The Stockpile Gap: How America Can Secure the Strategic Materials It Needs to Win
America’s stockpiles were built for an earlier era. Building resilience against coercion and preparing for the possibility of conflict will require larger reserves, smarter technology, and deeper coordination with industry and allies.
By experts and staff
- Published
Jonathan E. HillmanCFR ExpertSenior Fellow for Geoeconomics- Research Associate, Geoeconomics
The United States is stocking up. On February 2, President Donald Trump announced the creation of Project Vault, a $12 billion initiative meant “to ensure that American businesses and workers are never harmed by any shortage.” If the COVID-19 pandemic was a wakeup call about the fragility of global supply chains, China’s export controls on rare earths are a five-alarm siren that has not abated in Washington and capitals around the world. Adequately preparing for modern economic warfare and the prospect of armed conflict will require a broader approach to stockpiling. The United States should expand and modernize the National Defense Stockpile (NDS), establish a strategic resilience reserve (SRS) to meet commercial mineral needs, expand private sector collaboration through Project Vault, and explore plurilateral agreements to scale trusted sources of supply.
Taking Stock: A Brief History
Stockpiling is one of humanity’s oldest responses to uncertainty. Ancient civilizations stored grain to guard against famine, and biblical narratives recount saving during years of plenty to survive years of drought. Stockpiles of materiel have been a decisive factor in U.S. wars from the American Revolution to World War II. More recently, dwindling munitions stockpiles during the U.S. and Israeli military operation against Iran have raised concerns about the United States’ ability to respond to threats in Europe and the Pacific. Simply put, stockpiling means storing something that could become scarce or strategically valuable in the future.
Modern stockpiles come in many forms and serve a range of social, economic, and defense purposes. Plenty of nations stockpile non-defense related items that they view as important to social stability or as part of a price-stabilization mechanism. Switzerland stockpiles chocolate and coffee, Canada stockpiles butter, and China stockpiles pork. The United States stockpiled raisins until the Supreme Court ruled against the practice in 2015.
The United States has three major stockpiles covering health, oil, and defense—each with a distinct purse and set of authorities.
The United States has three major stockpiles covering health, oil, and defense—each with a distinct purse and set of authorities. The Strategic National Stockpile (SNS), managed by the Department of Health and Human Services, holds medical countermeasures and public health supplies. The Strategic Petroleum Reserve (SPR), managed by the Department of Energy, holds crude oil for energy emergencies that can be used as a market-stabilization tool. The National Defense Stockpile (NDS), managed by the Defense Logistics Agency, serves a narrower mission: it holds materials strictly for military and essential civilian needs and can be deployed only during war or a declared national emergency. Unlike the SPR, the NDS is not designed to influence market prices.
The NDS is a fraction of its historical size and would provide only partial coverage during a conflict. Created by the Strategic and Critical Materials Stock Piling Act of 1939, the stockpile was tapped during WWII and the Korean War and grew to include more than ninety materials with a value of nearly $24 billion (adjusted for inflation) in 1990. After the Cold War, however, policymakers concluded that large-scale industrial war was unlikely, and the stockpile was reduced dramatically, declining to $1.3 billion as of March 2023.
Shrinking the NDS seems foolish in retrospect. In 2023, when the NDS contained just $912 million of stockpiled material, the Congressional Research Service found the NDS would cover less than half of defense production needs during a conflict, less than 10 percent of essential civilian demand shortfalls, and only 6 percent of total net shortfalls in “base case” national emergency scenarios, which assumes one year of active combat and three years of post-conflict industrial replenishment. Recognizing those vulnerabilities, U.S. policymakers are exploring ways of rebuilding the NDS as well as new measures to serve the broader economy.
The most recent response to those gaps is Project Vault, a public-private initiative announced by the Trump administration in February 2026 to stockpile key critical minerals for American companies and protect against supply-chain disruptions.
The most recent response to those gaps is Project Vault, a public-private initiative announced by the Trump administration in February 2026 to stockpile key critical minerals for American companies and protect against supply-chain disruptions. The stockpile focuses on rare earth elements as well as aluminum, antimony, copper, germanium, silver, and zirconium. Companies make long-term financial commitments to fund the stockpiling of critical materials and pay a commitment fee akin to an insurance premium. Private commodity trading firms Hartree Partners, Mercuria, and Traxys will source materials and take a cut of the fees. The U.S. government will house the stockpiles. Firms can withdraw a set amount of minerals annually if they pay a pre-determined price to replenish their use. During supply-chain emergencies, firms can withdraw minerals with fewer restrictions. The U.S. Export-Import Bank is supporting the project with a $10 billion loan (its largest ever), and private investors are reportedly contributing nearly $2 billion more.
Senators Jeanne Shaheen (D-NH) and Todd Young (R-IN) have proposed creating a strategic resilience reserve to support the critical minerals market and ensure U.S. and allied access by stabilizing prices, promoting domestic and allied production, stockpiling, and forecasting future risks.
Senators Jeanne Shaheen (D-NH) and Todd Young (R-IN) have proposed creating a strategic resilience reserve to support the critical minerals market and ensure U.S. and allied access by stabilizing prices, promoting domestic and allied production, stockpiling, and forecasting future risks. The SRR could leverage several tools for the above, including setting up storage facilities, acquiring and selling critical minerals and materials through various financial mechanisms, lending and direct contracting with domestic and allied producers, and equity stakes. In addition, the reserve would establish divisions for data collection and risk and vulnerability analysis to better assess the critical minerals market and identify gaps in U.S. supply chains. Partner countries could also invest in the SRR and access stored minerals.
Five Challenges
Today’s push to modernize stockpiling is not new. In 1976, a national commission endorsed creating an economic stockpile with a broader mission than the NDS, similar in spirit to the strategic resilience reserve [PDF] proposed by Senators Shaheen and Young. In 1983, a Congressional Budget Office report [PDF] found the NDS was incomplete and encouraged a range of options, including intensifying research and development for critical materials. In 2008, a National Academy study warned of growing U.S. dependence on China and called for creating a new system to manage critical materials. Many of those concerns remain valid, as CFR’s Task Force on Economic Security highlighted.
Looking at the NDS, five challenges stand out.
- Industrial bottlenecks: The NDS focuses primarily on raw materials, but rapidly incorporating those materials into finished products can require industrial processes or capacity that the United States lacks. For example, the distinction between raw and refined materials is especially important for critical minerals and rare earths, for which the primary bottleneck is refining rather than mining. China controls 90 percent of global rare earths processing and 70 percent of mining. The U.S. manufacturing sector could include other similar bottlenecks that the NDS does not fully account for [PDF]. A key question is to what degree (and what ends) commercial capacity could be repurposed for defense uses. Policymakers may nostalgically recall American auto plants being retooled to churn out tanks and bombers during World War II, but it is far from clear that transformations of similar scale could be done today. If such gaps exist, the United States may need to stockpile components or finished goods, not just raw materials.
- Economic coercion: The NDS’s mission and associated authorities may be too narrow for modern economic warfare. The NDS is intended to supply U.S. military forces with critical inputs for a conflict, and in the event the United States is attacked, to provide for critical civilian infrastructure. It is not designed to respond to threats that fall short of war, or to serve as a stockpile for the broader U.S. economy. China’s export controls on rare earths are a prime example of a threat the NDS is not well-equipped to address. Private firms were not merely caught in the crossfire but were arguably the primary target. The president can release supplies from the NDS by declaring an emergency, but drawing down those stocks could leave the U.S. military exposed if other emergencies followed.
- Emerging technologies: Keeping the NDS current with emerging technologies is a persistent challenge. The scope has been broadened in recent years to include copper, silicon, silver, and other key minerals. But as always, there remains room for improvement. The CFR Task Force on Economic Security identified several important materials critical to artificial intelligence and quantum computing that the NDS does not yet cover. Quantum computing illustrates the difficulty: multiple competing approaches create uncertainty about which materials will matter most. Yet the quantities are small enough that the NDS could make several bets to cover its bases.
- Analytical gaps: The NDS planning platform appears significantly less sophisticated than today’s off-the-shelf technologies. Publicly available documentation suggests the NDS relies on manual input processes and relatively basic data. Harnessing modern software and artificial intelligence could allow NDS planners to integrate additional datasets, identify production bottlenecks, consider different pathways for emerging technologies, model contingencies short of war, and assess potential benefits of cooperative arrangements with partners.
- Geopolitical fragmentation: The NDS is a stockpile for U.S. needs, but it relies heavily on foreign sourcing. Foreign sources are classified as assured, reliable, or unreliable, and reliability is discounted based on a foreign source’s capability and willingness to provide material. This rational but simplified view of how politics and economics interact could overlook more creative solutions and opportunities for deeper cooperation with partners and allies. The NDS is itself a potential lever: as U.S. government-source of foreign procurement, it could be used to strengthen partner relationships and incentivize supply. Aligning the NDS with allied stockpiling efforts could also yield economies of scale and develop more trusted sources.
Recommendations
Given the scope of the challenges described above, the following recommendations extend beyond the NDS to include supporting actions that would significantly improve U.S. stockpiling of strategically important materials.
Establish a strategic resilience reserve to improve stockpiling and shore up critical minerals supplies. In addition to stockpiling, the SRR would have a variety of tools to facilitate critical minerals production, including acquisitions, contracting, equity stakes, and loans. The new divisions for data collection and risk analytics would mitigate existing data gaps and forecast future supply chain vulnerabilities for emerging technologies. The SRR’s mandate to support allied production and coinvestment would strengthen global supply chains and mobilize additional capital for domestic projects.
Expand Project Vault beyond critical minerals and create incentives for private-sector stockpiling. Project Vault is demonstrating the power of private-sector participation in stockpiling efforts. It should be expanded to address other strategically important areas, such as active pharmaceutical ingredients and key starting materials for drugs. In some cases, private stockpiling could be more effective than public stockpiling. Generally, the broader the commercial market is for a critical material, the more attractive a private solution becomes. The resulting advantages would include keeping materials closer to users and more geographically dispersed (as compared to centralized government stocks). The CFR Economic Security Task Force recommended pursuing this approach to address supply chain vulnerabilities in biotechnology.
Expand the NDS to secure high-risk materials for critical technologies. Many key materials are not stocked or only exist in trace amounts. The CFR Economic Security Task Force recommended that Congress appropriate an additional $2 billion to the NDS to stockpile materials essential for AI, quantum, and biotech infrastructure. The new appropriations would also support planning upgrades and other modernization measures detailed below.
Update the NDS planning platform and process to incorporate better supply chain data, analytics, accounting for production bottlenecks, and allied and partner capabilities. Data could also be enhanced through annual collection at the procurement level from the military services and private firms. Although the NDS relies on some classified inputs, commercially available software would likely greatly enhance its current capabilities, which appear to be constrained by a bespoke platform that has become antiquated despite gradual upgrades over the years.
Create a single list of critical materials and closely align the NDS with other industrial and resilience measures. The U.S. government lacks a single, authoritative list of strategically important materials for defense purposes and critical infrastructure. Without one, national security interventions risk overreach, fueling accusations of unfair market practices and wasting resources that would otherwise be spent on more important areas. An upgraded NDS planning process could generate this list, which would then inform a range of policy tools, from tax incentives and investments to Section 232 tariff measures.
Pursue plurilateral agreements to scale trusted sources of supply. The Trump administration has taken steps in this direction through bilateral arrangements, the State Department’s Pax Silica initiative, and the U.S. Trade Representative’s request for comments. Plurilateral agreements could help pool demand, coordinate investment, and accelerate secure supply chains in critical sectors, including by expanding Project Vault to foreign partners and allies.
True resilience requires integrating reserves with production capacity, supply chain visibility, and technological upgrades.
The Bottom Shelf
Stockpiling is one of history’s oldest responses to scarcity, but accumulating materials is no longer enough. True resilience requires integrating reserves with production capacity, supply chain visibility, and technological upgrades. Done well, an upgraded stockpiling system could identify critical bottlenecks, inform policy responses without overextending its mandate, and prevent economic coercion and shocks from escalating into crises.
The authors thank the participants of the Trade and Markets Working Group for their insights and feedback. The analysis and conclusions are the responsibility of the authors.