The Trump administration is making it a mission to restore the manufacturing might of the United States of America. That will have both civilian and military benefits.

“We are rebuilding our Nation with American heart, hands, and grit,” Donald Trump proclaimed in July. “We are bringing back a culture of boldness and creativity that will empower the next generation of innovators, unleash the full strength of the American spirit, and ensure our economy, our culture, and our way of life remain the envy of the world.”

It’s a challenge, but we know American companies are up to it. Consider just one, NanoGraf Corporation. The company was born out of Northwestern University’s Argonne Institute for Scientific and Engineering Excellence. It started as a metals company, but it went private to develop battery technology for things that move: think vehicles, radios, flashlights, and more.

NanoGraf shows that batteries have a shelf life beyond the EV industry and the taxpayer-funded subsidies that incentivized  EV production and generous tax credits for households to buy them. NanoGraf is also showing a better path forward: the goal isn’t always to build a bigger battery (one that can drive an entire car) but a better battery. Its proprietary metal-doped products have a high first-cycle efficiency and are inexpensive to build, using readily available raw materials.

It is worth noting that NanoGraf’s move into batteries wasn’t a coincidence. The military asked it to do so. The Army prefers to buy from domestic manufacturers, and NanoGraf has been focused on boosting American manufacturing in Chicago. 

The company also does assembly in Taiwan, a long-time and critical American ally, which I’m sure gets the attention of the Chinese Communist Party. Making things in Taiwan is far different from making them in mainland China, a fact that enrages the CCP. 

To fight back, China is doing what it always does: dumping minerals at low cost to drive competitors like NanoGraf out of business.

As Tim Porcelli, the vice president for business development at NanoGraf, told me, China is providing battery-grade graphite at below-cost prices, even while restricting exports of other rare-earth minerals. 

This is a familiar playbook, and all too often successful. Once China runs other countries out of business in an area (whether minerals, manufacturing, or refining), China can set prices artificially low. Wash, rinse, repeat, and we end up back where we began: China in the monopoly seat. 

The good news is that the Trump administration understands that our country needs a supply of raw materials and finished products from a country that isn’t spelled: C-H-I-N-A. But the old way of doing things is no longer sufficient.

For years, the military’s standard operating procedure has been to play venture capitalist, providing seed funding for innovative products, in the hopes that they become commercially viable for the military to buy later. This approach can lead to research success but not necessarily commercial success. Innovations can get caught in the commercial “valley of death,” where good ideas can die on the vine.  

Rather than a technology-push approach, where the military seeds technology development with taxpayer-funded investments in the hopes that they pay off, the military could instead offer contracts for breakthrough technologies in areas where it needs them most. This would provide the initial market pull for American companies to innovate, without picking winners and losers or letting precious taxpayer resources go to waste. It would also better ensure that public spending goes toward legitimate national security needs rather than policies that have weak national security justifications – like the Renewable Fuel Standard. 

For instance, if the military demanded better batteries for mobility – which is exactly what it needs – and offered contracts for successful breakthroughs, then NanoGraf could secure the commercial financing it needs to expand its manufacturing and deliver what it needs to the military. NanoGraf alone could meet 30 percent of the US military’s needs by next year and could soon scale to 90 percent of the total market.

If we want to build in America, then a subsidies arms race with China won’t work. We’ve got to throw out the standard operating procedure playbook. Less picking winners and losers, particularly with tax credits for mature technologies, and having the government try to play venture capitalist, and more letting the market do what the market does best. Companies like NanoGraf will rise to the challenge faster than you can imagine. Just give them the chance. The winners will be American manufacturing and taxpayers, and the loser will be the Chinese Communist Party. 

Now that’s picking winners and losers that I can support.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.