By Terri Wu and Jan Jekielek via The Epoch Times (emphasis on us),
A former Department of Commerce official recently urged American officials and the public to embrace a heightened sense of urgency to address the threat posed by the U.S. supply chain’s dependence on Communist China.
“We’re running out of time. We really have to race to solve it,” Nazak Nikakhtar, a former assistant secretary of industry and analytics during Trump’s first administration, recently told EpochTV’s “American Thought Leaders” show, adding that the problem has been “overlooked for at least two decades.”
In his opinion, this issue stems from the deliberate strategic actions of the Chinese communist regime. He said Beijing has been engaged in unfair trading practices for years — often paying subsidiaries to flood the global market with cheap Chinese-made products that others can’t compete with, thereby gaining control of the industry’s supply chain and moving on to the next downfall.
Compared to China’s dominance in the production of steel, batteries, solar cells, and personal protective equipment — all of which the American public is aware of because of the tariffs imposed during the Trump and Biden administrations — China’s dominance in the production of laboratory-grown industrial diamonds is just as critical but less well-known.
These diamonds are essential for cutting tools – crucial for construction, drilling and production. The industries affected range from cars to aviation and defense. According to the U.S. Geological Survey (USGS), China produces 95 percent of the world’s synthetic diamonds, and U.S. dependence on imports has fluctuated between 80 and 95 percent since 2018.
On December 3, China’s ruling Communist Party banned the export of industrial diamonds to the United States, along with gallium, germanium, and antimony — critical materials for the manufacture of semiconductors. The decision was announced a day after the United States added advanced semiconductor manufacturing equipment and software to its export controls to limit Beijing’s access to these critical elements of AI development.
Diamonds for industrial energy
Industrial diamonds, also called “ultra-hard materials”, are part of the Chinese communist regime’s ten-year industrial policy of “Made in China 2025”, which aims to achieve dominance in high-tech manufacturing around the world.
Since 2012, the regime has classified the production of diamonds and related equipment as “strategic new sectors”. Central and local authorities developed a policy that promoted these enterprises and provided subsidies.
While the specific amounts are unclear, random Chinese media reports have revealed annual subsidies ranging from 10 million yuan ($1.3 million) to 50 million yuan ($6.8 million) per company.
“Imagine a U.S. economy where production is zero,” Nikakhtar warned.
USGS data shows that the nation lacks a stockpile of industrial diamonds, and in 2023, the estimated domestic production of diamonds matched only 16 percent of the total volume needed in the United States.
“It’s just time to wake up. China has made it clear that it is moving in this direction. We have to take them according to their word,” he said. “China has already shown us through its recent export controls that this means business and really has the ability to harm the U.S. economy.”
Over the past eight decades, Congress has delegated extensive authority to the president to set tariff rates. Some laws allow the American CEO to use tariffs to establish foreign policy and protect national security interests.
During Nikakhtar’s tenure in the Department of Commerce’s Office of Industry and Analysis, President Donald Trump relied on Section 232 of the Trade Expansion Act of 1962 in March 2018 to impose a 25 percent tariff on steel and a 10 percent tax on aluminum from all countries except Canada and Mexico.
In October 2021, President Joe Biden reached an agreement with the European Union and the United Kingdom and replaced tariffs with quotas in exchange for the lifting of tariffs on retaliatory measures on U.S. exports.
Trump also used Section 301 of the 1974 Trade Act to impose tariffs on Chinese imports worth about $300 billion a year. The Biden administration retained all responsibilities and added more last year after a four-yearly review.
As Trump begins his second term, Nikakhtar announced that the new administration would be “very confident in how they have used novel laws in the past” and will continue to use existing legal mechanisms to implement tariffs to correct market distortions caused by unfair commercial practices.
