In its first month, the Trump administration has hit the ground running against China — and not just with tariffs.
It is considering withdrawing US troops from NATO’s front lines in the Baltics, redirecting military focus towards countering China’s influence in Asia-Pacific.
At the same time, the US State Department scrubbed language from its website that previously stated the US does not support Taiwan’s independence — a shift towards a more supportive stance on Taiwan’s sovereignty and a direct warning shot at the Chinese Communist Party (CCP).
Reorienting US intelligence agencies and the military to take a proactive stance against China is a sound policy, but as long as the American defense industry remains entangled with the CCP, our national security will be at risk.
Reliance on China
Despite growing tensions, American defense contractors and critical industries still rely on Chinese suppliers for key materials and components.
For example, the aerospace and semiconductor industries source rare earth minerals from China, which are essential for advanced weapons systems, fighter jets, and missile guidance technology.
If Beijing were to restrict exports in a crisis, America’s defense readiness could be compromised.
Some aerospace and defense contractors also use Chinese-processed advanced semiconductors, precious metals, and battery components for unmanned aerial vehicles, communication systems, and military electronics.
Mitigating the Risk
Thankfully, the Department of Defense is already taking steps to mitigate these risks.
In early January, the department added dozens of Chinese companies to its list of firms with ties to the Chinese military. The inclusion of entities like video game maker Tencent and battery manufacturer CATL suggests the DoD is casting a wide net. Under the 2024 National Defense Authorization Act, the department will be banned from doing business with listed companies starting in June 2026.
It’s common sense: the US should not buy military hardware from China. Not only would access to those products be lost in a conflict, but they could also serve as espionage tools during peacetime. Chinese drones, for example, could be remotely hijacked to send data back to Beijing.
Getting Tough on American Contractors
But simply targeting Chinese companies isn’t enough. If the administration truly wants to purge CCP influence from America’s defense sector, it must also crack down on American contractors.
Multinational corporations that do business in China while producing critical technology for the Air Force, Navy, and NASA expose themselves — and the country — to significant risks.
Take Tesla and SpaceX founder (and key Trump advisor) Elon Musk. His business ties to China could provide Beijing with access to sensitive US information.
Tesla manufactures half its cars in a massive Shanghai gigafactory and partners with CATL, a Chinese battery maker the DoD has designated a “Chinese Military Company.” Just getting the factory built required Musk to pledge support for “core socialist values.”
Additionally, companies operating in China must comply with Chinese intelligence law, which compels them to provide any requested information to the CCP.
While SpaceX does not do business in China, the CCP is eager to replicate its innovations, like the reusable Starship launcher. China’s state-run space program would love nothing more than to acquire SpaceX’s technology, and indirect access through corporate ties may be its best avenue.
Apple offers another concerning example. Despite being a private-sector company, its deep ties to China pose national security risks. Apple manufactures most of its iPhones there and has complied with CCP data laws by storing Chinese user data on state-controlled servers.
This sets a dangerous precedent. If a company as powerful as Apple must bow to Beijing’s rules, what happens when an aerospace or defense firm faces similar demands? The risks are too great to ignore.
Existing Proposals
Fortunately, there are existing proposals that could help address these risks.
Then-Florida Senator (and now Secretary of State) Marco Rubio once proposed the Space Protection of American Command and Enterprise (SPACE) Act.
The bill would prohibit NASA from purchasing or leasing telecommunications or aerospace equipment from any company affiliated with the CCP, the Chinese military, or key Chinese aerospace firms.
The broad definition of “affiliated with” would give the administration-wide discretion to determine which companies are too close to Beijing. This bill’s language could easily be broadened to include other forms of technology and to cover the DoD as well as NASA.
Another promising measure is the American Critical Supply Chains Act, which aims to establish a national strategic reserve of critical materials — including rare earth elements — while incentivizing domestic mining and refining.
The bill proposes tax incentives and direct subsidies for American companies building supply chain infrastructure outside of China. By securing independent sources of vital materials, the US can guard against economic blackmail from Beijing.
Given China’s extensive espionage efforts against the US, outlawing American firms’ compliance with Chinese data-sharing and data-housing mandates would also be a prudent step.
Opportunity for Action
China may be the second-largest market for many American companies, but at the end of the day, they will listen to the stipulations that the government of their number one market places on them.
China is unafraid to impose strict requirements on foreign businesses operating within its borders. The US must be equally assertive when it comes to national security.
By addressing not just direct business ties but also hidden (and often unintentional) CCP vulnerabilities within multinational corporations, the Trump administration has an opportunity to fundamentally reshape America’s economic and defense posture toward China.
The question is whether it will make this issue a top priority.
Make no mistake: If the administration opts to do so, it will do more to reshape the national security conversation over the next generation than arguably any other administrative initiative.
Nick Lampson, a former member of Congress from Texas, is a former Ranking Member of the Space and Aeronautics Subcommittee on the United States House Committee on Science, Space, and Technology.
The views and opinions expressed here are those of the author and do not necessarily reflect the editorial position of The Defense Post.
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