China’s grip on essential battery materials for U.S. defense shows how reliance on foreign powers can have dangerous consequences.
At a Glance
- China controls over 80% of critical battery materials, posing a national security threat to the U.S.
- The Chinese government has used state-led policies and investments to dominate the supply chain.
- The U.S. seeks to diversify supply chains and reduce dependency on Chinese materials by 2027.
- China’s control of battery materials is a geopolitical leverage point, with potential economic impacts.
China’s Strategic Dominance in Battery Materials
China’s control over more than 80% of the world’s critical raw battery materials is not a happenstance but a result of deliberate, long-term strategies. The Chinese government has implemented a state-led industrial policy, aggressively investing overseas and utilizing non-market practices to secure its dominance. They have strategically targeted materials like graphite, cobalt, and manganese, which are crucial for both defense and civilian technologies. The implications of this control extend far beyond economics, posing a significant national security threat to the United States and its allies.
China controls over 80% of battery materials crucial to US defense equipment, unsettling report reveals https://t.co/Uia0skMyOU
— Fox News (@FoxNews) July 23, 2025
China’s Belt and Road Initiative (BRI) has played a pivotal role in accessing mineral-rich developing nations, allowing China to secure massive deposits of lithium, cobalt, and other essential minerals. By providing domestic firms with direct manufacturing grants, tax exemptions, and ultra-low-interest loans, China has enabled these firms to outcompete global rivals. This vertical integration ensures China maintains control from raw material extraction to battery manufacturing, solidifying its market position.
Implications for U.S. National Security
The U.S. defense sector heavily relies on these materials for advanced military systems such as drones, radios, and emerging directed-energy weapons. China’s control over these critical components presents an immediate risk of supply disruptions, increased costs, and uncertainty for industries dependent on these materials. The U.S. faces a pressing deadline to eliminate Chinese materials from defense batteries by 2027, with new legislative and procurement requirements driving this urgency.
Recent developments underscore the gravity of the situation. In 2023 and 2024, China imposed new export controls on processed graphite and other critical materials, restricting exports to the U.S. and other countries. Meanwhile, the U.S. is accelerating investment in domestic lithium processing, with new facilities planned in North and South Carolina. However, these efforts are hindered by permitting obstacles, which account for roughly 40% of all project delays.
Policy Responses and Industry Challenges
The U.S. government is taking steps to address these challenges, with lawmakers introducing bills to incentivize domestic mining and processing and restrict the use of Chinese materials in defense applications. The Foundation for Defense of Democracies (FDD) report calls for a “muscular statecraft” approach, advocating for a national critical minerals stockpile, streamlined permitting, and international coordination to counter China’s dominance.
Despite these efforts, U.S. mineral mining and refining are not advancing quickly enough to meet national security demands. China’s subsidies and non-market practices continue to dwarf those available to U.S. firms, making it difficult for domestic industries to compete. The FDD analysts describe China’s strategy as “fundamentally parasitic,” exploiting non-market practices while other nations adhere to market rules.
