In the mid-1990s, researchers at the University of Texas at Austin developed lithium iron phosphate, the cathode chemistry that would come to dominate the global electric vehicle battery market.1 The technology was American. A few years later, A123 Systems, a start-up spun out of MIT, commercialized it, building what was then the largest lithium-ion battery factory in North America with the help of a $249 million Department of Energy grant.2 The technology worked. The company had customers, including several leading automakers.
But the broader ecosystem was not there: EV demand materialized far more slowly than projected, manufacturing costs remained high without the scale to drive them down, and no institutional mechanism existed to bridge the gap between a working technology and a commercially viable industry. The company received substantial public funding, but a single grant, however large, cannot substitute for the sustained ecosystem support at the early and scale-up stages that modern industrial production requires. A123 filed for bankruptcy in 2012. In 2013, China’s Wanxiang Group acquired it.3
Meanwhile, China was building that ecosystem. The government launched EV battery subsidies in 2009, mandated technology transfer from foreign automakers, and designated advanced batteries as a strategic priority under Made in China 2025.4 Chinese firm CATL, founded in 2011, scaled the same lithium iron phosphate chemistry that American researchers had invented and A123 had tried to commercialize. By 2017, CATL was the world’s largest battery producer. Today it holds roughly 38 percent of the global market,5 with China as a whole responsible for nearly 80 percent of global EV battery cell production.6 BYD, another Chinese manufacturer, outsold Tesla in 2025 by nearly three to one (4.6 million vehicles versus 1.6 million), drawing on its expertise in battery manufacturing. The chemistry was ours; the industry is theirs.7
This is not an isolated story. It is a pattern that repeats across the sectors most critical to American economic and national security. China controls over 60 percent of global rare earth mining and 90 percent of processing; MP Materials operates the only active rare earth mine in the United States.8 The solid rocket motor supply chain, which is essential to America’s nuclear deterrent and missile defense, has collapsed from six qualified domestic suppliers in the 1990s to two today.9 China installed 295,000 industrial robots in 2024 while the United States installed 34,000, a disparity that has accelerated since Covid.10 We now import over half of our active pharmaceutical ingredients, and Chinese companies now run nearly a third of global clinical trials, up from just 5 percent a decade ago.11 Unsurprisingly, China now accounts for 35 percent of global manufacturing volume (three times the American share) while leading in research and development in sixty-six of seventy-four tracked technology areas.12
These figures are not, of course, mere abstract facts; they represent genuine economic and employment realities: for example, the automotive sector alone supports nearly eleven million American jobs.13 They also carry serious security implications: a defense-industrial base that cannot surge production, pharmaceutical supply chains dependent on geopolitical rivals, and critical minerals choke points that give Beijing leverage over American technology.
The argument here is narrower than a call to reclaim every lost industry. Investment should instead be directed at sectors where American technology and innovation exist but the infrastructure to commercialize them domestically does not—and where the national security case is clear. Among these sectors are rare earth processing, where proven American technology faces predatory state-backed pricing; defense-industrial reconstitution, where the market failure is supply chain atrophy and coordination collapse, not labor cost differentials; and advanced shipbuilding techniques and autonomous vessel design, where the United States retains technological advantages that could reshape warfare.
In short, strategic capital must target the start-up and scale-up gap in advanced industries with national security implications. It is not an attempt to finance away comparative advantage in commodity production. Every sector and every investment should be evaluated against this standard. The encouraging news is that the United States has begun to act.
The Strategic Capital Gap
Over the past several years, the federal government has started using its balance sheet to invest directly in strategic sectors.
Consider MP Materials. The Pentagon acquired a $400 million equity stake in America’s only rare earth miner (through convertible preferred stock and warrants), bundled with a ten-year offtake agreement for the full output of its new magnet facility and a price floor of $110 per kilogram, roughly double the Chinese market price. The price floor is not a subsidy for uncompetitive production. It is the cost of neutralizing Beijing’s demonstrated willingness to weaponize supply chain dominance, most recently through export controls in April 2025, by ensuring that state-backed dumping cannot destroy private investment in domestic rare earth capacity (as it did to Japan in 2010).14
The price floor absorbed a specific geopolitical risk that no private instrument could hedge. The private market response was immediate. JPMorgan and Goldman Sachs committed $1 billion in debt financing, Apple invested $500 million, and MP raised an additional $650 million in secondary equity. $400 million in government risk absorption catalyzed over $2 billion in private capital, a five-to-one multiplier.15
Or consider L3Harris. The Pentagon invested $1 billion through a convertible preferred security to rebuild solid rocket motor production capacity. This was not a capital availability problem: L3Harris is a $21 billion revenue defense contractor with ready access to public markets. The problem was that decades of consolidation reduced the domestic solid rocket motor supply chain below minimum viable scale, creating a national security vulnerability that no single firm had the incentive to resolve alone.
L3Harris’s CEO Christopher Kubasik was explicit about why private capital alone would not close this gap: “We talked about $3 billion of free cash flow in 2026 for L3Harris shareholders. I think taking a third or half of that and investing in Aerojet Rocketdyne capex would not be viewed positively by our existing shareholder base.”16 The government’s equity investment addressed a coordination failure: it signaled permanent commitment to rebuilding the supply chain, enabling L3Harris to invest in facilities, workforce, and supplier development on a timeline that a standard procurement contract would not justify. A conventional procurement contract, which can be reduced or canceled, could not deliver the same signal of permanence. The convertible structure—converting to equity when the unit goes public—aligns government and company incentives through the multiyear rebuild.17
These are two different deals with two different structures, but both ultimately serve the same purpose: investing in domestic capabilities where the government occupies a specific position in the capital structure that private investors are least appropriate to fill. Government catalyzes the private sector: a five-to-one crowding-in ratio for MP Materials, the forthcoming IPO for L3Harris’s missile unit.
These commitments sit alongside broader interventions, such as the chips and Science Act for semiconductor reshoring, the Inflation Reduction Act and Infrastructure Investment and Jobs Act for energy transition, and Project Vault, a $12 billion public-private partnership for strategic critical minerals stockpiling that is backed by $10 billion from the Export-Import Bank (EXIM) and which represents the largest transaction in the institution’s history.18 The political will for strategic investment is bipartisan and real.
What is missing is not ambition but architecture. Each of these deals was negotiated individually, using whatever authorities happened to be available. MP Materials was funded through Defense Production Act Title III powers delegated by executive order. L3Harris used Industrial Base Analysis and Sustainment (IBAS) authority, the Pentagon’s mechanism for sustaining critical elements of the defense-industrial base. Through a separate statutory channel, the chips Act has facilitated hundreds of billions of new domestic semiconductor manufacturing investment, including production of advanced node chips. Three landmark deals, three different legal bases, no connecting institutional framework.
There is no permanent institution that identifies where strategic capital should flow, determines which agency is best positioned to provide it, and specifies with what instrument. The United States is reactive rather than proactive: we are responding to crises as they emerge rather than systematically building the industrial capacity we know we will need. The cost of this reactive posture is higher spending, duplicated effort, and greater security and economic risk than a coordinated approach would require. And, of course, the innovators who never come forward at all for lack of a desire to engage in a bureaucratic nightmare.
The fiscal fragility is already visible. The MP Materials price floor alone creates an estimated $300 million in annual obligations that exceed the entire Defense Production Act fund budget request for fiscal year 2026.19 Each new ad hoc deal adds recurring commitments without a standing appropriations stream to support them.
The Case for EXIM as a Coordinating Institution
If the United States needs a strategic capital architecture, the Export-Import Bank is an excellent place to begin building it. EXIM is not a new or untested institution. It has operated since 1934, through the Second World War, the Cold War, multiple recessions, and repeated reauthorization battles. It has maintained underwriting discipline and bipartisan credibility for nearly a century. It has built institutional relationships with private sector co-investors, international counterparties, and congressional oversight committees that cannot be easily or quickly replicated by a new agency that is stood up from scratch. In a competition with China, speed is of the essence.
EXIM is already evolving. The Make More in America Initiative (MMIA) permits the Bank to finance domestic manufacturing in critical export industries for the first time, a significant expansion of its traditional export credit mandate. Project Vault demonstrates that EXIM can operate at strategic scale. Bipartisan legislation has been introduced signaling appetite for a ten-year reauthorization with substantially expanded capacity.20 The question before Congress is not whether to reauthorize the Bank. Rather, it is whether reauthorization comes with the structural reforms that make expanded capacity effective and enhance America’s competitiveness in critical industries.
The United States is an outlier among advanced economies in how constrained its strategic capital tools are. Germany’s KfW, the world’s largest national development bank, deploys hundreds of billions of euros through government-guaranteed bonds and recently launched the Deutschlandfonds; its goal is to deploy €30 billion in public capital and mobilize €100 billion in private sector money.21 Japan’s JBIC and South Korea’s Korea Development Bank have financed their countries’ industrial modernization for decades, and both are now central to the investment partnerships those countries have negotiated with the United States.22 As Peter Harrell recently documented in these pages, the global industrial development toolkit—policy banks, development finance institutions, sovereign wealth funds—is well established and widely used by American allies.23 Rather than doing something entirely novel, the United States can equip an existing, trusted institution with the same capabilities that allies and competitors already possess, leveling the playing field and advancing our national security interests.
A fair question arises: why EXIM specifically, rather than the Department of Energy’s Office of Energy Dominance Financing (formerly known as the Loan Programs Office), the Development Finance Corporation, the Department of Defense’s Office of Strategic Capital, or a purpose-built national development bank?
EXIM has one advantage the alternatives do not: breadth of sectoral mandate. The LPO is energy-focused. The DFC is oriented toward international development. The Office of Strategic Capital specializes in defense. EXIM, with the MMIA expansion, would be the only federal institution with domestic manufacturing finance authority spanning the full range of strategic sectors, from critical minerals to shipbuilding to biotechnology to advanced computing. Combined with its existing institutional infrastructure and a legislative forcing function in the form of its December 2026 authorization expiration, EXIM is the natural starting point.
But the argument is not that it must be EXIM and only EXIM. If Congress determined that a different institutional home were more appropriate, the design principles outlined here would apply equally. What matters is that the capabilities exist somewhere: flexible instruments, adequate risk-bearing capacity, strategic sector focus, disciplined evaluation, and coordination across the federal investment toolkit. EXIM is the institution best positioned to absorb these capabilities now. But it is not the only possible answer, nor does it need to be.
Reform Proposals for Empowering EXIM
The aim of strategic capital is straightforward: to nourish and grow industries that are critical to national security and economic competitiveness but that private capital is not well positioned to finance on its own. Government would not replace private investment. It occupies the specific positions in the capital structure that private investors cannot fill, and in doing so, it catalyzes private capital at much greater scale than public commitments. The measure of success is not only what the government earns on its investment; it is how much total capital flows into strategic sectors as a result.
This principle has a corollary that is equally important: the instrument must match the problem. You do not deploy equity when debt suffices. You do not take a first-loss position when the private sector is already willing to invest. Every deployment of public capital should be the minimum intervention necessary to unlock the private capital that should follow.
This discipline, which we call “instrument matching,” is what separates strategic capital from indiscriminate subsidy. The relevant distinction goes beyond the question of whether public capital confers an advantage (it, of course, does); it is whether the intervention is targeted at a defined market failure, catalytic in its structure, designed to withdraw once the failure is resolved, and measured against strategic outcomes rather than political convenience.
EXIM’s current authorities prevent it from practicing in this manner. The Bank’s existing toolkit, while broad, is essentially limited to instruments that support only the demand side of the equation, such as senior debt and buyer loan guarantees. When the problem calls for subordinated risk absorption, patient equity, or first-loss catalytic structures to support production, EXIM cannot respond.
Several specific reforms would close this gap. First, the Make More in America Initiative should be given statutory permanence and scale. MMIA already permits EXIM to finance domestic manufacturing. But it needs a clear legislative mandate, a target of at least 30 percent of the Bank’s portfolio dedicated to eligible transactions, and an investment roadmap aligned with the China and Transformational Exports Program’s strategic industries—expanded to include critical minerals, shipbuilding, robotics, drones, advanced batteries, and advanced energy systems.24
Borrowers should be required to make good faith declarations of American jobs created, subject to Bank due diligence, with employment impact reported at the portfolio level annually to the Banking Committee. This captures the full downstream effect of strategic investments—for example, a critical minerals plant that directly employs 150 workers but secures tens of thousands of downstream manufacturing jobs—rather than gating individual transactions to a formula that cannot capture full value across the supply chain.
Second, EXIM should be authorized to take catalytic positions in the capital structure. The most valuable role government can play is often not in providing the largest commitment but the most catalytic one. The MP Materials deal demonstrates this: a price floor that absorbs geopolitical risk unlocked billions in private coinvestment. To replicate this at scale, Section 2(j) of the Bank Charter—the non-subordination clause—should be removed, enabling first-loss guarantees, subordinated positions, and other structures in which the government absorbs a defined layer of risk to crowd in private capital above it.
This authority is directly linked to default rate reform. First-loss positions will, by design, absorb losses before private co-investors do. A Bank constrained to 2 percent portfolio losses cannot meaningfully deploy these instruments. The two reforms are a mutually reinforcing system.
Third, the Bank’s risk-bearing capacity must match its mandate through a tiered default rate architecture that separates traditional export credit from strategic investment. EXIM currently freezes all lending if portfolio defaults exceed 2 percent. This constraint was designed for conventional export credit, i.e., financing the sale of American goods to creditworthy foreign buyers. It has no relationship to the risk profile of strategic industrial investment.
The International Finance Corporation, the World Bank’s private sector development finance arm and the closest institutional comparator to what EXIM is being asked to become, has operated at a long-term average default rate of roughly 4 percent across nearly four decades of lending, with peaks exceeding 10 percent during periods of global economic stress.25 The IFC is widely regarded as one of the best managed development finance institutions in the world. If the United States is tasking EXIM with the deployment of strategic capital—and it already is, through Project Vault and MMIA—then its risk tolerance should reflect the precedent set by institutions that have done this successfully for generations.
The solution is not a single higher threshold applied uniformly across the Bank’s entire book. It is a tiered architecture with separate risk budgets for separate missions. Routine export credit (such as financing the sale of American aircraft or agricultural equipment to creditworthy foreign buyers) should continue to operate under a 4 percent default rate ceiling, moderately higher than the current 2 percent but still within conventional prudential standards.
The MMIA portfolio—strategic capital deployments into contested sectors with higher risk profiles—requires a separate risk budget with a 10 percent ceiling calibrated to its mission. And early-stage technology funds, which by their nature will experience higher loss rates than either conventional lending or scale-up financing, require their own accounting with an appropriate loss threshold.
Each portfolio would be tracked and reported independently by the Bank’s Chief Risk Officer, ensuring that strategic risk-taking in one book does not contaminate prudential standards in another. The three tiers can coexist within the same institution, as they do at development finance institutions worldwide. But the current 2 percent ceiling, applied without distinction to all three, is not a standard of prudence. It is a constraint that forces a strategic institution to behave as though it has no strategic mandate at all.
Fourth, the Bank should be authorized to capitalize independent earlystage technology funds with their own risk budget and separate accounting. An independently managed fund structure, authorized and overseen by EXIM but operated by professionals with early-stage investment expertise, could bridge the gap between laboratory-stage innovation and the commercial scale-up financing that EXIM and private co-investors can provide at later stages. EXIM’s role would be to create and capitalize such vehicles—not to manage them directly.
This is not a peripheral concern. It is the gap where the United States most consistently loses its technological edge. A123 Systems did not fail because the technology was flawed but because no institutional mechanism existed to sustain an American company through the years between a working prototype and a commercially viable industry. An early-stage fund, embedded within the strategic capital architecture and reporting to Congress on capital flows, technology progress, and gaps in the national innovation pipeline, would give the United States the institutional capacity to keep the next wave of critical technologies from following the same path.
These funds should be accounted for separately from both the traditional export credit portfolio and the MMIA book. A dedicated loss threshold, reflecting the reality that early-stage investing produces higher failure rates but also the breakthrough technologies that create entire industries, ensures that the Bank can take appropriate risk without jeopardizing its core lending operations. EXIM does not have to turn into a venture capital firm, but steps should be taken to ensure that the full commercialization and scale-up pipeline, from laboratory to factory floor, has institutional support at every stage where private capital falls short.
Fifth, the Bank should have access to a full range of instruments. This includes equity where appropriate, along with other transaction authorities, with accountability provisions that protect the taxpayer’s position. Some strategic investments require government to take the measures necessary to establish an ownership position: standing up entirely new domestic capacity in a sector dominated by foreign competitors, rebuilding an industrial base that has atrophied below minimum viable scale, or signaling permanent commitment to anchor long-term private co-investment.
This is more than a hypothetical proposal. L3Harris received a convertible preferred security. Project Vault includes an equity component. Other legislative efforts are proposing authorities along this vein. For instance, the secure Minerals Act proposes allowing EXIM to make equity investments in critical minerals through a new Strategic Resilience Reserve Corporation, but it requires five of seven board members to approve and for equity to be demonstrated as the most appropriate instrument for the specific transaction.26
Ensuring Accountability and Coordination
Equity authority must be paired with accountability provisions. The Bank should be authorized to impose covenants, clawback provisions, performance-based funding conditions, anti-dilution protections, and information rights as conditions of any investment—even under non-voting investor status. Non-voting does not mean unprotected. The MP Materials deal demonstrates what well-structured accountability could look like: production obligations through the offtake agreement, upside sharing through the price floor’s contract-for-difference structure, and profit splits above the ebitda guarantee. These mechanisms ensure that public capital comes with performance expectations and that taxpayers participate in success. The Bank should have explicit authority to employ all of them.
Every transaction should demonstrate that the chosen instrument is the most appropriate for the specific market failure being addressed. Rigorous analysis should assess economic benefits to producers and consumers, impact on strategic vulnerabilities, projected private capital mobilization, and expected financial performance. The Bank should report on capital mobilization (how much private investment each dollar of public capital unlocked) alongside strategic capacity created: reporting should be grounded in measurable outputs, such as tons of processing capacity, production volumes, and supply chain nodes secured.
Financial returns should be tracked and reported honestly, but the benchmark for a strategic capital institution is mission achievement at reasonable cost, not maximizing returns on a mark-to-market basis. A program that earns 4 percent while securing critical supply chains is more successful than one earning 8 percent while crowding out private investment in sectors the market would fund anyway.
This accountability framework will enable an expanded EXIM to endure across administrations. It is intended to be flexible and ambitious while still requiring transparent selection criteria and rigorous evaluation. Conservatives ask: how do we prevent waste? Liberals ask: how do we ensure public benefit? The answer to both questions is the same set of institutional disciplines.
EXIM is not being reformed in isolation. Congress already has efforts underway to expand strategic investment authorities across multiple agencies and legislative vehicles. Alongside the equity authority for critical minerals proposed by the secure Minerals Act, the dominance Act would create the Energy Security Compacts, which would coordinate federal tools across the Departments of State, Energy, Commerce, and the Development Finance Corporation.27
The Office of Strategic Capital (OSC), the Loan Programs Office (LPO), and the Small Business Innovation Research (SBIR) program each carry their own investment mandates, some overlapping with EXIM’s expanded scope. The Pentagon’s prospective establishment of a dedicated investment office (the Economic Defense Unit) staffed by Wall Street professionals underscores the appetite for institutional capacity; the question is whether that capacity will be governed by the kind of statutory framework that makes it durable. Industry participants have signaled clear interest in common application processes and clearer institutional points of entry.
If the United States is equipping multiple agencies with expanded strategic investment authorities across overlapping sectors, coordination is not simply an additional bureaucratic layer. Without it, agencies deploy capital into the same strategic sectors under different mandates, different evaluation criteria, and different reporting frameworks—producing duplication, conflicting signals to industry, and wasted resources. The reactive, deal-by-deal approach that characterizes the current moment is partly a symptom of this absence: no institution has the mandate to identify where strategic capital should flow, determine which agency is best positioned to provide it, and specify with what instrument.
The practical requirements are straightforward: an investment committee that develops a strategic roadmap aligned with existing frameworks such as the National Security Strategy, a mechanism for deconfliction across agencies deploying capital into the same sectors, domain-specific working groups that bring relevant expertise from across the federal government, and clearer entry points for industry participants navigating a fragmented federal landscape. EXIM, with its expanded mandate and broad sectoral reach, can play a meaningful role in this coordination. But the argument is not that EXIM must chair or control the process. What matters is that the function exists—that the agencies being equipped with new tools are pulling in the same direction, and that the reauthorization is the natural legislative moment to establish it.
And the design principles that make EXIM effective—instrument matching, transparent evaluation, catalytic positioning in the capital structure, disciplined accountability—should not be confined to one institution. They constitute a replicable model for strategic capital deployment across the federal government. What works for EXIM can and should inform parallel reforms at the Office of Strategic Capital, the Loan Programs Office, and the Development Finance Corporation. The reauthorization is step one. It need not be the last.
Beyond Improvisation
The Export-Import Bank’s authorization expires in December 2026. Bipartisan support for reauthorization exists. The administration is already stretching the Bank’s mandate to meet strategic needs that its original design never contemplated. Industry wants a more capable, more predictable institutional partner. And international peers—with established development banks, coordinated investment strategies, and no hesitation about deploying sovereign capital—are not waiting for the United States to organize itself.
The reforms outlined here are concrete, achievable, and grounded in the precedent of institutions that have deployed strategic capital effectively for decades. They do not require inventing new concepts. They require the political will to expand and modernize an institution that has earned bipartisan trust over ninety years with the authorities the historical moment now demands.
The alternative is continued improvisation. Individual deals negotiated ad hoc (using whatever authorities happen to be available and producing results that cannot be scaled) will not sustain political support across administrations. Moreover, this approach cannot match the coordinated, patient, and strategic capital deployment of competitors and allies alike.
Otherwise, the battery parable will repeat itself across yet more critical sectors: American technologies invented in our laboratories are commercialized by our competitors and dominated by foreign firms with the state backing to see them through.
The United States does not lack capital, technology, or motivated workers. What it lacks is the strategic capital architecture to connect them; the Export-Import Bank’s reauthorization is an opportunity to begin building it.
This article originally appeared in American Affairs Volume X, Number 2 (Summer 2026): 188–98.
Notes
1 The lithium iron phosphate (LFP) cathode was developed by John Goodenough and colleagues at the University of Texas at Austin in the mid-1990s. Goodenough received the Nobel Prize in Chemistry in 2019 for his foundational work on lithium-ion batteries.
2 A123 Systems received a $249 million grant from the U.S. Department of Energy in 2010 and opened what was then the largest lithium-ion battery manufacturing facility in North America in Livonia, Michigan. The company filed for bankruptcy in October 2012. See: Gabrielle Coppola, “America’s Long, Tortured Journey to Build EV Batteries,” Bloomberg, June 8, 2023.
3 Wanxiang Group acquired A123 Systems out of bankruptcy in January 2013. See: “Wanxiang Wins U.S. Government Approval to Buy Battery Maker A123,” Renewable Energy World, January 30, 2013.
4 China’s EV battery subsidies began with the “Ten Cities, Thousand Vehicles” pilot program in 2009. Made in China 2025 designated advanced batteries as a strategic priority. See: Madeline Craig-Scheckman and Scott Moore, “Battling for Batteries: Li-ion Policy and Supply Chain Dynamics in the U.S. and China,” Kleinman Center for Energy Policy, University of Pennsylvania, October 28, 2025; U.S.-China Economic and Security Review Commission, 2025 Report to Congress (Washington, D.C.: U.S. Government Publishing Office, 2025).
5 CATL was founded in 2011, became the world’s largest battery producer by sales in 2017, holding approximately 38 percent global market share as of 2024. See: Sebastian Schaal, “SNE Research: CATL Continues to Dominate Global Battery Market,” April 2, 2026.
6 China was responsible for nearly 80 percent of global EV battery cell production in 2024 and an even higher share of battery component manufacturing. See: IEA staff, Global EV Outlook 2025 (Paris: International Energy Agency, 2025).
7 This is based on 2025 BYD sales of 4.6 million BEVs and plug-in hybrids and Tesla sales of 1.6 million cars. See: Dan Mihalascu, “China’s BYD Overtakes Ford in Global Sales for the First Time,” Yahoo Finance, February 12, 2026. See: “Tesla Fourth Quarter 2025 Production, Deliveries & Deployments,” Business Wire, January 2, 2026.
8 U.S. Geological Survey, Mineral Commodity Summaries 2025 (Washington, D.C.: U.S. Department of the Interior, 2025); IEA staff, Critical Minerals Market Review 2025 (Paris: International Energy Agency, 2025).
9 U.S. Government Accountability Office, Solid Rocket Motors DOD and Industry Are Addressing Challenges to Minimize Supply Concerns, GAO-18-45 (Washington, D.C.: U.S. Government Accountability Office, October 2017).
10 IFR staff, World Robotics 2025 Report (Frankfurt am Main: International Federation of Robotics, 2025).
11 “Chinese Pharma Is on the Cusp of Going Global,” Economist, November 23, 2025. Chinese companies ran nearly a third of the planet’s clinical trials in 2024, up from 5 percent a decade earlier. According to the World Health Organization’s International Clinical Trials Registry Platform, China listed 7,100 clinical trials in 2024 versus six thousand for the United States. See also: Meghan Ostertag, “Fact of the Week: China Has Surpassed the US in the Number of Drug Clinical Trials,” Information Technology & Innovation Foundation, June 9, 2025. On API imports, see: “Drug Shortages: Root Causes and Potential Solutions,” U.S. Food and Drug Administration, March 11, 2020.
12 Jennifer Wong et al., “ASPI’s Critical Technology Tracker: 2025 Updates and 10 New Technologies,” Australian Strategic Policy Institute, December 1, 2025; Richard Baldwin, “China Is the World’s Sole Manufacturing Power: A Line Sketch of the Rise,” cepr, January 17, 2024.
13 The broader auto sector—including manufacturing, dealerships, suppliers, and related services—supports approximately 10.95 million American jobs. See: “Driving the U.S. Economy,” Alliance for Automotive Innovation, accessed April 2026.
14 In September 2010, China restricted rare earth exports to Japan during a territorial dispute over the Senkaku/Diaoyu Islands, demonstrating that supply chain dominance could be weaponized as a geopolitical tool. The incident prompted Japan and other nations to accelerate efforts to diversify rare earth supply chains. See: Keith Bradsher, “Amid Tension, China Blocks Vital Exports to Japan,” New York Times, September 22, 2010.
15 “MP Materials Special Event Investor Presentation—A Transformational Public Private Partnership,” MP Materials, July 10, 2025; “MP Materials Announces Pricing of Upsized $650 Million Public Offering,” MP Materials, July 17, 2025; Spencer Kimball, “Energy Pentagon to Become Largest Shareholder in Rare Earth Miner MP Materials; Shares Surge 50%,” CNBC, July 10, 2025; “Apple Expands U.S. Supply Chain with $500 Million Commitment to American Rare Earths Magnets,” Apple, July 15, 2025.
16 SpaceNews, “Pentagon Commits $1 Billion to L3Harris Missile Unit as Anchor Investor,” January 13, 2026. Kubasik made these remarks during an investor conference call following the announcement of the Pentagon partnership.
17 Gerry Doyle, Jen Judson, and Brooke Sutherland, “Pentagon to Invest $1 Billion in L3Harris Missile Unit,” Bloomberg, January 13, 2026.
18 “Trump Announces Creation of Critical Mineral Reserve,” Reuters, February 2, 2026; Gracelin Baskaran, “Project Vault: A Minerals Security Backstop,” Center for Strategic and International Studies, February 11, 2026.
19 Alice Wu, “Unpacking the Department of Defense and MP Materials Critical Minerals Partnership,” Federation of American Scientists, July 15, 2025. DoD’s FY26 budget request for the DPA Fund is $266 million; the estimated annual price floor obligations for MP Materials alone are approximately $300 million at current market prices (~$60/kg vs. $110/kg floor).
20 Aime Williams and Lauren Fedor, “Senators Push $70bn Funding Deal to Support Donald Trump’s Critical Minerals Agenda,” Financial Times, February 4, 2026.
21 KfW staff, Financial Report 2024: Enabling Growth (Frankfurt am Main: KfW Bankengruppe, 2024); Kamil Kowalcze and Petra Sorge, “Germany Launches Fund to Draw 100 Billion in Private Capital,” Bloomberg, December 18, 2025.
22 “Continuous Evolution of JBIC’s Role,” Japan Bank for International Cooperation, accessed April 2026; “Chronology,” Korea Development Bank, accessed April 2026.
23 Peter E. Harrell, “The Global Industrial Development Toolkit: Unpacking Trump’s Investment Deals with Japan and South Korea,” American Affairs 10, no. 1 (Spring 2026): 12–24.
24 Shayerah I. Akhtar, Export-Import Bank: New Domestic Financing Initiative, IN11940 (Washington, D.C.: Congressional Research Service, 2025).
25 World Bank Group, IFC Portfolio Default Rates and Loss Given Defaults (Washington, D.C.: World Bank Group, 2024). Long-term default rate of 4.1 percent for FY86–FY23; peaks of 11.5 percent (FY86) and 10.3 percent (FY03).
26 “secure Minerals Act Section-by-Section,” Office of Representative Rob Wittman, accessed April 2026; U.S. Congress, House, secure Minerals Act of 2026, H.R. 7126, 119th Cong., 2nd sess., introduced in House January 15, 2026.
27 U.S. Congress, House, Developing Overseas Mineral Investments and New Allied Networks for Critical Energies Act (dominance Act), H.R. 7037, 119th Cong., 2nd sess., introduced in House January 13, 2026.
