John G. Ferrari and Mark Rosenblatt
Multiple threats to US national security are converging.1 With wars in the Middle East and Ukraine, North Korea’s nuclear ambitions, record migration flows,2 and AI-fueled disinformation, Washington has arguably not faced so many crises simultaneously since World War II.3 The US is handling these challenges with a greatly weakened defense industrial base that cannot simultaneously equip the US and its allies and partners to fight.4
Any of these threats could rapidly escalate into a wider, more dangerous, and protracted conflict, a scenario not lost on Beijing or Moscow, which continue to strengthen their anti-Western alliance.5 Yet the US has not broken China’s choke hold on US military munitions and defense platforms, despite ample evidence of acute supply-chain vulnerabilities and a shrinking window to address them.
What is not discussed openly, but is probably widely known in China, is the US industrial base’s dependency on Taiwan for supplying the military with critical materials such as semiconductors. This dependency, contrary to what some may believe, does not strengthen deterrence of a Chinese invasion of Taiwan via a “silicon shield” defense.6 Indeed, it weakens deterrence, creating “non-deterrence,” as the US cannot build many military platforms and weapons without access to Taiwan.7 Moreover, as the American Enterprise Institute’s Chris Miller has noted, this “silicon shield” “emboldens China to attack, by making China think that the U.S. is less likely to come to Taiwan’s aid.”8
Therefore, to bolster deterrence and its ability to prosecute a long war, America must ensure it can resupply its defenses even if its supply lines to Taiwan and China are severed. Failing to do so may signalthat the US is not ready for a protracted conflict. As a Mitchell Institute for Aerospace Studies report aptly stated, “Potential adversaries might decide that a nation that lacked the capacity to sustain protracted offensive operations also lacked political resolve.”9
Simply put, the American industrial base cannot sustain the United States’ ability to fight and win a protracted war against China.10 China undoubtedly understands this, which may play into its strategy of coercing Taiwan. By failing to create resilience in its supply chains, the United States has, in effect, turned Taiwan into a valuable hostage, through which China can exact constant military and economic concessions from the United States. This hostage will allow China to disrupt America’s war-making capacity just when we need it most. Most importantly, China can hold Taiwan hostage for any number of global outcomes it desires, especially the dropping of US export restrictions. Accepting Taiwan’s treatment as a hostage continues the United States’ trend of not wanting to rock the boat too heavily in its relations with China.11
The Biden administration has made gestures acknowledging this crucial issue, particularly with its 2021 Supply Chain Disruptions Task Force, the CHIPS and Science Act, its most recent defense industrial base report, and the commerce secretary’s December 2023 speech at the Reagan National Defense Forum on the need for more funding to help oversee export controls.12 Despite the strong rhetoric, the actual problem-solving is clouded by social policies such as childcare centers at new manufacturing locations, environmental permitting, clean energy goals, an isolationist focus on “Buy America,” and a timeline that views this problem over decades rather than years.13
With the fiscal year (FY) 2024 National Defense Authorization Act (NDAA) process completed, the president can submit a 2025 budget that actually solves this problem in a relevant time frame, with a single focus on national security.14
Examining Defense Supply Chains’ Connections to China and Taiwan
Few efforts to analyze US supply-chain issues examine specific munitions and platform dependence from the bottom up, starting from the lowest tier of the supply chain.15 Today, no efforts propose specific actions to reduce platform or munitions dependence on Chinese and Taiwanese supply chains through inventory building, redesign, or second and new sourcing in the near term. One insufficient effort appears in Section 5949 of the FY2023 NDAA, which set a December 23, 2027, target for the Federal Acquisition Security Council (FASC) to prescribe regulations relieving the Department of Defense (DOD) from dependence on “electronic parts or products” from “covered semiconductor products or services” (supplied by named Chinese companies and others on the Entity List).16 This 2027 target is clearly insufficient considering that China could take Taiwan by force or blockade by 2027, as the former head of Indo-Pacific Command once suggested.17
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