American defense startups are far too reliant on Chinese parts — and that poses a serious risk of exploitation by Beijing, experts told the Daily Caller News Foundation.
Business is booming as hundreds of defense startups have joined the growing U.S. military-industrial complex since 2021, according to The Wall Street Journal. But defense contractors are heavily dependent on China for parts for weapons systems, including motors, chips and rare earth minerals, which poses potential avenues for Beijing to exploit or hamper American technologies, experts told the DCNF.
“This is a serious problem for two reasons,” John Lee, senior defense expert at the Hudson Institute, told the DCNF. “First, as we saw during the pandemic, over-reliance on Chinese supply chains for components and inputs leaves countries and economies vulnerable to politically or policy-motivated restrictions being imposed by Beijing.”
“Second, components can have elements inserted into them without the knowledge of the end user. This could be spying equipment, channels for China to disable or damage the component from a distance, or even materials that can weaponize the component,” Lee said.
New defense contractors particularly rely on these parts because they don’t enjoy the same cash reserve that the industry giants do, and China makes and sells the parts for a cheaper price.
But these startups don’t want to be so reliant on China, given that the country is actively trying to undermine the U.S. and would likely be an adversary in a global war scenario, industry executives told the WSJ.
Decoupling from China-based entities proves difficult and expensive, defense startups told the WSJ, though it’s the only option in the long term.
“There’s a lot of lip-flapping about national security resilience manufacturing. But there’s no money for us to do this,” Scott Cololismo, CEO of defense startup LAND Energy, told the WSJ. LAND has some funding grants from the Pentagon, but needs more support to thrive, Colosimo explained.
The rare-earth minerals that China provides U.S. defense contractors — including neodymium, yttrium and samarium — are of particular value, given that they are essential for most high-tech military equipment, including laser and missile systems, jet engines, communications devices and even nuclear propulsion systems.
“Critical minerals are the building blocks for many of the most sensitive products in our defense industry,” Adam Savit, director of the China Policy Initiative at the America First Policy Initiative, told the DCNF. “China can abuse its dominant position in other critical mineral supply chains at any time.”
“The only long-term solution to this is to enact comprehensive permitting reform to approve domestic mining projects, and work with allied nations to develop new production when the U.S. lacks the relevant natural resources,” Savit said.
Savit’s warning that China can upset the supply chain of rare earth minerals also invokes a broader problem — China can cut the supply line for any of the parts needed by U.S. defense contractors, for any time or reason it chooses.
“If your supply chain runs dry, you have nothing to sell,” Ryan Beall, founder of drone manufacturer TILT Autonomy, told the WSJ.
‘It’s Alarming’: US-Funded Research Led To Over 1,000 Patents For China-Based Entitieshttps://t.co/tpr0NSD79X
Lee warned that the problem exposes the U.S. and West’s gaps in domestic supply chain capabilities for their respective defense industrial bases, which creates a vacuum that other actors like China find ways to exploit.
China supplies over 90% of the magnets used in motors for ships, missiles, satellites and drones, according to the WSJ. Republican Reps. Elise Stefanik and Rob Wittman sent a letter to an Air Force official last week and called the reliance on China “a serious national security threat,” pointing to an example in a report last year that found the Air Force increased its dependence on China for parts by 69%.
The idea to stop relying on China for resources became more popular after the COVID-19 pandemic, which created massive supply chain shortages in various sectors, including healthcare products. But in the defense capacity, it will take years to produce parts domestically, according to the WSJ.
“There has been a hollowing out of manufacturing and industrial capabilities in the West which provides China with an enormous advantage,” Lee told the DCNF. “In the event of a crisis against a country such as China, this will become very dangerous for the U.S. and its allies.”
Unable to wait for domestic capabilities to improve and increasingly wary of buying from China, new defense contractors are turning to other alternatives for parts, according to the WSJ. Sourcing components from Mexico and Southeast Asia, utilizing 3-D printing and buying parts in bulk have been some of the creative ways contractors are solving the problem.
Industry experts also expect that the U.S. government is likely to restrict some Chinese parts used by contractors in a bid to move toward domestic capabilities, according to the WSJ. Some restrictions on items used to produce cameras and radios already exist.
“If the government wants a U.S. supply chain, that’s fine, but they need to be clear about their requirements, and they need to pay for it,” Beall told the WSJ.
Featured Image: U.S. Navy photo by Mass Communication Specialist 2nd Class Aaron Lau
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This was no ordinary budget day. By orchestrating a floor-crossing during a media lock-up, the Liberals blurred scrutiny of a historic spending plan while inching toward a de facto majority. That sequence raises deeper concerns about media–political entanglements and the democratic legitimacy of building a majority outside the polls.
Toronto Sun columnist Brian Lilley, in a deeply reported Substack post yesterday, captured months of palace intrigue. A well-sourced politics reporter with lines into Conservatives and Liberals alike, he lays out the knowns, the known unknowns, and the plausible backroom plays. Carney’s courting began right after the April 28 election that left him sitting at 169 seats, Lilley writes. For weeks, the Liberals probed for weak ribs in the Conservative caucus; and on November 4, they landed one.
“One thing is clear, the Liberals have been trying to poach a lot of Conservative MPs and doing everything they can to convince them to cross the floor,” he concluded.
Why? According to Lilley, Carney has been “governing for the most part like he has a majority, and he clearly doesn’t want to engage in the horse trading that a minority Parliament requires, so poaching MPs can solve his problem.”
The fallout was already clear to see last week. And it doesn’t look good for Canadian democracy or Canadian media, which receives significant government subsidies. Even at surface level, the press corps was visibly distracted from its first duty to citizens: scrutinizing a historically large budget packed with nation-building promises and unanswered questions about feasibility. Veteran reporters have already acknowledged this.
In another piece this weekend, Catherine Tunney, a solid CBC reporter, explained how Pierre Poilievre was undermined this way: “For the Opposition, budget week is a communications gift. It’s an easy way for the party to call out government spending,” she wrote. “For a leader who has built his brand on calling out Liberal spending, tabling a budget with a $78-billion deficit is the political equivalent of pitching a strike straight down the middle to Dodger slugger Shohei Ohtani.”
But instead, “of taking a victory lap around the bases, [Poilievre] ended the week facing questions about his leadership — after losing one MP to his rivals and another resigning from federal politics altogether.”
The messaging continued yesterday, with another CBC report amplifying the Liberals’ narrative that Conservative leaders were actively bullying MPs not to cross.
CBC had to issue a correction. After publishing d’Entremont’s account that senior Conservatives “pushed” his assistant, CBC later updated the story to clarify that Andrew Scheer and Chris Warkentin “pushed open the door,” and the aide stepped aside — a meaningful distinction.
Stepping back from the noise, there is a deeper problem.
Making honeyed promises to floor-crossers is legal in Canada’s democracy. But Canada is in a mounting trade war involving China and the United States, in an increasingly dangerous, cutthroat geopolitical environment. Already, the prime minister is pledging renewed engagement with Beijing as a strategic partner.
Doing so in a minority Parliament means facing tough accountability questions — and bruising inquiries in ethics committee hearings. In a majority government, an unprecedented and risky, course-altering national policy — deepening ties with Beijing while loosening ties with Washington — is considerably easier to execute.
And what kind of partner is Carney choosing? Yesterday, Japan lodged formal complaints after a senior Chinese diplomat took to social media and threatened to “cut [the] dirty neck” of Japan’s new leader over her stance on Taiwan. On Friday, Prime Minister Sanae Takaichi had said a Chinese attack on Taiwan could constitute “a survival-threatening situation” for Japan, potentially requiring the use of force.
“We have no choice but cut off that dirty neck that has been lunged at us without hesitation. Are you ready?” Chinese Consul General Xue Jian said in a message posted on X, which was later deleted.
This is the government Carney is rapidly sliding closer to. The same regime that jailed Canadians Michael Kovrig and Michael Spavor in the Meng Wanzhou affair — and a government that, Canadian intelligence has warned, attempts to shape media narratives in Canada.
As The Bureau reported in 2023, Canada’s own Privy Council Office warned in a January 2022 Special Report that Beijing’s United Front Work Department targets Canadian institutions.
In a section alleging Beijing “manipulates traditional media” in Canada, the report details press conferences held in January 2019 by former Toronto-area Liberal cabinet minister John McCallum, to argue that Canada’s detention of Huawei executive Meng Wanzhou was illegal. McCallum, then ambassador to China, was forced to resign after the Conservative opposition condemned his comments.
In the fallout, according to the Privy Council Office report, Canadian intelligence uncovered that several Chinese diplomats in Canada were voicing support for McCallum. One Chinese consulate official “sent information” to an unidentified Canadian media reporter indicating Chinese Canadians have favourable impressions of McCallum, the report says.
Now back to Ottawa media’s role. Why and how did Politico get the floor-crossing scoop during the budget lock-up — and then, that same evening, co-host a post-budget reception branded “Prudence & Prosecco” at the Métropolitain Brasserie, where Finance Minister François-Philippe Champagne and well-placed Liberals mingled with reporters? Every veteran reporter knows political parties try to influence the press — they’re called spin doctors for a reason. But darker forces can ride the same channels. In Brussels, for example, European security services are investigating a former Politico reporter over alleged ties to Chinese intelligence — still unproven, but a cautionary tale about the murkiness of media–political ecosystems.
Lilley also documents how coverage of another rumoured floor-crosser, Matt Jeneroux, became part of last week’s fog machine. The Toronto Star reported a private meeting between Jeneroux and Carney involving senior Liberal strategists Braden Caley and Tom Pitfield; Jeneroux issued categorical denials to senior Conservatives. “Someone is lying,” Lilley writes — and whether or not a second crossing was imminent, the destabilization served its purpose. Other names floated, such as Michael Chong, were so implausible as to raise suspicion of calculated disinformation.
“I didn’t buy Chong either, but Liberals kept pushing that narrative,” Lilley wrote. “As someone who knows Michael a bit, I simply didn’t believe it, didn’t even reach out to ask — he later called me to confirm the rumours were bogus.”
It is geopolitically notable that Michael Chong — sanctioned by Beijing and repeatedly targeted in PRC pressure campaigns, including a Chinese intelligence operation targeting Chong and his family that Justin Trudeau’s government failed to notify him about — saw his name tossed into this mess. Who benefits from saddling Chong with corrosive rumours?
It would seem that not only the Liberals benefit, but so do Carney’s new “strategic partners” in Beijing. None of this proves any newsroom has wittingly acted in bad faith, nor is there any evidence that Beijing’s shadow looms in the Liberals’ media playbook. But it does suggest how a coordinated political operation can be abetted by domestic media distraction.
Now, consider darker possibilities that could be in play. Not necessarily last week, but in any number of major events and stories shaping relations among Canada, China, and the United States.
The bipartisan NSICOP 2024 Review into allegations of Chinese election interference in Canada’s last two federal elections found that “during the period under review, the intelligence community observed states manipulating traditional media to disseminate propaganda in what otherwise appeared to be independent news publications.”
It added: “Foreign states also spread disinformation to promote their agendas and consequently challenge Canadian interests, which posed the greatest cyber-threat activity to voters during the time under review.”
The report continued: “These tactics attempt to influence public discourse and policymakers’ choices, compromise the reputations of politicians, delegitimize democracy, or exacerbate existing frictions in society.”
According to the intelligence community, “the PRC was the most capable actor in this context, interfering with Canadian media content via direct engagement with Canadian media executives and journalists.”
So what do we have here? Carney’s Liberals have a natural interest in destabilizing the Conservatives and sending Pierre Poilievre — a prosecutorial-style politician who excels at exposing his opponents’ weaknesses — into early political retirement. Arguably, they have a well-founded interest in dividing the Conservative Party itself.
But using the media to float names of opposition MPs who never intended to cross is disinformation, plain and simple. And when that name is Michael Chong — long targeted by Beijing — the stakes rise. If Carney is tilting toward a “strategic partnership” with Beijing, and if that delays the Foreign Influence Transparency Registry, as critics such as Dr. Charles Burton warn, then the tactics on display have moved from questionable to unacceptable — and risk entangling the interests of the Liberal Party of Canada with those of the Chinese Communist Party in Beijing.
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President Donald Trump on Sunday said every American with the exception of the wealthy will receive $2,000 from the revenue the U.S. has collected from tariffs.
“A dividend of at least $2000 a person (not including high-income people!) will be paid to revenue,” Trump posted on Truth Social. He did not say when or how the tariff revenue would be distributed.
“We are now the richest, most respected country in the world with almost no inflation and a record stock market price. 401Ks are highest ever,” Trump wrote. “We are taking in trillions of dollars and will soon begin paying down our enormous debt, $37 trillion. Record investment in the USA, plants and factories going up all over the place.”
Trump has said he wants to use tariffs to restore manufacturing jobs lost to lower-wage countries in decades past, shift the tax burden away from U.S. families and pay down the national debt. Economists, businesses and some public companies have warned that tariffs will raise prices on a wide range of consumer products.
Trump’s Liberation Day tariffs have been challenged in federal courts as unconstitutional by some business groups and Blue states, who argue that only Congress has the authority to enact tariffs. The U.S. Supreme Court last week heard oral arguments in a consolidated case challenging the tariffs.
Even some of the court’s conservative justices seemed skeptical of Trump’s authority to issue sweeping tariffs. Trump addressed that skepticism in his social media post.
“So let’s get this straight? The president of the United States is allowed (and fully approved by Congress) to stop ALL TRADE with a foreign country (which is far more onerous than a tariff) and LICENSE a foreign country, but it is not allowed to put a simple tariff on a foreign country, even for the purposes of NATIONAL SECURITY,” he wrote. “That is not what our great founders had in mind. The whole thing is ridiculous! Other countries can tariff us, but we can’t tariff them? It is their DREAM!!! Businesses are pouring into the USA ONLY BECAUSE OF TARIFFS. HAS THE UNITED STATES SUPREME COURT NOT BEEN TOLD THIS??? WHAT THE HELL IS GOING ON???”
The Center Square’s Brett Rowland contributed to this report.
Dan McCaleb is the executive editor of The Center Square.
