By Jose Navarro, MBA
Last week, President Trump and Chinese President Xi Jinping met in Washington, and Reuters reported that Xi planned to press for an end to American arms sales to Taiwan. In the same stretch, a smaller story surfaced that deserves more attention than it has received: sensitive components of America’s most advanced fighter jet appear to be in Chinese government hands, and no one has yet explained how they got there.
What Is Known
Politico reported on September 18 that a shipment of unserviceable F-35 components, sent from Australia to the United States for repair, was diverted to Hong Kong in late May. Bloomberg later reported that the Chinese government took possession of the parts, which reportedly include a cockpit canopy and a weapons-bay door coated with radar-absorbing material, and has not returned them. Australia confirmed its role in the shipment on September 22, and at least two congressional committees are now reviewing the matter.
Important details remain unsettled. Officials have not said whether the diversion was deliberate or a mistake. Australia’s defense minister, Richard Marles, has described it as a mistaken diversion and said his understanding is that the parts are not sensitive. The Pentagon’s F-35 Joint Program Office says it is working to retrieve the components, investigate the incident, and put safeguards in place. Those statements deserve fair weight, and the facts may prove less alarming than the headlines suggest. Still, analysts note that Beijing has long sought F-35 data, which makes the question of custody essential rather than academic.
A Question of Custody
In government contracting, the first question after any loss is simple: who was responsible for the item at each handoff? Here, the answer is divided. The Defense Department owns F-35 spare parts until they are installed on an aircraft. Lockheed Martin manages the global supply chain and maintains the records. A commercial carrier, reported to be UPS, moved this shipment. Lockheed says the Defense Department set the transportation parameters and that it selects carriers meeting them. UPS reportedly disclosed the incident to the State Department office that enforces export controls. One person familiar with the incident told Bloomberg the aircraft stopped in South Korea before the parts reached Hong Kong; why remains unexplained.
Each of those statements may be entirely accurate. That is precisely the problem. When ownership, record-keeping, and physical custody sit with three different parties, an auditor’s first finding is a control gap, and gaps like that are where accountability quietly disappears.
A Weakness Already on the Record
This is not the first warning. In 2023, the Government Accountability Office reported that more than one million F-35 spare parts, worth at least $85 million, had been lost over roughly five years. The GAO found that the program office did not track these parts in an accountable property system of record, and it could not review losses worth tens of millions of dollars because Lockheed controlled the information. The program office agreed with the recommendations to improve tracking and said it knows where the vast majority of spare parts are.
In fairness, $85 million is small against a program expected to cost roughly $1.7 trillion over its life. But in financial controls, materiality is not measured only in dollars. A system that cannot reliably account for spare parts will struggle to demonstrate, in real time, where a stealth canopy is. The stakes are practical as well as strategic: a separate GAO report this year found that sustainment costs keep rising while aircraft performance has trended down, and spare-parts shortages frequently keep the jet grounded.
Questions for Oversight
This should not be a partisan issue. The program spans multiple administrations and Congresses of both parties, and its tracking weaknesses predate the current one. Nothing here requires assuming bad faith by anyone; it requires only the discipline auditors apply to any inventory of value. Four explicit questions would serve any lawmaker seeking to mitigate the risk:
- Why does the government rely on a contractor’s books, rather than its own real-time inventory, for parts it owns?
- Should components containing restricted stealth technology travel under sealed, route-locked custody, with immediate alerts for any unplanned stop or reroute?
- The diversion occurred in late May, and briefings for congressional staff began in June, yet the public learned of it in September. What should the roughly twenty countries that fly the jet be told, and when?
- Will independent physical counts be reconciled against contractor records and reported to Congress?
The Trump-Xi summit produced announcements and headlines. Whether any commitment proves meaningful depends on enforcement, and enforcement lives in unglamorous places: shipping manifests, property records, and custody logs. The F-35 shipment is a reminder that a nation’s technological edge is only as secure as the paperwork behind it.
Jose Navarro, MBA, is a financial controller and public finance analyst with 20+ years in public finance, nonprofit management, and government contract compliance. He is the founder of The Navarro Report, based in San Diego.
Human-Directed AI Journalism: Topic selection, framing, and editorial decisions were directed by the author. AI tools assisted with research and drafting. All facts are drawn from published reporting and public records cited in the text.