The Small Business Administration (SBA) wants to enlist domestic companies to help rebuild entire industrial ecosystems lost to decades of corporate and DC-interests in services, innovation, and IP instead of manufacturing. The U.S. is still great at inventing things, but mass production of those inventions has migrated to Asia. Within Asia, the bulk of it is all in China. In a new world where the rising power (China) is challenging the old one (U.S.), offshoring key portions of critical supply chains is an economic vulnerability. Like the rest of the government, the SBA recognizes this vulnerability as a national security risk.
The SBA’s initiative lines up with other trade and industrial policies, including the ‘Inflation Reduction Act’ bringing investment in EV battery manufacturing to the U.S. Every major EV battery producer is Asian. It aligns with the Department of War and Department of Energy’s Critical Minerals and Materials Program; the Export-Import Bank’s Project Vault, and existing tariff frameworks led by the Section 232 sectoral tariffs.
The government increasingly sees critical minerals, battery materials and components, and refining as strategic industrial assets rather than low value goods often burdened by environmental regulations.
SBA is trying to insert small businesses into critical industrial ecosystems. They are in the early stages of designing what they defined as “near-term initiatives intended to strengthen domestic manufacturing capacity for critical components, subcomponents, materials, tooling, and specialized capabilities essential to economic resilience and national security.”
U.S. based battery manufacturers, led by French multinational Clarios, responded to SBA’s Request For Information (RFI) from market participants on where to take this initiative currently in its incubation stage. Clarios and other members of the Responsible Battery Coalition (RBC) submitted comments regarding the SBA’s “Scaling Critical Suppliers in Domestic Supply Chains” (91 FR 23523).
In their comments, RBC said that domestic small businesses and solution providers in the midstream sector of any particular market are often “capital-short” at the transition point between research and commercial deployment. They said near-term operational milestones for the SBA should be aligned with other critical minerals programs at the Executive Branch level. Aligning them with those departments’ project solicitation windows, so companies have the time to demonstrate their capabilities and prepare the required technical documentation to win these coveted government contracts.
Within a 90-day execution window, several measurable milestones can be achieved by small businesses, with SBA grants or other forms of support, to accelerate production capacity. RBC suggested the following in their letter:
Component Procurement and Long-Lead Item Ordering: Small businesses can initiate the procurement of specialized process equipment, such as modular chemical reactors or automated separators, which often have 12-18 month lead times but require immediate capital for down payments.
Pilot Plant Commissioning and Metallurgical Testing: For projects like the recovery of critical minerals from mine tailings, a 1-3 month window allows for the initial commissioning of modular pilot units and the completion of site-specific metallurgical validation.
Producibility Assessments and Manufacturing Plans: Utilizing Department of War-standard producibility assessment worksheets, small businesses can finalize manufacturing plans that identify key characteristics and process capabilities, preparing them for rapid throughput expansion.
Workforce Onboarding and Safety Training: Scaling requires the immediate recruitment of skilled technicians. Within three months, a firm can establish specialized training programs for chemical handling and environmental safety compliance.
Certification and Qualification Submissions: Small businesses can finalize submissions for federal or commercial quality certifications (e.g., mil-spec antimony trisulfide), which are prerequisites for securing long-term offtake agreements.
These milestones are currently hindered primarily by the lack of flexible, “compressed-window” capital that SBA prize money or grants could provide.
SBA prize competitions and financing tools are especially well-positioned to support these transitions for companies, especially when small business applicants are paired with partnerships through national laboratories and federal testing facilities.
The Battery Supply Chain Example
The U.S. battery supply chain is best understood through a stages-of-control framework that delineates the value-added steps from raw material extraction, processing, manufacturing of the final product, to end-of-life recycling. Security within this supply chain is determined not merely by access to raw materials dug out of the ground, but by the ability to transform that ore into battery-grade chemicals and engineered inputs. The U.S. is seriously lacking in that department and must rely on imports.
Minerals such as antimony, lithium, nickel, cobalt, and manganese are found in many countries and some can be mined off the ocean floor, but the refining and chemical conversion of that rock is highly concentrated in China. CPA warned in a report published in March that this concentration creates a chokepoint at the midstream stage, allowing foreign state-backed entities to exercise “gray-zone” economic coercion – utilizing non-market policies, overcapacity, and export controls to manipulate pricing and availability. As of 2024, the United States was 100% net-import reliant for 12 critical minerals and over 50% reliant for another 29.
Restoring domestic midstream capacity – mostly on the refining side – is constrained by more than just technological readiness; it is also a question of cost and profitability. Small businesses tied to the critical minerals economy are going to face unmatched infrastructure in China. That makes it hard for the U.S. to build a true critical minerals infrastructure.
The same can often be said about other segments of the economy that Washington is worried about. The U.S. makes a lot of solar panels today, but the solar cells that go into those panels are mostly imported from Asia. One of the most consistent sources of America’s monthly goods deficit is pharmaceuticals. Active pharmaceutical ingredients (API) and the key starting materials used to make them are mostly imported from India and China. The U.S. lab can come up with new drugs, but over time, the drug is offshored. And when made here, the API is often offshored and turned into pill or tablet form here in the U.S., rendering yet another hole in an important sector of the economy. This is not the case for Chinese economic sectors deemed critical and globally strategic, like renewable energy tech. Here, China tends to be more “soup to nuts” than anywhere else.
In their letter to the SBA, the RBC said small businesses pursuing critical mineral refining, recycling, and processing projects frequently lack the staffing, consortium relationships, and grant development infrastructure necessary to compete effectively for large federal funding opportunities. The SBA should support the creation of consortium-based partnerships that connect small businesses with universities, industrial end-users and allied financing partners to improve access to federal funding programs. Especially if it is serious about bringing smaller companies into Washington’s reindustrialization efforts.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
Government Seeks To Enlist Small Business Involved In Critical Supply Chains
The Small Business Administration (SBA) wants to enlist domestic companies to help rebuild entire industrial ecosystems lost to decades of corporate and DC-interests in services, innovation, and IP instead of manufacturing. The U.S. is still great at inventing things, but mass production of those inventions has migrated to Asia. Within Asia, the bulk of it is all in China. In a new world where the rising power (China) is challenging the old one (U.S.), offshoring key portions of critical supply chains is an economic vulnerability. Like the rest of the government, the SBA recognizes this vulnerability as a national security risk.
The SBA’s initiative lines up with other trade and industrial policies, including the ‘Inflation Reduction Act’ bringing investment in EV battery manufacturing to the U.S. Every major EV battery producer is Asian. It aligns with the Department of War and Department of Energy’s Critical Minerals and Materials Program; the Export-Import Bank’s Project Vault, and existing tariff frameworks led by the Section 232 sectoral tariffs.
The government increasingly sees critical minerals, battery materials and components, and refining as strategic industrial assets rather than low value goods often burdened by environmental regulations.
SBA is trying to insert small businesses into critical industrial ecosystems. They are in the early stages of designing what they defined as “near-term initiatives intended to strengthen domestic manufacturing capacity for critical components, subcomponents, materials, tooling, and specialized capabilities essential to economic resilience and national security.”
U.S. based battery manufacturers, led by French multinational Clarios, responded to SBA’s Request For Information (RFI) from market participants on where to take this initiative currently in its incubation stage. Clarios and other members of the Responsible Battery Coalition (RBC) submitted comments regarding the SBA’s “Scaling Critical Suppliers in Domestic Supply Chains” (91 FR 23523).
In their comments, RBC said that domestic small businesses and solution providers in the midstream sector of any particular market are often “capital-short” at the transition point between research and commercial deployment. They said near-term operational milestones for the SBA should be aligned with other critical minerals programs at the Executive Branch level. Aligning them with those departments’ project solicitation windows, so companies have the time to demonstrate their capabilities and prepare the required technical documentation to win these coveted government contracts.
Within a 90-day execution window, several measurable milestones can be achieved by small businesses, with SBA grants or other forms of support, to accelerate production capacity. RBC suggested the following in their letter:
These milestones are currently hindered primarily by the lack of flexible, “compressed-window” capital that SBA prize money or grants could provide.
SBA prize competitions and financing tools are especially well-positioned to support these transitions for companies, especially when small business applicants are paired with partnerships through national laboratories and federal testing facilities.
The Battery Supply Chain Example
The U.S. battery supply chain is best understood through a stages-of-control framework that delineates the value-added steps from raw material extraction, processing, manufacturing of the final product, to end-of-life recycling. Security within this supply chain is determined not merely by access to raw materials dug out of the ground, but by the ability to transform that ore into battery-grade chemicals and engineered inputs. The U.S. is seriously lacking in that department and must rely on imports.
Minerals such as antimony, lithium, nickel, cobalt, and manganese are found in many countries and some can be mined off the ocean floor, but the refining and chemical conversion of that rock is highly concentrated in China. CPA warned in a report published in March that this concentration creates a chokepoint at the midstream stage, allowing foreign state-backed entities to exercise “gray-zone” economic coercion – utilizing non-market policies, overcapacity, and export controls to manipulate pricing and availability. As of 2024, the United States was 100% net-import reliant for 12 critical minerals and over 50% reliant for another 29.
Restoring domestic midstream capacity – mostly on the refining side – is constrained by more than just technological readiness; it is also a question of cost and profitability. Small businesses tied to the critical minerals economy are going to face unmatched infrastructure in China. That makes it hard for the U.S. to build a true critical minerals infrastructure.
The same can often be said about other segments of the economy that Washington is worried about. The U.S. makes a lot of solar panels today, but the solar cells that go into those panels are mostly imported from Asia. One of the most consistent sources of America’s monthly goods deficit is pharmaceuticals. Active pharmaceutical ingredients (API) and the key starting materials used to make them are mostly imported from India and China. The U.S. lab can come up with new drugs, but over time, the drug is offshored. And when made here, the API is often offshored and turned into pill or tablet form here in the U.S., rendering yet another hole in an important sector of the economy. This is not the case for Chinese economic sectors deemed critical and globally strategic, like renewable energy tech. Here, China tends to be more “soup to nuts” than anywhere else.
In their letter to the SBA, the RBC said small businesses pursuing critical mineral refining, recycling, and processing projects frequently lack the staffing, consortium relationships, and grant development infrastructure necessary to compete effectively for large federal funding opportunities. The SBA should support the creation of consortium-based partnerships that connect small businesses with universities, industrial end-users and allied financing partners to improve access to federal funding programs. Especially if it is serious about bringing smaller companies into Washington’s reindustrialization efforts.
The RBC’s full letter can be found here.
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CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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