Cuts to space funding threaten U.S. ability to compete with China, experts say

The Trump administration’s recent cuts to domestic space institutions put the U.S. on the back foot when competing against China in the final frontier, some experts say, arguing that Washington should encourage investment in space technology to ensure security.

In a recent report, analysts at the Foundation for Defense of Democracies stressed that a well-funded space sector is essential for national security and financial stability. The analysts said China’s recent investments in the commercial space sector seek to “undermine American infrastructure” by “forcing firms to rely on Chinese infrastructure vulnerable to espionage.”

Beijing is also reportedly interested in militarizing space to facilitate precision ground strikes using satellite technology, the report notes. Analysts pointed to recent evidence that China has allegedly provided Moscow with satellite imagery to assist in airstrikes against targets in Ukraine.

China has steadily upgraded its investment in its commercial space sector since the start of the decade. In 2024, Beijing’s total investment in the commercial space sector reached over $2.1 billion, a 40% increase from the previous year.

The report comes as NASA faces massive funding cuts under the White House’s proposed 2026 budget. The budget would slash NASA’s funding by 24% and would cut space agency science programs by 47%.

NASA has also been without a permanent leader since President Trump took office. Kennedy Space Center Director Janet Petro served as NASA’s acting administrator for the first half of the year but has since been replaced by Transportation Secretary Sean Duffy.

Mr. Trump withdrew his original pick to lead the space agency, tech billionaire Jared Isaacman, back in May following a public feud with Elon Musk. However, the president renominated Mr. Isaacman on Tuesday.

The report lays out three major suggestions for how the Trump administration can adequately step up to China in the space sector. Notably, the White House should categorize space systems as “critical infrastructure” under National Security Memorandum 22.

“This designation, which will place space systems on the same footing as the terrestrial defense industrial base and the healthcare and public health sector, will ensure that the White House prioritizes space security concerns and provides more comprehensive protection for space systems,” the report reads. 

Analysts also call on the Federal Communications Commission to streamline licensing processes by adopting the proposed “licensing assembly line,” which claims to increase efficiency by simplifying the application and review process. 

Ultimately, the analysts said U.S. space institutions need to be adequately funded to ensure innovation and security procedures are not neglected.

“Without an effective Office of Space Commerce, satellites are at risk of collision; without a well-funded NASA, the government loses significant procurement clout and cedes its innovative edge,” the report reads. “And without space, America forgets its past in the process of losing its future.”