The Chinese government is tightening the screws on American investment in its artificial intelligence sector. The core purpose is to keep U.S. capital out of technologies it deems “strategically sensitive” to national security. The protective action is a reminder that Washington also needs to prioritize insulating our own critical sectors from foreign adversaries.
Few industries are more important to our national security than healthcare. More than 131 million people—nearly two-thirds of all U.S. adults—use prescription medications. Yet the United States has allowed its pharmaceutical supply chains to become dangerously dependent on foreign rivals—particularly China.
That vulnerability became strikingly clear during the pandemic, when U.S. leaders scrambled to secure masks, gloves, and other protective equipment from overseas. But our overreliance on China runs far deeper than just rubber and fabric.
Today, China produces an outsized portion of the world’s Active Pharmaceutical Ingredients (APIs). These are the chemical backbone of most medicines, from insulin to antibiotics to asthma treatments. In a crisis—whether military confrontation, sanctions escalation, or a broader trade disagreement—Beijing would have us by the pills.
It’s not theoretical. China has already demonstrated its willingness to weaponize supply chains. During recent trade disputes, Beijing leveraged its control over rare earth minerals—critical inputs for everything from aerospace systems to consumer electronics—to strengthen its negotiating position against the United States.
This kind of market dominance is by design. Every five years, leaders from across China congregate to decide a new national development plan. Because of the country’s highly-centralized structure, the government systematically targets strategic industries.
In 2020, that five-year plan focused on electric vehicles and semiconductors. Now, Beijing is expanding its ambitions into biotechnology and “frontier science.” China is positioning itself not just as a pharmaceutical inputs supplier, but as a potential gatekeeper of future medical breakthroughs.
Washington cannot let that happen. Fortunately, the U.S. has a powerful tool that our chief competitor across the Pacific doesn’t. Free market capitalism—as opposed to a top down, state-directed economy—is America’s competitive edge against China. Congress just needs to provide the right incentives so we can maximize on that advantage.
Recent tax reforms that allow manufacturers to immediately expense some of the costs associated with research and development are a strong start. These legislative changes are providing businesses with greater certainty to invest in domestic production and expand “Made in America” pharmaceutical capacity.
President Trump is adding fuel to that momentum through his pro-business agenda. A 2025 order that streamlines approvals for companies looking to onshore drug production is a prime example. But executive action is fragile. America’s next leader could reverse that progress with the stroke of a pen. As the Trump administration continues to hack away at layers of red tape, lawmakers should codify these reforms.
America already has a strong foundation to build from. Indiana, North Carolina, and the U.S. territory of Puerto Rico, among other areas, anchor a significant share of existing American pharmaceutical production. By encouraging more innovation in our own backyard, these hubs can be strengthened to secure supply chains and reduce our dependence on China.
Recent investments—including $300 million committed to Puerto Rico to expand domestic drug manufacturing capacity—are proof of concept.
U.S. Congressman Nathaniel Moran (R-TX) recently said it best when he warned “America’s medicine cabinet runs through Beijing.” As China tightens its grip, securing America’s healthcare supply chains against foreign disruption is not just sound economic policy—it is a national security imperative.
Will Coggin is the managing director of the American Security Institute.
This article was originally published by RealClearDefense and made available via RealClearWire.
