exports of gallium, germanium and antimony. These minerals are critical for US defense manufacturers because they are essential in advanced technologies, including semiconductors, defense systems, and renewable energy. Gallium and germanium are key in producing high-performance chips used in radar, communication systems, and military electronics. The restriction highlights vulnerabilities in the global supply chain for strategic materials, underscoring the importance of securing alternative sources to sustain US defense capabilities and technological development.
Efforts to reduce dependency on China align with growing bipartisan consensus that economic resilience is inseparable from national security. A secure and resilient supply chain of both cutting edge technologies and the broader range of critical strategic resources not only underpins military readiness but also protects critical infrastructure and ensures America’s ability to maintain its global leadership. As the House China Committee underscores, confronting these challenges head-on is crucial to countering China’s ambitions and ensuring US sovereignty.
Long-term investments in infrastructure, innovation, and allied collaboration will strengthen the US supply chain against future disruptions. Programs that incentivize advanced manufacturing and encourage partnerships with allied nations will position the United States as a leader in critical sectors such as clean energy, semiconductors, and rare earth processing.
The Trump administration has an opportunity to act decisively, leveraging the House China Committee’s insights and bipartisan support for supply chain reforms. By addressing these vulnerabilities with urgency, foresight, and innovation, the United States can secure its economic future, protect its citizens, and counter China’s strategic threats in a complex global landscape.
The actions taken today will shape America’s ability to navigate the challenges of tomorrow and reaffirm its position as a global leader.
Dean Cheng is a non-resident fellow with the Potomac Institute for Policy Studies and with the George Washington University’s Space Policy Institute. When not translating Chinese articles, he can often be found feeding quarters into pinball machines.
Jo-Anne Sears is a Partner with Velocity Government Relations and a non-resident Senior Fellow with the Center for the Study of the Presidency and Congress. She and her husband are recent empty nesters and are on a quest to visit every whiskey producing region in Scotland.
