A few weeks ago, US President Donald Trump had to back down in his trade war with China on one of his main battlegrounds: the transfer of advanced chips, such as those from NDVIA, to the Chinese technology industry. The lifting of the measure, designed to curb Chinese AI development, was negotiated with Beijing in London in exchange for Chinese companies selling strategic minerals to the US arms industry, including samarium, used to make heat-resistant magnets used in guided missile systems and military fighters like the F35.

Washington’s backtracking shows how it increasingly needs Beijing to make its weapons. In total, it relies on Chinese suppliers for 40% of its most sensitive weapons systems, according to a report by Govini, a US defense software company.

Among some of the most striking facts in the report is that the United States relies on China for 40% of the semiconductors in its weapons systems. Moreover, its B-2 bombers and Patriot missiles contain thousands of Chinese components. Chinese suppliers to the arms industry quadrupled between 2005 and 2020. The authors, moreover, estimate that US reliance on Chinese electronic artifacts grew by 600% since 2014. Systems such as the F/A-18, Ford aircraft carriers, and nuclear submarines rely massively on Chinese technology. “US production capacity plummeted after the Cold War,” according to the paper’s authors, Jeffrey Jeb Nadaner, former deputy assistant secretary of Defense for Industrial Policy, and Tara Murphy Dougherty, CEO of Govini.

The authors estimate that in 2005, there were 12,000 Chinese suppliers to the US arms industry. By 2023, the figure reached 43,000. Each Javelin anti-tank missile, used by Ukraine in its conflict with Russia, contains more than 200 Chinese semiconductors, while Ford-class aircraft carriers carry more than 6,000, F/A-18 fighters more than 5,000, and Virginia-class submarines more than 4,000. With this dependence, if Washington, for example, wanted to support Taiwan in a conflict with Beijing, it would send weapons full of Chinese semiconductors.

In the shipbuilding industry, the comparison is even worse. The United States has only five shipyards to build warships, while China has 17. Beijing’s Pacific fleet exceeds 340 ships and will grow to 440 by 2030. The authors estimate that China accounts for more than 35% of world shipbuilding, South Korea for more than 35%, Japan for 16%, and the United States for less than 1%.

Of course, the big question is how a country like the United States, with the highest military budget in the world, more than US $800 billion, does not have any industrial autonomy to manufacture its weapons. In fact, its armament capacity is quite poor. According to the authors, this can be seen in conflicts such as the one in Ukraine, where the United States produces 2,100 Javelin missiles per year when Kiev’s daily needs are 500. The same thing happens with artillery: the US industry manufactures 15,000 155 mm projectiles per month when Ukraine consumes that amount in hours in the conflict.

According to Govini’s experts, this is due to a series of factors, including the end of the Cold War and the merger of arms companies. “When the Soviet Union collapsed and US military spending contracted, US defense companies merged and adopted a lean production model and other financially driven ‘efficiencies.’ That approach constituted the formula for staying in business. It did not deliver any weapons cost savings, but resulted in a spike in per-unit price increases. In addition, with declining orders and the new business model, weapons stockpiles declined along with the production capacity to regenerate them.”

These mergers halved the number of medium-sized firms, which manufactured for the large contractors: the total of 60,000 small and medium-sized firms fell to 30,000. The authors, of course, also blame the Pentagon, Congress, and the government for promoting a “lean production” model which does not favor spending on industrial facilities, manufacturing lines, or specialized personnel for contingencies.

For this reason, according to them, “the arms industry cannot meet the production demands to support allies under fire and deter war in the Pacific.” For example, if there were an intense conflict in Taiwan, the United States would exhaust its stockpile of critical missiles within a week, according to a war simulation by the Center for Strategic and International Studies (CSIS).

And if that were to happen, as with critical minerals, the US would go to war against China with weapons filled with Chinese semiconductors.

Source: Diario Red via Orinoco Tribune