Foreign Dependency in Missile Supply Chain Creates National Security Risk

A January 2025 Government Accountability Office report (GAO-25-107283) found that the U.S. defense industrial base has critical dependencies on foreign suppliers for components used in missile systems, and that the Department of Defense lacks adequate visibility into the depth of these dependencies. The problem extends beyond the well-known reliance on Chinese rare earth elements for guidance system magnets and motor components; it includes specialty metals, advanced composites, propellant chemicals, and electronic components sourced from countries that could restrict supply during a conflict or geopolitical crisis. This matters because in a major conflict scenario -- precisely when missile production must surge -- the supply chains for the missiles themselves could be disrupted by the adversary the missiles are meant to deter. If China restricts rare earth exports during a Taiwan contingency, production of precision-guided munitions that depend on rare earth magnets for guidance systems would slow or halt. If European suppliers of specialty propellant chemicals are cut off by a broader conflict, solid rocket motor production faces the same bottleneck. The defense supply chain is only as strong as its most vulnerable link, and the GAO found that DOD does not systematically identify or mitigate these single points of failure. The problem is compounded by the opacity of modern supply chains. A prime contractor like Raytheon or Lockheed Martin may source a component from a U.S.-based Tier 1 supplier, who sources a subcomponent from a Tier 2 supplier in Europe, who sources a raw material from a Tier 3 supplier in China. The prime contractor often has no visibility below Tier 1, and the Department of Defense has even less. When a Tier 3 supplier in a potentially adversarial nation is the sole global source for a critical material, the entire missile production chain rests on a dependency that no one in the procurement system even knows about until it breaks. The structural cause is the globalization of manufacturing over the past three decades, driven by cost optimization rather than supply security. Defense procurement regulations reward the lowest-cost bid, which incentivizes contractors to source globally. The Berry Amendment and other domestic sourcing requirements cover some categories but are riddled with exceptions and do not extend deep into the supply chain. Efforts to reshore critical manufacturing face the reality that building domestic production capacity for specialty materials requires years of investment and a willingness to pay higher costs that the acquisition system penalizes. The GAO recommended that DOD take actions to address risks posed by foreign supplier dependence, but implementing these recommendations requires mapping supply chains to the sub-tier level, investing in domestic alternatives, and potentially accepting higher unit costs for missiles -- changes that conflict with budget pressure and the acquisition system's cost-optimization bias.