Tariffs on digital displays used in TVs and smartphones could help prevent the US military from becoming dependent on China for the critical parts, a policy group chaired by CrowdStrike co-founder and cybersecurity expert Dmitri Alperovitch said in a report released Thursday.
National security experts have warned for several years that China's rising market share in displays, a critical part of both consumer and defense electronics that was long dominated by US allies such as Japan and Korea, could one day make it harder for the US military to source those parts in a conflict.
Last year, US President Donald Trump signed a bill that required the Pentagon to come up with a plan by 2027 for ending reliance on China, Russia, and other adversaries for the technology.
A report released Wednesday by the Silverado Policy Accelerator urges the Pentagon to look further down its supply chain than the displays themselves to the individual "cells" - a chip-like component that is the key ingredient for display panels. The report found that most displays assembled in countries such as Mexico or Thailand ultimately rely on Chinese-made cells.
The majority of high-end smartphones sold in the US still use Korean-made cells, Silverado's report found. But the report said Chinese-made cells, which cost less than those from competing nations, could account for as much as 75% global market share by 2028 and are already prompting factory closures in Japan and Taiwan.
Many broad tariffs struck down by US Supreme Court
"When we started looking at this, what we saw was another dashboard of flashing red emergency lights," said Sarah Stewart, a former US trade official who is CEO and executive director of the policy group. "We've seen this before in other sectors."
"We have really dangerous exposure here on some of these critical components that are powering our military, first responders, power plants, and literally every piece of critical infrastructure."
While many of Trump's broad tariffs have been struck down by the US Supreme Court, the Trump administration is still working on more targeted tariffs under specific statutes.
Silverado's report said display cells could fall within an ongoing "Section 301" unfair trade practices investigation, which could impose a tariff on Chinese-made display cells in finished goods.
"It gives a lot of flexibility to the executive branch to think about burden or restriction on US commerce in quite a broad way," Stewart said of the statute.