Defense Industry Needs to Get Serious about Decoupling from China

Observers of the U.S. defense industry were hit with unwelcome news earlier this week when Greg Hayes, the CEO of Raytheon, announced that the company cannot fully decouple from China. Raytheon is the nation’s second-largest defense contractor in terms of contract revenue from the federal government. One reason Hayes cited for his company’s reliance on China is that nation’s dominance in rare-earth metals, which have become integral to many military technologies, from lasers to missile flight systems.

China currently accounts for more than half of the world’s rare-earth mining and around 90 percent of rare-earth processing. Whether or not Raytheon is ready to decouple, China might soon force its hand: China has already threatened to cut American businesses off from rare-earth elements.

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Alexander Hughes

Alexander Hughes, a student at Harvard University, is a former National Review summer intern.

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Observers of the U.S. defense industry were hit with unwelcome news earlier this week when Greg Hayes, the CEO of Raytheon, announced that the company cannot fully decouple from China. Raytheon is the nation’s second-largest defense contractor in terms of contract revenue from the federal government. One reason Hayes cited for his company’s reliance on China is that nation’s dominance in rare-earth metals, which have become integral to many military technologies, from lasers to missile flight systems.

China currently accounts for more than half of the world’s rare-earth mining and around 90 percent of rare-earth processing. Whether or not Raytheon is ready to decouple, China might soon force its hand: China has already threatened to cut American businesses off from rare-earth elements.