With the incoming Trump administration, many suppliers and manufacturers in the defense sector are concerned that proposed tariffs on China may cause material shortages that lead to production problems. In the event that parts they depend on from Chinese manufacturers become unavailable due to the new policies, many defense manufacturers might find themselves scrambling to find replacements.
A New Challenge for Defense Supply Chains
In addition to increasing tariffs by 10% on Chinese manufacturers, Trump has also promised to increase taxes on all imports from Canada and Mexico by 25%. In 2023, the United States imported more than $900 billion in goods from Mexico and Canada. Changing this policy may violate the United States-Mexico-Canada Agreement (USMCA) and undermine trust in U.S. trade agreements and cooperation. Additional tariffs on Chinese goods may further degrade our relationship, constrict supply chains, and increase costs. These tariffs will impact both defense and consumer product supply chains if they are implemented.
Addressing Supply Chain Weaknesses
While the US Navy and Army have made significant efforts to reduce their dependence on Chinese manufacturing in recent years, the Air Force and defense agencies have actually become more dependent on China for components of their supply chains, such as rare earth elements and critical materials. This increased dependence raises concerns over the vulnerability of the supply chain and the strength of U.S. defense systems in the face of geopolitical tensions.
COVID-19 revealed vulnerabilities in the U.S. supply chain and disproportionate reliance on Chinese suppliers. Our reliance on these foreign supply chains raises many concerns surrounding intellectual property theft, counterfeit parts, issues with lead times, and rising transit costs.

Risks With Dependence on Foreign ManufacturingÂ
Microelectronics manufacturing has historically been a major source of counterfeit goods, ranging from discrete components such as resistors and diodes to finished products like routers, switches, and LRUs. In some cases, counterfeit items are made from used components or second-quality goods that are concealed and relabeled, which can pose a danger to mission-critical equipment.
Some risks are that these suppliers will exploit our dependence on the supply chain or use malicious software and hardware to steal sensitive information.
Plans for the Future
The US CHIPS Act calls the investment of $39.0 billion. to incentivize US companies to build semiconductor plants in the US and invest in R&D to improve electronic component technology and supply chains. For the US Defense industrial base to remain competitive and resilient, we must reshape our strategy to meet global challenges. In January, the DoD released a plan to implement this, which included building a resilient supply chain, enhancing workforce readiness, and enhancing economic deterrence. The DoD recommends stockpiling critical systems, diversifying the supplier base, expanding production methods, and addressing potential cyber threats to the supply chain as the first steps toward strengthening the system.

Cevians’ Contribution to Domestic Supply Chains
Cevians contributes to the U.S. defense supply chain by focusing on vertical integration and domestic manufacturing. By investing in domestic manufacturing capabilities, producing most sub-assemblies and components in North America, and partnering with U.S.-based suppliers, Cevians minimizes reliance on foreign sources. These efforts not only enhance supply chain resilience but also contribute to the ongoing reinforcement of the U.S. Defense Industrial Base, ensuring greater security and reliability for critical defense applications.
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