The United States is locked in a technological arms race the likes of which we haven’t seen since the Cold War — except this time, America is losing. This is a tough pill to swallow, but we must face reality: China is surpassing the United States in nearly every critical technology of the future.
China has a stranglehold over one technology in particular: batteries. After several decades of massive government subsidies, the Chinese have taken control over mineral supply chains that batteries rely on and have patented the technology needed to construct them in mass quantities and at minimum prices. As a result, nearly 85% of global battery cell production capacity belongs to China.
This dominance is a national security and economic risk for the United States. In the 21st century, batteries power everything, from household items to vehicles to military equipment. And this battery dependence will continue to grow. Allowing China to dominate the production of this critical technology would weaken America’s economic competitiveness while compromising national security and U.S. ability to maintain technological leadership in the world.
Fortunately, thanks to the leadership of the Trump administration and the Republican-controlled Congress, China’s dominance won’t last much longer.
First, Congress and Trump recently preserved the Production Tax Credit, which helps put American industry on level footing with heavily subsidized Chinese developers. The economic results of this policy are already becoming obvious. For example, in late July, the U.S. Department of Energy signed a memorandum of understanding with the University of Texas at Dallas agreeing to rigorous advance research in battery science and to strengthen supply chains for critical materials.
“The MOU will help address critical technology gaps and advance energy storage innovation to reinforce U.S. competitiveness,” according to the press release announcing the partnership. “Together, [DOE] and UT Dallas will work toward an abundant supply of domestic critical materials, which will be important to strengthen the future of battery manufacturing and energy security in the U.S.” This is exactly the type of America First policy victory that the Production Tax Credit is supposed to stimulate.
At the same time, Tesla’s Texas factory is ramping up production of its new 4680 battery cells, which are designed to deliver better range and lower costs without any dependence on foreign supply chains. Chalk up another win for American innovation, all thanks to Republican leadership.
Next, Congress and Trump protected American companies’ ability to license foreign technology to make American-made products. This strategic policy move allows U.S. businesses to take advantage of foreign tech in the same way China does — by using it to build more affordable American products, made by American workers. The end goal of course being to dominate the industry and beat China at its own game.
This is exactly how China got ahead in the first place. They took American inventions, like a type of battery called lithium iron phosphate, and built giant industries around them. Why shouldn’t American companies be allowed to do the same with China’s tech? Because of Trump and Congress’ policy maneuvering this summer, they can, and it’s really helping America compete globally.
Case in point: On Monday, Ford announced a $5 billion investment in electric vehicle manufacturing, including a $3 billion Michigan battery plant that will use licensed technology from a global leader in that industry. This facility is expected to create roughly 1,700 American jobs and produce affordable electric vehicles that can compete directly with Chinese imports on price and quality.
To wrest control over battery production back from China, we must learn from them, just as they learned from us, by requiring Western automakers to enter joint ventures with Chinese firms to sell their vehicles there.
China may hold the lead today, but with Republicans in charge, it won’t for long. The tide is turning. America is building a resilient domestic manufacturing base that can outcompete China on everything, including cost, quality, and scale. America will not cede its leadership in critical technologies any longer. The investments in battery research and expansion of manufacturing capacity we are seeing today are creating a stronger, more independent supply chain that will last for generations to come. And we’re not done yet. In the years ahead, we will see even more breakthroughs and more factories powered by American ingenuity and made by American hands. We are on the right path, and if we continue to prioritize innovation, protect intellectual property, and support American manufacturing, the history books will classify China’s current dominance as a fleeting moment. America is ready to lead once again, and this time, it won’t let go.
Col. Terry Thompson, U.S. Air Force (ret.), was a war planner at the Pentagon and a wing commander at Dyess Air Force Base, Texas. He is also a former Professor of Economics at John Brown University Soderquist College of Business.
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