A policy analysis released this week argues that narrowly targeted tariffs on the small, chip-like components used inside digital display panels could be a tool to prevent the U.S. military from becoming dependent on Chinese suppliers for critical electronics parts.
The Silverado Policy Accelerator, chaired by cybersecurity entrepreneur Dmitri Alperovitch, highlights the display "cells" - distinct from finished panels - as the key element to scrutinize in supply-chain policy. The report contends that while displays are often assembled in locations such as Mexico or Thailand, many of those finished units incorporate cells manufactured in China.
National security observers have for years raised concerns about China uilding market share in displays, which are essential to both consumer devices and defense systems and were previously dominated by suppliers from U.S. allied economies such as Japan and Korea. The Silverado report emphasizes that the vulnerability lies deeper than the assembled screen: the cell itself is the critical ingredient that can determine sourcing risk.
According to the report, the bulk of high-end smartphones sold in the United States still rely on Korean-made cells. However, Chinese-made cells offer a lower-cost alternative and are already reshaping the competitive landscape. Silverado's analysis warns that Chinese cells could capture as much as 75% of global market share by 2028 and that this trend is contributing to factory closures in countries such as Japan and Taiwan.
"When we started looking at this, what we saw was another dashboard of flashing red emergency lights," the report quotes Sarah Stewart, a former U.S. trade official who leads the policy group, as saying. She added that the exposure extends to components powering the military, first responders, power plants and other elements of critical infrastructure.
The report points to legal mechanisms the executive branch could use to impose duties. It notes that many of the broader tariffs implemented under the previous administration were struck down by the U.S. Supreme Court, but that more narrowly tailored tariffs are still being pursued under specific statutes. Silverado suggests that display cells could be addressed through an ongoing "Section 301" investigation into unfair trade practices, which in practice could allow for tariffs on Chinese-made display cells even when they are embedded in finished goods.
Silverado argues that Section 301 provides the executive branch with flexibility to place burdens or restrictions on U.S. commerce as a means of addressing unfair trade practices. The report frames this option as a way to target the particular vulnerability represented by cells without necessarily broad-brushing entire categories of consumer products.
The analysis frames the issue as a present and evolving risk rather than a hypothetical future problem. It documents current dependencies in the supply chain, notes the competitive pressure introduced by lower-cost Chinese cells, and highlights specific legal routes for policymakers to consider. The report does not offer new legislation but instead directs attention to existing investigatory and tariff authorities as instruments that could be deployed to protect defense supply chains.
Observers and policymakers weighing the recommendation would be considering the implications for multiple sectors, including consumer electronics, defense procurement, semiconductor and display manufacturing, and global manufacturing footprints where assembly occurs outside China but relies on Chinese upstream inputs.
Summary: The Silverado Policy Accelerator recommends using targeted tariffs on display cells to reduce U.S. military reliance on China. The group warns Chinese-made cells, which are lower-cost and gaining share, could reach 75% of the global market by 2028 and are already driving factory closures in Japan and Taiwan. The report points to Section 301 and other statutory tools as possible mechanisms to impose duties on Chinese cells even when incorporated in finished goods.