By: Scott Hopper, Supply Chain Security Expert, Springfield, VA – ODNI released the 2025 Annual Threat Assessment (ATA) of the US Intelligence Community in March of this year.
For those leaders in the field of supply chain security and supply chain risk management, the report highlights escalating risks particularly from Chinese state directed- coercion and cyber prepositioning. I included some highlights from the report below and added some historical examples from recent memory to help illustrate how these potential threats could play out in the future. This is a clear and deliberate shaping campaign by a determine adversary.
Page 12: China’s Dominance in Critical Supply Chains, China is leveraging a state-directed approach to dominate global strategic supply chains, increasing global dependency on Chinese sources for upstream inputs and downstream manufacturing.
Implications for US suppliers? U.S. industries and suppliers in critical national security supply chains will face heightened vulnerability to supply disruptions and economic coercion.
Historical Example: In early 2020, the U.S. faced critical shortages of PPE, ventilators, and pharmaceuticals due to heavy reliance on Chinese suppliers. As China prioritized its own needs, exports were delayed or restricted, leaving U.S. hospitals unprepared. Some analysts believed Beijing used this leverage to reward countries that muted criticism of its pandemic response.
Page 12: Economic Coercion through Supply Chain Control, Beijing uses trade regulations, logistics barriers, and symbolic sanctions to punish or influence countries opposing Chinese policies.
Implications for US suppliers? There is a risk of politically driven disruptions in supply chain continuity for U.S. firms.
Historical Example: In 2010, after Japan detained a Chinese trawler captain near the Senkaku Islands, China informally blocked rare earth exports—vital for electronics and defense—cutting off over 90% of Japan’s supply. The move disrupted major firms like Toyota and Sony, exposing Japan’s strategic dependency.
Page 13: Control over Critical Minerals, China controls global processing of gallium, germanium, antimony, and rare earths, and has shown willingness to restrict exports during geopolitical disputes (e.g., 2024 ban on semiconductor metals to U.S.).
Implications for US suppliers? U.S. industries and suppliers in critical national security supply chains will face heightened vulnerability to supply disruptions and economic coercion.
Historical Example: In December 2024, China banned exports of gallium, germanium, and antimony to the U.S. – minerals vital to semiconductors, defense systems, and green tech. The move disrupted supply chains, drove up costs, and highlighted U.S. reliance on foreign sources. A full gallium cutoff alone could cut U.S. GDP by $8.2 billion.
Page 11: Cyber Threats to Critical Infrastructure and Supply Networks, China’s Volt Typhoon and Salt Typhoon campaigns have penetrated U.S. telecom and critical infrastructure networks to establish pre-positioned access for future disruption.
Implications for US suppliers? U.S. supply chains could be deliberately disabled during conflict or crisis.
Historical Example: Between 2023 – 2024, the U.S. uncovered that China’s Volt Typhoon cyber campaign had stealthily infiltrated critical infrastructure – power grids, ports, rail, telecom, and fuel systems – needed to mobilize a U.S. military response to a Taiwan invasion. This deliberate prepositioning enables China to disrupt troop movements, delay military logistics, and cripple US defense supply chains, interdicting any US response without even firing a shot.
** If you aren’t familiar with Volt Typhoon and Salt Typhoon, look at this. This is important.
Page 14: Semiconductor Supply Chain Vulnerability, China leads in legacy chip production and is expanding capacity, posing a supply risk to U.S. industries reliant on semiconductors for vehicles, medical devices, and defense systems.
Implications for US suppliers? We are strategically dependent on adversarial sources for foundational technology at the lower tiers of our supply chains.
Historical Example: Throughout the 2020s, the U.S. has become more reliant on Taiwan’s TSMC for advanced semiconductors – critical to weapons systems, AI, and defense platforms. With over 90% of cutting-edge chips made in Taiwan, a Chinese invasion or blockade could sever access, crippling U.S. defense production and preventing us from sustaining our nation’s critical weapon systems in a protracted war.
Page 15: Medical and Pharmaceutical Supply Chain Dependence; The U.S. imports of Chinese pharmaceuticals rose from $2.1B in 2020 to $10.3B in 2022. China could exploit this leverage in future disputes.
Implications for US suppliers? We have a strategic exposure in public health and biodefense for instances of bioterrorism or other acts to weaponize infectious disease or genetically engineered pathogens.
Historical Example: In 2001, the anthrax attacks exposed major gaps in U.S. biodefense, showing how even a limited biological threat could cause national disruption. Today, U.S. dependence on China for key pharmaceuticals and medical supplies – like antibiotics, APIs, and PPE – amplifies that risk. In a future bioterror event or pandemic, supply disruptions or export restrictions from China could cripple our public health response.
Page 13: Strategic Maritime and Arctic Infrastructure Expansion, China is investing in Arctic shipping routes and infrastructure to secure resources and bypass traditional trade chokepoints
Implications for US suppliers? US suppliers could see a potential rerouting of global logistics flows under Chinese influence.
Historical Example: In 2016, China’s COSCO took control of Greece’s Port of Piraeus, turning it into a key hub for Chinese trade into Europe. Backed by the Belt and Road Initiative, this shifted shipping away from traditional Western ports, showing how China can and will reroute global logistics flows to expand its strategic influence.
What do you know about Chinese ZPMC Cranes? Read this.
The 2025 ATA Report from ODNI highlights the growing risks to U.S. supply chain security, particularly from China’s state-directed strategies, economic coercion, and cyber prepositioning. China dominates critical supply chains for semiconductors, medical supplies, pharmaceuticals, and strategic minerals, creating vulnerabilities that can be exploited during crises or conflict. There are historical examples that demonstrate where supply chains can be used to coerce or even cripple a strategic competitor or adversary. China’s cyber campaigns, such as Volt Typhoon, have quietly infiltrated U.S. infrastructure – ports, power grids, telecom, and logistics systems – positioning Beijing to disrupt defense supply chains during a Taiwan conflict. China is positioning today for the inevitable “reunification.”
China is also reshaping global logistics through strategic investments to reroute trade flows in its favor. These state-directed actions are clear shaping actions by the People’s Republic of China (PRC) to interdict a US response to Chinese aggression. Shaping the battlespace is not a concept unique to U.S. military war planners. Our adversaries do the same. For example, Chinese state-owned firms operate in U.S. ports, and many terminals use ship-to-shore cranes manufactured by ZPMC, a Chinese state-owned company. These cranes, using Huawei-linked communications systems, contain sensors capable of tracking cargo and transmitting data. U.S. officials warn they could be remotely accessed or sabotaged in a conflict, allowing China to disrupt military logistics, delay deployments, or manipulate cargo flows.
We must protect our nation’s critical supply chains by understanding where our nation faces risk. There’s a growing tendency to reduce the complex challenge of supply chain security to a day-to-day problem that can be mitigated with a panacea, SCRM software solution. SCRM software helps visualize supply chain interdependencies and can provide critical data highlighting risk at the lower tiers of a supply chain. However, the state-directed actions highlight in this report are malicious and purposeful efforts from a determined adversary seeking to interdict our nation’s supply lines with non-kinetic action. This is a national security issue – not just a data problem. This topic that needs war planners and the real-world supply chain experts engaged in Phase-0 shaping and planning. We need to anticipate adversary plans, build supply-chain resilience, and ensure mission readiness when it counts.
