Export controls, sanctions, industrial and military integration in the Indo-Pacific to deter China and secure critical supply chains

The U.S.-led coalition’s Indo-Pacific strategy for 2028–2029 continues to evolve into a highly integrated, multilateral campaign focused on export controls, sanctions, and military-industrial collaboration designed to firmly deter China’s coercive ambitions and secure critical global supply chains. Recent developments underscore deepening allied coordination, expanded technology restrictions, and broadening strategic partnerships—particularly highlighted by new diplomatic engagements and military-technical integration with South Korea and Canada, alongside intensified enforcement and innovative compliance mechanisms.

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Escalated Export Controls and Sanctions: Sharpening the Technological Noose on China

Export controls and sanctions remain the linchpin of coalition efforts to deny China access to advanced dual-use and military technologies, with regulatory frameworks and enforcement actions entering unprecedented territory in scale and sophistication:

• Broadened Technical Restrictions:
  Controls have recently expanded to cover next-generation AI accelerators and semiconductor manufacturing equipment vital for China’s military-civil fusion initiatives. The explicit inclusion of autonomous military platforms such as Boeing’s MQ-28 Ghost Bat stealth drone highlights a targeted approach to curtail China’s capabilities in maritime and aerospace domains.

• Critical Minerals and Energy Supply Security:
  The emergency authority under the Defense Production Act now governs an extended list of minerals critical for defense and technology sectors, including copper, cobalt, lithium, and rare earth elements. Centrus Energy’s ongoing $3.8 billion nuclear fuel backlog exemplifies allied commitment to severing reliance on Russian and Chinese sources, ensuring energy security for naval propulsion and civilian power needs.

• Entity List and Precision Sanctions Expansion:
  Over 150 Chinese firms and research bodies are now restricted under EAR Part 744, focusing on semiconductor fabs, AI research institutes, quantum computing ventures, and military-affiliated entities. A notable development is the U.S. Department of State’s sanctions on individuals and organizations involved in intellectual property theft, marking an unprecedented crackdown on illicit technology transfers fueling China’s military modernization.

• Record-Breaking Enforcement Actions:
  Enforcement has intensified with historic penalties such as the $252.5 million fine levied against Applied Materials for export violations. Investigations into Taiwan Semiconductor Manufacturing Company (TSMC) for unauthorized chip exports signal potential fines surpassing $1 billion. Allied partners have mirrored these efforts:

  • The Netherlands and Germany have enhanced scrutiny and imposed financial penalties on China-linked companies in their jurisdictions.
  • Canada and the United Kingdom have synchronized sanctions enforcement to disrupt illicit Russian export networks and crypto-enabled evasion schemes.
  • OFAC’s designation of the Russian cyber exploit broker Operation Zero further integrates cyber and export control sanctions into a cohesive enforcement regime.

• Legal and Policy Adaptations Following IEEPA Ruling:
  The 2028 Supreme Court ruling limiting executive tariff authority under IEEPA has prompted a phased withdrawal of certain emergency tariffs. However, the administration is offsetting this through strengthened legislative efforts and diplomatic engagements. Transparency initiatives such as OFAC’s proposed sanctions removal portal and voluntary self-disclosure systems are fostering enhanced corporate compliance and enforcement agility.

• Corporate Compliance Innovation:
  Leading multinational firms are adopting AI-powered analytics to monitor export compliance in real time, identifying diversion risks within complex global supply chains. Integration of export controls into Environmental, Social, and Governance (ESG) frameworks further aligns corporate responsibility with national security imperatives.

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Enhanced Allied Military-Technical Integration: AUKUS Expansion and Multilateral Synergies

A landmark development in 2028 is the formal expansion of AUKUS to include South Korea, significantly broadening allied capacity in undersea warfare, unmanned systems, and interoperability across the Indo-Pacific:

• South Korea’s Strategic Inclusion:
  South Korea’s advanced shipbuilding capabilities and growing political support for nuclear submarine programs bolster AUKUS’s maritime deterrence posture. Integration of Boeing’s MQ-28 Ghost Bat stealth drones into allied operational frameworks enhances multi-domain maritime awareness, cyber-electronic warfare, and rapid response capabilities.

• Multilateral Exercises and Forward Basing:
  Deepening interoperability is demonstrated through intensified joint exercises such as U.S.-India Operation Sindoor 2026 and expanded U.S.-Taiwan cyber and missile development collaborations. The redeployment of USS Dewey to the region and significant security upgrades in the Philippines—including missile system deployments, transfer of a Reliance-class cutter, and the commissioning of the Philippines’ first domestically built warship—strengthen regional maritime surveillance and anti-submarine warfare (ASW) readiness.

• Trilateral Missile Alliance:
  Reinforced joint training and missile interoperability among the U.S., Taiwan, and the Philippines send a clear signal of strategic resolve in countering China’s growing missile capabilities.

• Projected Indo-Pacific Force Posture:
  By 2035, approximately 300 F-35 stealth fighters are expected to be deployed throughout the region, supported by cyber-hardened command-and-control networks designed to maintain contested air superiority in increasingly complex threat environments.

• Expanded Engagement with Indonesia and Canada:
  Indonesia’s evolving role as a forward logistics hub continues to grow, with infrastructure investments and joint exercises enhancing coalition interoperability. Concurrently, diplomatic engagements between Canada and South Korea, exemplified by recent ministerial visits to Ottawa, have reinforced bilateral cooperation in trade, technology, and defense alignment—further tightening the multilateral fabric underpinning Indo-Pacific security.

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Trade and Economic-Statecraft: Diversification, Legal Recalibration, and Strategic Partnerships

Trade policy remains central to reducing dependency on China and ensuring resilient supply chains through diversified partnerships and legal adaptation:

• Strategic Trade Agreements:
  The U.S.–Taiwan Reciprocal Trade Agreement (RTA) has expanded market access, especially benefiting semiconductor and agricultural sectors, thereby reinforcing Taiwan’s critical role in allied defense supply chains. The U.S.–India Strategic Trade Framework, valued at approximately $44 billion, accelerates collaboration in aerospace, energy, and defense industries. New trade accords with Bangladesh and Argentina diversify critical mineral, textile, and dairy sourcing despite ongoing governance challenges.

• Tariff Policy Evolution Post-IEEPA:
  In response to the Supreme Court’s ruling, the White House is managing a calibrated phase-out of select emergency tariffs while emphasizing legislative and diplomatic tools to maintain economic leverage without fracturing alliance cohesion.

• Targeted Tariffs and Ongoing Trade Disputes:
  The Office of the U.S. Trade Representative (USTR) continues to enforce strategic tariffs on steel and aluminum to strengthen the defense industrial base. Meanwhile, the U.S. has appealed a WTO ruling critical of its clean energy subsidies, underscoring persistent trade-policy complexities in balancing economic and security objectives.

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Multilateral Resource and Energy Diplomacy: Securing Critical Supplies for the Future

Securing reliable access to critical minerals and energy resources remains a top priority for sustaining allied technological superiority and deterrence:

• Critical Mineral Diversification Efforts:
  Coalition initiatives in Africa and Latin America focus on copper, rare earth elements, and battery materials, deliberately excluding Chinese industrial actors to undermine Beijing’s resource dominance.

• Strategic Stockpiles and Supply Controls:
  The Department of Commerce's Bureau of Industry and Security maintains readiness to invoke emergency controls on copper supplies. Centrus Energy’s substantial nuclear fuel backlog exemplifies strategic efforts to secure energy independence for naval and civilian applications.

• Ministerial and Multilateral Cooperation:
  Recent ministerial meetings involving Japan, the United Kingdom, Argentina, Colombia, Ecuador, El Salvador, and Bangladesh have advanced mineral processing, supply chain security, and cyber defense cooperation under the Tokyo-London partnership framework.

• Indo-Pacific Energy Security Ministerial:
  Convened in March 2028 by President Trump’s National Energy Dominance Council in Tokyo, this ministerial produced commitments to reduce dependence on Russian LNG and enhance resilient energy supply chains via coordinated whole-of-government strategies.

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Space and Satellite Communications: Fortifying Command-and-Control in the Final Frontier

A transformative dimension of allied integration is the large-scale space and satellite collaboration underpinning resilient command-and-control (C2) and intelligence-sharing capabilities:

• $45 Billion Starlink Partnership:
  The Pentagon’s engagement in Elon Musk’s SpaceX-led Starlink project with Australia marks a leap forward in regional connectivity. This secure, low-latency satellite broadband network is critical for joint military operations, ISR (intelligence, surveillance, reconnaissance), cyber operations, and real-time intelligence sharing throughout the Indo-Pacific.

• Technological Edge and Resilience:
  This partnership complements terrestrial military-technical integration and export control frameworks, enhancing allied advantages over China’s expanding space and anti-satellite weapon capabilities.

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Conclusion: A Cohesive, Adaptive Framework for Indo-Pacific Stability

The coalition’s intensified export controls, sanctions, military-technical integration, and economic-statecraft now constitute a strategically unified, adaptive campaign to deter China’s coercive maneuvers and uphold a rules-based Indo-Pacific order. The historic inclusion of South Korea into AUKUS, enhanced interoperability with India, Taiwan, and the Philippines, expanded forward basing in Indonesia and the Philippines, and pioneering space partnerships collectively reinforce a resilient, multidomain deterrence architecture.

Supported by vigorous congressional oversight, innovative corporate compliance, and transatlantic diplomatic engagement—including recently strengthened Canada–South Korea ties—this comprehensive framework positions the coalition to maintain technological leadership, disrupt illicit proliferation networks, and secure critical supply chains amid an increasingly contested geopolitical landscape.

As challenges evolve, coalition unity and technological innovation remain paramount to sustaining Indo-Pacific security and ensuring preparedness for future contingencies.