On November 19, 2025, the U.S.-China Economic and Security Review Commission submitted an annual report to Congress, warning that the Beijing authorities have the ability to leverage America’s dependence on their products and raw material supply chains, potentially causing disruptions in various manufacturing industries, from pharmaceuticals and electrical equipment to semiconductor production. The report called on lawmakers to compel related industries to understand and disclose such risks.
According to The Wall Street Journal, the latest report highlighted how earlier this year, the Beijing authorities cut off crucial rare earth supplies to the United States, which are essential for nearly all industrial products ranging from automobiles to jet engines.
This move by the Chinese Communist Party disrupted American manufacturing and gave Beijing a crucial bargaining chip during the earlier struggle with the Trump administration over partial removal of tariffs on Chinese imports.
The U.S.-China Economic and Security Review Commission issued a warning in the report, stating that Beijing’s vast industrial base gives it similar influence over other supply chains in the United States. For instance, China dominates the production of lithium batteries used in electric vehicles.
The report cautioned that situations similar to the rare earth crisis could be replayed across various industries in the United States.
The Commission emphasized that American policymakers still lack understanding of these vulnerabilities and the potential weaponization of economic dependencies by Beijing in times of conflict.
The report urged the government to compel American industrial enterprises to provide detailed explanations of their reliance on Chinese supply chains and their vulnerabilities, as many companies have minimal awareness of such risks.
In the past, Washington mainly focused on military equipment supply chains related to foreign countries. However, a series of events in other industries have exposed dangers faced by various sectors, such as the 2008 scandal involving adulterated Chinese heparin blood thinner production.
The COVID-19 pandemic in 2020 further highlighted that the Chinese Communist Party is a major supplier of essential goods including respirators and masks during times of high demand.
The report noted that China is increasingly controlling “industrial public resources,” combining state-led projects with new technologies to become a formidable competitor in advanced industrial sectors.
Leland Miller, co-founder of research firm China Beige Book and a current Commission member, expressed concerns that the pharmaceutical industry might be even more vulnerable than rare earths. Many generic drugs and most active pharmaceutical ingredients (APIs) are manufactured in China, presenting significant risks.
The Commission recommended that drug manufacturers selling products in the United States report the sources of their product materials.
Moreover, even if drugs are manufactured in third countries like India, the original suppliers of the active pharmaceutical ingredients could be located in China. This means that theoretically, Beijing could weaken the U.S. by cutting off raw material supplies to trusted countries at any time.
The report also highlighted China’s control over obscure industrial sectors like core semiconductor chips, essential for advancing modern economies and militaries.
Beijing’s dominant position is also evident in areas like electrical components used in power utilities in addition to rare earths and pharmaceuticals, attributed to the extensive scope of chemical production.
Economic and national security expert, Livia Shmavonian, another Commission member, stated, “Overall, it involves the entire chemical field.”
The Commission emphasized the need to revise regulations to enhance the U.S. government’s understanding of these vulnerabilities. However, the report also noted that achieving the goal of completely eliminating Chinese products is neither realistic nor necessary.