Top four pressing issues for the U.S. Space Industry this year

1. Vulnerabilities in the supply chain and international collaboration

A global leader in space and governmental investment in dedicated programmes, the United States is like the Queen in chess: as the strongest piece on the board, it could change the space game. International agencies and commercial operators are closely watching the new administration’s actions for potential disruptions and strategy shifts.

During his previous term, President Trump was highly regarded by the U.S. space community for his consistent efforts to support the industry and enhance its competitiveness. But his recent statements have alarmed the sector. The U.S. President announced the imposition of 25% tariffs on imports from Mexico and Canada and a 10% tariff on imports of Chinese-made goods. These measures have now been paused on Canada and Mexico, causing uncertainty in the market. The U.S. President also stated that tariffs will likely hit the European Union. What impact will this have on the international space industry? Could this be an opportunity for the American ecosystem? 

A recent article written by John Wensveen, President of the International Space University, highlights that the new measures “may increase costs across the space sector’s value chain” from “raw materials like rare earth elements to high-precision components for rockets and spacecrafts”. On February 2, the Aerospace Industries Association (AIA) published a press release stating: “Decades-long trade agreements enabled robust civil aviation and defense trade that resulted in a sky-rocketing positive trade balance over the last 40 years, making aerospace and defense the largest American exporting industry. Tariffs on Canada and Mexico could change that positive trajectory. We hope to work with the Trump Administration to find a path forward to protect this critical industry, which is a strategic asset to both our economy and our national security”. 

It is important to highlight that the focus should extend beyond addressing supply chain issues in the second presidency of Donald Trump, and instead tackle challenges that predate his administration, especially in the defense and security arenas. Military and intelligence’s surging demand for small satellites has strained the supply chain, and lingering effects of COVID-19 are evident in accumulated supplier delays that have affected the sector, including the SDA’s megaconstellation of missile warning and data transport satellites. Major challenges also include access to key components and critical minerals, the diversification of suppliers in the military and defense industries, and shortages of optical communication terminals, encryption devices, propulsion systems and solid rocket motors.  

Space leaders are also weighing on the influence that the new U.S. administration will have on international collaboration. Anticipatory fears already surfaced during Space Tech Expo Europe’s show in Bremen in November 2024, as Space News reported, which saw European leaders sharing concerns about the future of international collaboration. The industry will be particularly keen to observe the developments surrounding NASA’s Space Launch System, NASA’s Artemis Program, and the post-ISS era.  

2. The future of the commercial industry

Although the U.S. commercial space ecosystem is diverse and robust, many operators are facing financial challenges and are struggling to find both private and governmental buyers. Among the main barriers to their success are: access to funding, inconsistent funding stream, lengthy acquisition processes, stringent regulations, limited demand and market volatility.

With a new administration in office, 2025 presents an opportunity to reassess the commercial sector's role in both civil and defense applications. The private sector provides invaluable technologies and strategies to support the U.S. government, and the military and intelligence sectors, in various areas including exploration, Earth observation, national security, and in-space servicing, assembly, and manufacturing. Without government support, the U.S. risks falling behind other space players. 

“The U.S. government once again must transition to become a consumer of commercial space goods and services so that America’s space industry outpaces its adversaries”, highlighted Charles Beames, chairman of several leading space companies and an active investor, in a 2021 article published by Forbes. Four years later, industry leaders are still questioning how to secure government support, whether funding will materialize and how to maintain a stable funding stream. In its 2024 report titled “Gold Rush”, the Center for Strategic & International Studies encouraged the military and the government to purchase more commercial remote sensing data to avoid falling behind China, and, as reported by Space News back in September, industry executives called on the DoD to increase commercial funding in defense programmes. 

3. Countering geopolitical, power, and space threats

The current geopolitical situation poses significant challenges to national security, infrastructure on Earth, and governmental and commercial space assets. In August 2024, Space News reported that the U.S. Army is preparing for a “new era of space-based warfare”.

Major concerns arise from the Russian invasion of Ukraine, NATO-Russia relations, tensions in the Indo-Pacific, and uncertainty surrounding the new Syrian government. Despite a long-awaited ceasefire that was recently reached between Israel and Hamas with the support of the United States and Qatar, the Israeli-Palestinian conflict remains a key concern.  

Equally alarming for national security is the economic and power competition with China, expected to strengthen the head-to-head quest for space supremacy. The Trump 2.0 administration is projected to dedicate more attention, and potentially more resources, to counter China’s capabilities.  

Beyond Earth, the situation is equally problematic. Last year, the U.S. claimed that Russia is developing an anti-satellite (ASAT) nuclear weapon. The ASAT system would be able to destabilize the low-Earth orbit, damaging or destroying its satellites. Following the accusation, which Russia denied, Moscow vetoed a United Nations Security Council resolution calling on all states to prevent an arms race in outer space.  

Countering adversaries in space will require more focus and investment in space domain awareness, artificial intelligence, and in technologies preventing jamming and cyber-attacks, enabling laser data transmission and hypersonic missile threat detection. U.S. military and intelligence space branches have reaffirmed their interest in high-altitude platforms, alternatives to GPS, tactical lasers, real-time intelligence, sensor satellites, and orbital transfer vehicles. 

Under the new administration, it will be interesting for the industry to see if President Trump follows through on his promise to create a Space National Guard, and to monitor developments surrounding the missile defense shield “Iron Dome for America”. 

4. To the Moon, or not to the Moon, that is the question 

Commercial operators are looking closely at the future of U.S. exploration, and the direction that this might take now that Elon Musk is involved in the new administration, leading the new advisory body, the Department of Government Efficiency. Many scientists and experts believe we should utilize the Moon as a training ground to prepare for sending humans to the Red Planet. Part of NASA’s plan, approved by Congress in 2021, sees the return to the Moon as an opportunity to understand how to live on another celestial body. During a 2023 episode of “The Late Show” with Stephen Colbert, the crew of NASA’s Artemis II moon mission, Victor Glover, Reid Wiseman, Christina Koch and Jeremy Hansen reiterated this view: we are going back to the Moon to go to Mars. But on January 23, 2025, Elon Musk shared on X: “No, we’re going straight to Mars. The Moon is a distraction”, prompting a wave of both supportive and critical comments, with many asking whether he meant to achieve this with SpaceX, or with NASA’s programmes.  

During his previous administration, President Trump supported Artemis. In 2017, he signed Space Policy Directive 1 to enable a human return to the Moon, which would eventually lead to the exploration of Mars. The current situation remains unclear. During his second inauguration ceremony, Trump revealed his plans “to plant the stars and stripes on the planet Mars.” Regardless of whether the exploration pathway undergoes a change, the decisions will need to pass through Congress. As Politico underlines in its recent article, “Republican and Democratic lawmakers, who control NASA’s purse strings, want Americans to return to the lunar surface in 2027 — and they’re not willing to abandon that mission despite Musk’s obsession with skipping the moon for Mars”. 

Space Tech Expo USA spoke with one of its most trusted sources and was told that “getting Congress to change its space priorities and to appropriate even more funding for the Mars mission, as government spending is being cut, will be a major challenge”. In the meantime, the New York Times reported that “there are already signs that the new administration is planning major changes to Artemis”.

 
This blog post was published on February 6, 2025