A report released November 13, 2025, by the U.S. Economic Security Task Force—cochaired by Justin G. Muzinich, Gina M. Raimondo, and James D. Taiclet—asserts that American leadership in artificial intelligence, quantum computing, and biotechnology is increasingly challenged by international competition. The report details how the United States currently relies on China for 70% of rare earth elements—reaching 99% for heavy rare earths—and faces a 65% drop in early financing for domestic biotech startups in the first half of 2025. This analysis underscores vulnerabilities in critical supply chains and underinvestment, necessitating strategic mobilization to maintain U.S. economic security and prevail in these foundational technology sectors.
U.S. Economic Security: Task Force Report Overview
The U.S. Economic Security Task Force report highlights growing strategic competition, particularly concerning artificial intelligence, quantum computing, and biotechnology. The report identifies significant vulnerabilities, including a heavy reliance on China for critical materials—70% of rare earths overall, rising to 99% for heavy rare earths—and key components like printed circuit boards (30% sourced from China). Addressing these dependencies is crucial, as China has demonstrated a willingness to leverage economic tools for strategic gain, investing $900 billion in these technologies over the past decade.
Private sector investment lags in crucial areas like quantum and biotechnology due to long development timelines and scaling challenges. Early-stage biotech financing dropped 65% in the first half of 2025, while China outspends the U.S. two-to-one on quantum research. The report recommends targeted government action, including expanding the National Defense Stockpile for critical minerals and incentivizing domestic biomanufacturing with six-month stockpiles of key starting materials, to correct these market failures and bolster U.S. innovation.
To regain leadership, the Task Force proposes establishing an Economic Security Center within the Department of Commerce. This center would enhance government coordination, technical expertise, and private sector partnerships. The report emphasizes a proactive approach to economic security, recognizing the convergence of economic power and national security. Institutional improvements are vital not only to address current vulnerabilities but also to prepare for future technological disruptions and ensure U.S. competitiveness.
Strategic Competition in Foundational Technologies
Strategic competition in foundational technologies – AI, quantum, and biotechnology – is escalating, demanding a focused U.S. response. China is investing heavily – $900 billion over the last decade – and rapidly advancing in these fields, aiming for dominance. This isn’t simply about economic growth; it’s about national security. The U.S. faces significant vulnerabilities, particularly reliance on China for critical inputs like rare earth elements (70% overall, 99% for heavy rare earths) and key pharmaceutical ingredients (80% of KSMs).
Private sector investment isn’t adequately addressing these vulnerabilities due to long development timelines and uncertain returns in quantum and biotech. Early-stage biotech financing dropped 65% in the first half of 2025 alone. China is outspending the U.S. in quantum research by a factor of two. This capital shortfall necessitates targeted government intervention to correct market failures, specifically through procurement initiatives (like a DoD-led quantum computer development) and incentivizing domestic manufacturing of crucial components.
To regain a competitive edge, the report recommends strengthening supply chain resilience and expanding the National Defense Stockpile for critical minerals. Establishing advanced biomanufacturing hubs with private co-investment, and six-month stockpiles of key pharmaceutical ingredients are also crucial. A new Economic Security Center within the Department of Commerce is proposed to improve coordination, technical expertise, and private sector partnership – vital for unleashing U.S. innovation and responding to future technological shifts.
China’s Technological Advancement and Influence
China has aggressively pursued technological leadership, investing an estimated $900 billion over the past decade in areas like artificial intelligence, quantum computing, and biotechnology. This investment is yielding results, with rapid advances in AI model performance and quantum communications. Beyond funding, China aims to indigenize its tech sector and dominate crucial supply chains, demonstrating a willingness to leverage these capabilities for strategic advantage—potentially “weaponizing” critical chokepoints in global technology flows.
U.S. technological competitiveness faces significant supply chain vulnerabilities, particularly concerning reliance on China. The U.S. currently sources 70% of rare earths (99% for heavy rare earths) and 60% of data center/chip components from China. Biotech also relies heavily, with 80% of key starting materials and 33% of global API capacity originating there. This dependence, coupled with a 65% drop in early-stage U.S. biotech financing in early 2025, highlights a critical need for domestic investment and diversification.
To counter these challenges, the report advocates for strategic government intervention, focusing on bolstering domestic manufacturing and supply chain resilience. Recommendations include expanding the National Defense Stockpile for critical minerals, incentivizing six-month stockpiles of biotech inputs, and accelerating development of a utility-scale quantum computer through Department of Defense procurement. These targeted actions aim to unleash U.S. innovation and reduce dependence on potentially adversarial nations.
Underinvestment in Quantum and Biotechnology
Underinvestment threatens U.S. leadership in quantum computing and biotechnology, critical sectors for future economic and national security. While China has committed $900 billion over the last decade to these areas, private capital in the U.S. shies away due to lengthy development timelines and uncertain returns. Early-stage biotech financing dropped 65% in the first half of 2025 alone, creating a dangerous disparity. This lack of funding hinders innovation and allows competitors to gain ground.
A significant vulnerability lies in concentrated supply chains. The U.S. currently relies on China for 70% of rare earths (99% for heavy rare earths), 60% of data center/chip chemicals, and 80% of key pharmaceutical ingredients. This dependence extends to quantum equipment, with single suppliers controlling crucial components. This overreliance creates strategic risks, potentially allowing economic coercion or disruptions during conflicts, highlighting the need for diversification and domestic production.
The Task Force report emphasizes market failures as justification for government intervention. Specifically, shortfalls in private capital for strategic technologies and over-concentration of supply chains warrant action. Recommendations include expanding the National Defense Stockpile, incentivizing domestic biomanufacturing with private co-investment, and accelerating quantum computer development through Department of Defense procurement. These targeted steps aim to unlock U.S. innovation and ensure long-term competitiveness.
Critical Supply Chain Vulnerabilities
U.S. supply chains exhibit critical vulnerabilities across foundational technologies like AI, quantum computing, and biotechnology. A significant dependence on China exists for essential inputs; the U.S. sources 70% of rare earths (99% of heavy rare earths), 30% of PCB’s and 60% of specialized chemicals for semiconductors, and a staggering 80% of key starting materials (KSMs) for biotech/pharmaceuticals from China. This concentration creates substantial risk, as geopolitical tensions or deliberate disruption could severely impede U.S. innovation and production capabilities.
Private investment further exacerbates these vulnerabilities. Funding for quantum computing and biotechnology lags due to long development timelines and uncertain returns, while investment in U.S. biotech startups decreased 65% in the first half of 2025. Simultaneously, China is outspending the U.S. in quantum research by a factor of two. This disparity threatens U.S. leadership, as China aggressively pursues dominance in these strategically vital sectors, potentially weaponizing supply chain control.
Addressing these vulnerabilities requires proactive government intervention. Recommendations include bolstering domestic manufacturing of semiconductor inputs, accelerating quantum computer development via DoD procurement, and establishing biomanufacturing hubs with private co-investment. Crucially, building six-month stockpiles of KSMs and APIs from trusted sources, alongside expanding the National Defense Stockpile for critical minerals, is vital to enhance U.S. resilience and mitigate risks posed by over-reliance on potentially adversarial nations.
Rare Earths and Key Mineral Dependence
The U.S. faces significant vulnerabilities in key technologies due to reliance on concentrated supply chains, particularly concerning rare earth minerals. Currently, China controls approximately 70% of global rare earth supply, rising to 99% for heavy rare earths – essential for manufacturing components in AI, quantum computing, and biotechnology. This dependence creates a critical choke point, potentially exploited during conflict or used for economic coercion. Addressing this requires diversifying sourcing, investing in domestic mining/processing, and accelerating research into material substitution technologies.
Private sector investment is lagging in crucial areas like quantum computing and biotechnology, exacerbating supply chain risks. While China invested roughly $900 billion in these sectors over the last decade, U.S. early-stage biotech financing dropped 65% in the first half of 2025. This shortfall isn’t simply a capital issue; the long development timelines and scaling challenges discourage investment. Government procurement and co-investment strategies, like a Department of Defense-driven quantum computer development program, are vital to stimulate the U.S. private sector.
Beyond rare earths, the U.S. is heavily reliant on foreign sources for numerous critical inputs. China provides 80% of key starting materials (KSMs) for biotech and 33% of global active pharmaceutical ingredient (API) capacity. Additionally, 30% of printed circuit boards and 60% of specialized chemicals used in semiconductors originate there. Establishing strategic stockpiles of KSMs/APIs, expanding the National Defense Stockpile, and incentivizing onshoring manufacturing through policies like those initiated during the Trump administration, are key to bolstering economic security.
Biotech Inputs and Pharmaceutical Supply Chains
The U.S. faces significant vulnerabilities in pharmaceutical supply chains due to heavy reliance on foreign sources for key inputs. Currently, 80% of Key Starting Materials (KSMs) used in drug manufacturing originate outside the U.S., with a substantial portion coming from China. This dependence extends to Active Pharmaceutical Ingredients (APIs), where China holds 33% of global capacity. The report highlights that 80% of U.S. biotech companies have at least one contractual relationship with a Chinese entity, creating potential disruption points.
A critical issue is the lack of domestic biomanufacturing capacity and stockpiles. The Task Force recommends establishing a national network of advanced biomanufacturing hubs, incentivizing private sector co-investment. Crucially, funding U.S. companies to build six-month stockpiles of KSMs and APIs sourced from trusted markets is proposed. This aims to reduce reliance on potentially adversarial nations and ensure a more resilient supply of essential medicines, addressing a clear market failure in strategic preparedness.
Beyond materials, the report emphasizes the broader need to address concentrated supply chains across the biotech sector. This includes rare earths (70% overall dependence, 99% for heavy rare earths) and components for data centers and chip manufacturing. Investing in domestic sourcing, expanding the National Defense Stockpile, and fostering partnerships to map and recover critical minerals are key recommendations. These steps aim to bolster U.S. economic security and reduce vulnerabilities to geopolitical risks.
Semiconductor Manufacturing and Inputs
Semiconductor manufacturing relies on a complex web of inputs, and the U.S. currently faces significant vulnerabilities. China dominates critical areas – supplying 70% of rare earths overall (99% of heavy rare earths), and a substantial 60% of the chemicals needed for chip production. Furthermore, 30% of printed circuit boards (PCBs) and integrated circuit (IC) substrates originate there. This dependence isn’t simply about availability; it represents a potential point of leverage for China, especially during times of geopolitical tension or conflict, demanding a focus on onshoring manufacturing of these key components.
Investment gaps exacerbate these supply chain risks. While China is investing heavily in next-generation technologies like AI, quantum computing, and biotech – dedicating roughly $900 billion over the past decade – private capital in the U.S. often avoids quantum and biotech due to lengthy development timelines and uncertain returns. Early-stage biotech financing dropped 65% in the first half of 2025, hindering domestic innovation. This disparity in funding necessitates government intervention to stimulate U.S. leadership in strategically vital sectors.
Addressing these vulnerabilities requires a multi-pronged approach. The report recommends building on existing initiatives like the AI Action Plan, specifically focusing on onshoring critical semiconductor inputs. Establishing a national network of biomanufacturing hubs and funding U.S. companies to stockpile key starting materials (KSMs) and active pharmaceutical ingredients (APIs) from trusted sources are also vital. Securing critical minerals through expansion of the National Defense Stockpile and international partnerships is crucial for long-term resilience.
Strengthening U.S. Export and Technology Controls
U.S. economic security is increasingly tied to leadership in foundational technologies – artificial intelligence, quantum computing, and biotechnology. A recent Task Force report highlights vulnerabilities, particularly reliance on China for critical inputs. Specifically, the U.S. sources 70% of rare earths, essential for many technologies, from China—rising to 99% for heavy rare earths. Dependence extends to 60% of chemicals used in semiconductor manufacturing and a staggering 80% of key starting materials for biopharmaceuticals. Addressing these supply chain risks is paramount for maintaining a competitive edge.
The report stresses the need for strategic government intervention to correct market failures hindering innovation. Private capital is currently insufficient in areas like quantum computing and advanced biotech, sectors demanding long-term investment. To counter this, the Task Force recommends bolstering domestic manufacturing through initiatives like onshoring semiconductor component production and establishing a national biomanufacturing network with private co-investment. Simultaneously, expanding the National Defense Stockpile for critical minerals is crucial for supply chain resilience.
Strengthening U.S. export and technology controls is a core recommendation. This isn’t simply about restriction, but about fostering domestic innovation and mitigating the risk of dual-use technologies falling into the hands of adversaries. The report proposes establishing an Economic Security Center within the Department of Commerce to enhance coordination, technical expertise, and private sector partnership – a vital step toward proactive management of technological risks and securing U.S. leadership in emerging technologies.
Onshoring Semiconductor Manufacturing
Onshoring semiconductor manufacturing is now a critical national security issue. The U.S. currently relies heavily on foreign sources – particularly China – for essential components. Specifically, 30% of printed circuit boards and 60% of specialized chemicals used in chip production originate there. This dependence creates vulnerabilities, as demonstrated by recent supply chain disruptions, and risks hindering innovation in key sectors like AI and quantum computing. Re-establishing domestic production is vital to secure U.S. technological leadership.
The report highlights significant underinvestment in strategically important technologies. While China spent an estimated $900 billion on AI, quantum, and biotech over the past decade, private capital often avoids these areas due to long development timelines and uncertain returns. Early-stage biotech financing in the U.S. dropped 65% in the first half of 2025. Government intervention, building on prior initiatives, is proposed to stimulate domestic manufacturing of critical semiconductor inputs and accelerate innovation.
Addressing these vulnerabilities requires a multi-pronged approach. Beyond simply encouraging domestic production, the report recommends expanding the National Defense Stockpile for critical minerals, accelerating permitting for resource extraction, and fostering international partnerships to diversify supply chains. Furthermore, establishing an Economic Security Center within the Department of Commerce would strengthen coordination and technical expertise, enabling a more proactive and effective response to evolving global economic challenges.
Accelerating Quantum Computing Development
Accelerating quantum computing development is crucial for U.S. economic security, facing significant competition, particularly from China’s $900 billion investment over the last decade. While private capital remains hesitant due to long development timelines and uncertain commercialization, government procurement—specifically through the Department of Defense—can stimulate the U.S. private sector. A focused strategy prioritizing the development of a utility-scale quantum computer is essential to regaining technological leadership in this pivotal field.
A major vulnerability lies in the U.S. reliance on foreign sources for key quantum computing components. Current supply chains reveal single suppliers for critical equipment like laser diodes, mirrors, and amplifiers. This dependence mirrors broader issues across foundational technologies, including rare earth elements (70% reliance on China overall, 99% for heavy rare earths) and semiconductor inputs (30% of PCBs, 60% of chemicals sourced from China). Diversifying these supply chains is vital.
To counter these risks, the report advocates for strategic government intervention to address market failures. This includes incentivizing domestic manufacturing of crucial inputs for semiconductors and bolstering the National Defense Stockpile with critical minerals. Further, establishing an Economic Security Center within the Department of Commerce would strengthen coordination, technical expertise, and public-private partnerships—essential for unleashing U.S. innovation and maintaining a competitive edge.
Building Advanced Biomanufacturing Capacity
To secure U.S. leadership in vital technologies, a significant expansion of advanced biomanufacturing capacity is crucial. Currently, the U.S. relies heavily on foreign sources – 80% of key starting materials (KSMs) and 33% of global active pharmaceutical ingredient (API) capacity reside outside the country. Establishing a national network of biomanufacturing hubs, coupled with funding to allow U.S. companies to stockpile six-month supplies of KSMs and APIs from trusted markets, will reduce vulnerabilities and strengthen domestic resilience.
A key challenge lies in the underinvestment in areas like quantum computing and biotechnology. Private capital often avoids these sectors due to lengthy development timelines and uncertain returns. Early-stage financing for U.S. biotech firms saw a 65% drop in the first half of 2025. Targeted government procurement, such as a Department of Defense push for a utility-scale quantum computer, can stimulate private sector investment and accelerate innovation in these critical fields.
Securing the entire supply chain is paramount. The U.S. faces dependence on China for essential inputs – 70% of rare earths, 60% of data center/chip chemicals, and a substantial portion of biotech materials. Expanding the National Defense Stockpile, streamlining permitting for domestic sourcing, and fostering international partnerships to map alternative sources are vital steps. This diversification reduces reliance on potentially adversarial nations and bolsters long-term economic security.
Securing Critical Mineral Supply Chains
The U.S. faces significant vulnerabilities in critical mineral supply chains, particularly concerning China’s dominance. Currently, 70% of all rare earths—rising to 99% for heavy rare earths essential for many technologies—originate in China. This extends to other key inputs: 30% of printed circuit boards, 60% of specialized chemicals for semiconductor manufacturing, and a staggering 80% of key starting materials (KSMs) for biopharmaceutical production. Reliance on single suppliers for quantum computing equipment, like specialized laser diodes, further exacerbates these risks and threatens U.S. technological leadership.
Addressing these weaknesses requires a multi-pronged approach beyond simply identifying the problem. The Task Force report advocates expanding the National Defense Stockpile (NDS) with critical minerals, streamlining permitting for domestic mining, and actively collaborating with allies to diversify sourcing. Simultaneously, investment in recovery technologies – extracting minerals from waste streams – and material substitution are crucial. A six-month stockpile of KSMs and APIs, funded through co-investment, would enhance resilience in the biopharmaceutical sector—currently heavily reliant on foreign sources.
The report emphasizes that market failures necessitate government intervention. Private capital shies away from long-horizon investments in sectors like quantum computing and biotechnology, creating shortfalls. This, combined with the geographical concentration of supply chains in potentially adversarial nations, justifies strategic government action. Proposals include Department of Defense procurement to stimulate the quantum industry, establishing advanced biomanufacturing hubs, and an Economic Security Center at the Department of Commerce to improve coordination and technical expertise.
Enhancing U.S. Workforce for Key Technologies
The U.S. faces increasing strategic competition in foundational technologies like AI, quantum computing, and biotechnology. A recent task force report highlights vulnerabilities, particularly concerning China’s aggressive investment – exceeding $900 billion over the past decade – and its drive to dominate key sectors. Critical supply chain dependencies are a major concern: the U.S. sources 70% of rare earths, and a significant percentage of essential components for semiconductors and biomanufacturing, from China. Addressing these dependencies is vital for long-term economic and national security.
Private sector investment is lagging in crucial areas like quantum computing and biotechnology due to long development timelines and commercialization challenges. Early-stage biotech funding dropped 65% in the first half of 2025, signaling a need for government intervention. The report recommends bolstering the National Defense Stockpile, accelerating permitting for critical minerals, and incentivizing six-month stockpiles of key pharmaceutical ingredients to reduce reliance on potentially hostile nations and ensure domestic resilience.
To regain technological leadership, the report emphasizes building a skilled workforce. This includes supporting trades workers essential for advanced manufacturing, and establishing an Economic Security Center within the Department of Commerce. Further, targeted government procurement, like the Department of Defense driving quantum computer development, can stimulate private sector innovation. These actions, alongside a focus on supply chain security, are intended to unleash U.S. innovation and ensure responsible technological diffusion.
Economic Security Center at Department of Commerce
The U.S. Department of Commerce is poised to establish an Economic Security Center, a crucial step in addressing vulnerabilities in key technologies. A recent task force report highlights increasing strategic competition, particularly with China, in areas like artificial intelligence, quantum computing, and biotechnology. The Center will focus on strengthening government coordination, building technical expertise, and fostering public-private partnerships – essential for mobilizing investment and securing supply chains currently reliant on potentially adversarial nations.
Critical supply chain dependencies pose a significant risk. The U.S. currently sources 70% of rare earths – rising to 99% for heavy rare earths – from China. Dependence extends to 60% of data center and chip component chemicals, and 80% of key starting materials for biotechnology. The Economic Security Center will work to onshore manufacturing, expand the National Defense Stockpile for critical minerals, and diversify sourcing, mitigating potential disruptions during escalating geopolitical tensions or conflict.
The proposed Center isn’t simply about isolation, but strategic investment. Private capital is currently underinvesting in areas like quantum computing and biotechnology due to long development timelines. The task force recommends accelerating development via Department of Defense procurement and funding biomanufacturing hubs. By addressing these market failures and fostering innovation, the Center aims to unleash the U.S. innovation ecosystem and maintain technological leadership globally.
