Former Commerce Official: US Races Against Time to Reclaim Supply Chain from China

January 19, 2025 TruthUSA

“Picture a U.S. economy devoid of manufacturing,” cautions former Trump official Nazak Nikakhtar, following China’s imposition of export controls on industrial diamonds.

WASHINGTON—A former Department of Commerce official has recently called on American leaders and the public to heighten their urgency in addressing the risks associated with U.S. supply chain dependence on communist China.

“Time is of the essence. We must act swiftly to resolve this issue,” Nazak Nikakhtar, who served as assistant secretary for Industry and Analysis during the first Trump administration, stated in a recent interview with EpochTV’s “American Thought Leaders,” arguing that the issue has been overlooked for “at least two decades.”

In her opinion, the concern arises from the intentional strategic measures taken by the Chinese communist government. She pointed out that Beijing has engaged in unfair trade tactics for years—oftentimes incentivizing subsidiaries to saturate the global market with inexpensive made-in-China goods that others cannot compete with, thus seizing control of specific supply chains and moving on to undermine the next industry.

While the American public is familiar with China’s supremacy in producing steel, batteries, solar cells, and personal protective equipment—largely due to tariffs instituted during the Trump and Biden administrations—its domination in the production of lab-grown industrial diamonds remains critical yet lesser known.

These diamonds are vital for cutting tools essential in construction, drilling, and manufacturing processes. The industries impacted range from automotive to aerospace and defense. According to the U.S. Geological Survey (USGS), China accounts for 95 percent of the globe’s synthetic diamond production, with U.S. reliance on imports fluctuating between 80 and 95 percent since 2018.

On December 3, China’s ruling Communist Party implemented a ban on the export of industrial diamonds to the United States, alongside gallium, germanium, and antimony—key materials for semiconductor fabrication. This announcement followed a day after the United States expanded export controls on advanced semiconductor manufacturing machinery and software to limit Beijing’s access to critical components for artificial intelligence development.

Diamonds for Industrial Power

Also known as “super hard materials,” industrial diamonds are integral to the “Made in China 2025” initiative, the Chinese communist regime’s ten-year industrial strategy aimed at establishing dominance in advanced manufacturing worldwide.

Since 2012, the Chinese government has categorized diamond manufacturing and related technology as “strategic new sectors.” Policies have been developed by both central and local authorities to promote these sectors, including the provision of subsidies.

Although precise figures remain undisclosed, sporadic Chinese media reports suggest that annual subsidies can range between 10 million yuan ($1.3 million) and 50 million yuan ($6.8 million) per firm.

“Picture a U.S. economy with no manufacturing,” Nikakhtar emphasized.

USGS data reveals that the U.S. does not maintain a stockpile of industrial diamonds, with domestic production in 2023 fulfilling only 16 percent of the total demand within the country.

“It’s time to wake up. China has clearly indicated its intentions. We must take them at their word,” she asserted. “China has demonstrated through its recent export restrictions that it is serious and possesses the capability to harm the U.S. economy.”

Over the last eight decades, Congress has granted extensive authority to the president for setting tariff rates. Various laws empower the chief executive to utilize tariffs as tools for foreign policy and national security protection.

During Nikakhtar’s time at the Commerce Department’s Bureau of Industry and Analysis, President Donald Trump invoked Section 232 of the Trade Expansion Act of 1962 in March 2018 to establish a 25 percent tariff on steel and a 10 percent tariff on aluminum from all nations except Canada and Mexico.

In October 2021, President Joe Biden struck a deal with the European Union and the United Kingdom, replacing the tariffs with quotas in exchange for lifting retaliatory tariffs on U.S. goods.

Trump also utilized Section 301 of the Trade Act of 1974 to introduce tariffs on Chinese imports valued at approximately $300 billion annually. The Biden administration maintained these tariffs and added additional duties last year after a comprehensive review conducted every four years.

As Trump prepares for his second term, Nikakhtar remarked that the new administration is “confident in how they’ve effectively utilized the innovative laws in the past” and will continue to leverage existing legal frameworks to impose tariffs aimed at rectifying market imbalances caused by unfair trade practices.

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