A new report by the Silverado Policy Accelerator warns that the United States is becoming increasingly dependent on China for critical display technology used in smartphones, televisions, and military systems. The report argues that targeted tariffs could help reduce this reliance and strengthen supply chain security.
Why display technology matters
Digital displays are essential components in both consumer electronics and defence equipment. At the centre of these displays are key components known as cells, which determine performance and quality. While final assembly often takes place in countries such as Mexico or Thailand, many of these cells are produced in China.
Growing Chinese dominance
China’s share of the global display cell market is increasing due to lower production costs. The report warns that Chinese manufacturers could control up to 75 percent of the market within a few years. This growth is already putting pressure on producers in countries such as Japan and Taiwan, leading to factory closures and reduced competition.
National security concerns
US officials are concerned that reliance on Chinese components could become a strategic vulnerability in the event of a conflict. Disruptions to supply chains or export restrictions could limit access to essential parts used in defence systems and critical infrastructure.
In response, Donald Trump has previously supported legislation requiring the Pentagon to reduce dependence on adversary countries for critical technologies by 2027.
Tariffs as a policy option
The report suggests using trade tools such as tariffs under Section 301 investigations to target Chinese made display components, even when they are included in finished products. The aim would be to encourage companies to diversify supply chains and support alternative suppliers.
Challenges and risks
However, tariffs could also increase costs for consumers and businesses. Shifting supply chains away from China would take time and require significant investment. There is also the risk of retaliation from China, which could further escalate trade tensions.
Analysis
The proposal reflects a broader shift in US policy, where supply chains for advanced technologies are increasingly viewed as a matter of national security. Although display components are part of everyday consumer products, they also play a role in defence systems, making them strategically important.
Tariffs may help reduce dependence on China, but they are not a complete solution. Building resilient alternative supply chains will require long term investment, industrial policy, and cooperation with allied countries.
Overall, the issue highlights the challenge the US faces in balancing economic efficiency with national security in a highly interconnected global technology market.
With information from Reuters.
