U.S. Officials Warn Of Scary CHINA Dependence In U.S. Supply Chain

U.S. officials warn of dire consequences as America’s supply chain remains heavily dependent on China’s industrial diamonds, exposing critical vulnerabilities in various sectors.

At a Glance

  • China produces 95% of the world’s industrial diamonds, a critical material for multiple industries
  • U.S. dependence on imported synthetic diamonds has fluctuated between 80% and 95% since 2018
  • China recently banned the export of industrial diamonds to the U.S., raising concerns about supply chain disruptions
  • Former Commerce official warns of urgent need to address U.S. supply chain dependence on China
  • Lack of domestic production and stockpiles leaves U.S. vulnerable to potential economic impacts

A Decades-Long Oversight

The United States finds itself in a precarious position as its dependence on China for critical materials, particularly industrial diamonds, comes to light. And that’s…not good.

This vulnerability, according to former Department of Commerce Official Nazak Nikakhtar, is the result of over two decades of neglect in addressing supply chain issues with China.

“We are running out of time. We really need to race to solve this,” Nazak Nikakhtar said.

The urgency of the situation cannot be overstated, as China’s dominance in the production of industrial diamonds poses significant risks to various U.S. industries, including automotive, aerospace, and defense sectors.

China’s strategic actions and unfair trade practices have contributed significantly to the U.S.’s current supply chain predicament. The Asian powerhouse produces an astounding 95% of the world’s supply of industrial diamonds, a critical component in advanced manufacturing processes.

The U.S. has been heavily reliant on imports of synthetic diamonds, with dependence fluctuating between 80% and 95% since 2018. This reliance has left American industries vulnerable to supply disruptions, a risk that has recently materialized with China’s ban on exporting industrial diamonds to the U.S.

China’s Strategic Maneuvers

China’s dominance in industrial diamond production is not accidental. It’s part of the country’s “Made in China 2025” policy, aimed at achieving global dominance in advanced manufacturing. The Chinese government has classified diamond manufacturing as a strategic sector, providing substantial subsidies to promote the industry’s growth.

“It’s just time to wake up. China has made clear that it is moving in this direction. We’ve got to take them at their word,” Nazak Nikakhtar added.

This strategic focus has allowed China to corner the market, leaving other nations, including the U.S., at a significant disadvantage. The recent export ban on industrial diamonds to the U.S. followed American export controls on semiconductor manufacturing equipment, highlighting the escalating tensions in the tech and manufacturing sectors between the two global powers.

The U.S. finds itself in a precarious position, lacking both a stockpile of industrial diamonds and sufficient domestic production. In 2023, domestic production met only 16% of the demand, leaving a significant gap that China has been all too willing to fill.

This stark warning underscores the potential economic impact if China continues to restrict exports of critical materials. The ripple effects could be felt across multiple industries, potentially crippling U.S. manufacturing capabilities and compromising national security.

Both the Trump and Biden administrations have recognized the need to address this imbalance, employing tariffs as a tool to counter China’s unfair trade practices. The Trump administration utilized Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 to impose tariffs, while the Biden administration has maintained and expanded these measures.

However, tariffs alone may not be sufficient to solve the deeply ingrained supply chain issues.

Trump needs to get to work quickly…