June 10, 2025 , 2:17 pm .

Trump's tariff war puts the U.S. military industry's supply chain at risk (Photo: U.S. Air Force)
In a hyperconnected world, where value chains are intertwined on a global scale , a trade truce between China and the United States came into effect on May 14, 2025 , after months of tariff escalation.
Washington reduced its tariffs on Chinese products from 145% to 30% for 90 days, while China lowered its tariffs from 120-125% to 10%. The measure was driven by pressure from US industrial sectors affected by their dependence on Chinese inputs.
Although the agreement does not completely resolve the conflict, it represents a significant concession by the United States in the face of the rising costs of its strategy —a move that seeks to contain rather than resolve the damage. China, for its part, maintains its room for maneuver, strengthening its control over key exports such as rare earth minerals.
The trade war remains open, but the balance is tipped toward China, which has demonstrated greater capacity for structural pressure.
In fact, on June 5, President Xi Jinping and Donald Trump held a call in which they agreed to resume trade negotiations. Although both described the exchange as positive, tensions persist.
The United States doubled tariffs on steel and aluminum a day earlier , from 25% to 50% , even though their legality remains under judicial question.
Washington persists with a punitive strategy that has proven costly for its own industry, while Beijing maintains a firm position, reinforced by its control over strategic sectors such as rare minerals.
The reality is clear: the United States cannot sustain a prolonged trade war against the country on which it depends on multiple levels, from supply chains to financial stability.
Military dependent sector
A recent report by Govini, a U.S. company specializing in defense software and military procurement analysis, has put concrete figures into a worrying strategic reality for Washington: that its defense industrial base is increasingly dependent on China.
According to the report, more than 40% of the semiconductors that support the Department of Defense's weapons systems and infrastructure come from Chinese suppliers . "Chinese semiconductor suppliers are inextricably linked to the supply chains of vital Department of Defense weapons, such as the B-2 bomber and the Patriot air defense missile," the document specifies.
The situation is not temporary, but structural. Between 2005 and 2020, the number of Chinese suppliers in US supply chains quadrupled. In the electronics sector alone, US dependence on China grew by 600% between 2014 and 2022 .
And while Washington has attempted to contain China's advance , for example by restricting chips for artificial intelligence, China has responded with a firm and gradual policy of controlling its strategic exports, such as rare earths, essential for the manufacture of advanced military equipment.
The domestic situation isn't helping either. US domestic production capacity is in decline.
There are key defense industry categories that are no longer manufactured in any of the 50 states. The situation is so critical that, according to military experts cited by Govini, 25 planned attacks would be enough to paralyze key sectors of US military manufacturing.
The country's industrial base is not prepared to sustain a protracted war or to support its allies under fire.
The strategic error has been to emphasize the race for technological innovation while neglecting the productive dimension. It's not enough to have new designs or theoretical capabilities if the industry can't manufacture them at scale, integrate them into existing systems, and respond quickly in the event of a conflict.
Currently, many of the materials, components, and microelectronics needed for U.S. military production are sourced abroad, and many of those supplies come from actors Washington considers directly hostile.
Meanwhile, China has not only strengthened its control over strategic components, but has also gained ground in the global arms market.
Over the past five years, Chinese companies have entered the ranks of the world's leading defense companies, exporting high-end systems including armed drones, precision-guided munitions, submarines, and frigates.
In industrial and logistical terms, the outcome is clear : the United States is also unprepared for a prolonged confrontation in the Indo-Pacific region .
Its productive structure shows gaps at every stage of the chain: where it has innovation, it lacks industrial capacity; where it still has some production, it lacks raw materials or local technological development.
In contrast, China not only produces more and controls strategic inputs, but has successfully integrated innovation, technical training, and industrial infrastructure.
While Washington focused on importing and reselling, Beijing invested in training scientists, sustaining unprofitable industries, and building a national manufacturing base. Today, China has 39 universities offering specialized programs in rare earths , for example, while the United States has none.
Manufacturing magnets or processing rare earths involves low profits and high investment, something the American profit-maximizing model systematically avoided.
Thus, while American capital sought rents, the Chinese socialist model built capacity. The result , as has been seen for miles, is an American economy dependent on external chains it doesn't control and an industrial base that, to a large extent, no longer belongs to it.
A fragile structure
The current weakness of the US defense industrial base is not an accident, but a direct consequence of strategic decisions made after the end of the Cold War. With the dissolution of the Soviet Union, US military spending was reduced, and companies in the sector adopted a logic of financial efficiency: mergers, outsourcing, and custom production.
This transformation did not reduce costs, but rather increased the unit price of each weapons system and eroded the capacity for large-scale production.
The Govini report explains that since 2008, the Center for Strategic and Budgetary Assessments of the United States has warned that the low-volume model is incompatible with mobilization in the event of conflict .
However, the Department of Defense's procurement system continued to punish any effort to maintain idle capabilities. Under the logic of "the lowest technically acceptable price," companies receive no funds to maintain personnel, warehouses, assembly lines, or strategic know-how outside of the current program.
The result is an extremely vulnerable military supply chain. Major contractors like Lockheed Martin and RTX rely on a pyramid of more than 30,000 small and medium-sized suppliers, half the number that existed just a few decades ago. Many have abandoned the sector entirely, reorienting themselves to the commercial market.
The loss of this industrial fabric cannot be reversed quickly.
Recent data confirms this: after the start of the conflict in Ukraine, the United States sent 7,000 Javelin missiles, a third of its inventory, at a production rate of just 2,100 units per year.
Despite the budget increase, it will take years to replenish the arsenals without affecting support for Kiev. The same is true of artillery shells: production went from 14,000 units per month to a planned 80,000 by 2025, while Russia fires up to 50,000 per day.
In the Pacific, the needs are even greater , as China alone has 17 naval shipyards and has deployed 340 new ships since 2020, with a goal of reaching 440 by 2030, while the US Navy operates with fewer than 300 ships, dispersed globally. Furthermore, US commercial shipbuilding capacity represents less than one-third of 1% of the world's total, compared to China's 35%.
The United States can no longer assume that its military power is backed by a robust manufacturing base. Military manufacturing is not a switch that flips on demand. The current structure was optimized for accounting efficiency, not protracted warfare.
In this context of growing economic and technological rivalry, the interdependence between China and the United States is emerging as a critical vulnerability, especially for Washington.
While data shows a deliberate effort by the United States to diversify its supply chains , with countries like Mexico and Vietnam, the structural reality remains that much of advanced manufacturing, strategic industrial inputs, and key electronic components remain tied to China, directly or indirectly.
Trump, with his renewed tariff policy, has intensified the confrontation, but has also exposed the limits of a strategy based solely on trade pressure.
Meanwhile, China has strengthened its productive base, boosting strategic sectors through domestic incentives, consolidating its dominance in rare earth minerals, and advancing in the global defense market.
Thus, beyond macroeconomic indicators and growth figures, the real area of dispute is control of the critical nodes of industrial and technological power.
And, on that playing field, the United States faces a dilemma: either redefine its productive model from the ground up or accept a position of strategic dependence that is increasingly difficult to reverse.
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