During Chinese President Xi Jinping’s visit to North Korea in early June, Kim Jong Un confirmed his support for Beijing’s “one China” principle, long used to claim sovereignty over Taiwan as an inalienable part of China. Following North Korea’s support for Russia in its war in Ukraine, including around 15,000 troops, questions have been raised about whether Pyongyang could play a role in a possible military confrontation between China and Taiwan.
If such a crisis erupts in Taiwan tomorrow, the United States would likely find itself at the end of its rope, given that its industrial capacity has been seriously weakened by decades of offshoring. Certainly, protracted conflict in the Asia-Pacific region is a scenario that U.S. policymakers have anticipated and prepared for over the years. However, even the most carefully planned strategic scenarios cannot fill gaps in Washington’s ability to build the ships, missiles, and other weapons components needed to support a long-term response.
Such weaknesses in the US defense industrial base no longer represent a simple economic problem; they now constitute an immediate strategic vulnerability. On June 17, U.S. President Donald Trump invoked the Defense Production Act, allowing the Department of Defense (DoD) to enter into voluntary agreements with private suppliers to eliminate bottlenecks and speed up supply chains. Following a protracted war in the Middle East over the past several months, during which Iran’s asymmetric capabilities have significantly depleted the U.S. military’s weapons stockpiles, critical shortages of rocket engines, igniters, guidance systems and air defense interceptors have emerged. Emergency expansion of domestic weapons production through deals such as the $1 billion investment in L3Harris’ rocket engine facilities aims to fill gaps in a manufacturing landscape that is severely lopsided in favor of international partners.
The relocation of the American industrial base began shortly after the collapse of the Soviet Union and was accompanied by the integration of international markets into a more globalized trade network. As more opportunities opened up for American companies in the form of cheaper labor and higher margins in emerging economies, many of them shifted some of their production overseas. Today, thousands of defense contractors supplying the DoD and producing critical components are based overseas, and some electronics and metals the United States depends on can even be traced directly to China.
Along with the dilution of domestic manufacturing to foreign suppliers, China’s rapid economic rise is exacerbating America’s strategic vulnerabilities. China serves as a hub for critical minerals, advanced electronics and renewable energy technologies, while its manufacturing size and processing capacity mean that several US industrial interests pass through its main geopolitical competitor. Beijing has already repeatedly demonstrated its willingness to weaponize its control over supply chains, first in a major incident involving rare earth shipments and more recently in direct response to U.S. restrictions on investments in semiconductors and technology.
A war between China and Taiwan, in which the United States would potentially continue to provide defensive weapons to Taipei under the provisions of the Taiwan Relations Act, could at the same time exploit the above overlapping vulnerabilities. Conflict could simultaneously place enormous pressure on semiconductor supply chains, shipping routes, and access to manufacturing hubs, bringing into stark relief how much of its industrial capacity the United States has allowed to migrate overseas over the years.
The immediate problem this poses is measured not simply by the number of factories based on American soil as opposed to those operating overseas, but by the much broader network of trained professionals and suppliers who have migrated with them. Without a broader revitalization project to rebuild these networks, increased federal budgets alone will not be enough to resolve the capacity gap. A concrete solution already applied in the industry comes from companies like Hadrian, which uses software-driven automation in the manufacturing process to standardize production and compensate for the shortage of specialized labor in the field. The speed and scalability of this solution is particularly relevant to the defense industry, where AI-driven autonomous factories of the future, like Hadrian’s Opus system, could serve as a new manufacturing model capable of meeting the demands of 21st century competition.
While the Asia-Pacific strategic environment could reveal the limits of the long-standing U.S. approach of viewing manufacturing as primarily an economic calculus, rebuilding the foundations of a local defense industrial base could figure prominently in Washington’s near-term policies. The war with Iran has not only exposed the fact that America’s weapons stockpiles are easier to deplete than previously thought, but also that their rapid replacement may face significant obstacles.
If the United States wants to maintain a credible deterrence posture in the Middle East, Asia-Pacific, or any other important strategic arena, it must urgently prioritize eliminating vulnerabilities in its supply chains. The real test of the next confrontation between the United States and an adversary will be military force as well as the ability to support it materially.