The global liberal economic order has operated on the assumption that nations could stretch supply lines across the world to maximize efficiency and profit with little to no risk. And yet that belief led to some baffling choices. A shocking share of goods essential to U.S. national security are produced almost entirely in China, including antibiotics and components used in American military hardware.
00:00:30.000On September 17th, 2024, thousands of pagers and walkie-talkies
00:00:34.560exploded in the hands and pockets of alleged Hezbollah operatives across Lebanon and Syria.
00:00:41.000Intelligence sources believe that the Israeli government carried out the operation
00:00:45.140in retaliation for the terrorist attacks committed on October 7th, 2023.
00:00:50.740Israeli agents reportedly intercepted the devices, manufactured overseas,
00:00:55.140and modified their batteries to include small amounts of explosives.
00:00:58.980However one feels about this novel form of retaliation,
00:01:03.040it serves as an explosive reminder of how critical a country's supply lines are to national security.
00:01:09.740For decades, the global liberal economic order has operated on the assumption that nations could
00:01:15.140stretch supply lines across the world to maximize efficiency and profit with little to no risk.
00:01:21.140Leonard Reed's classic essay, I Pencil, illustrated the idea, celebrating how no single person or country could manufacture a pencil alone.
00:01:30.920It highlighted how markets, when left to coordinate production across borders, could reach extraordinary levels of efficiency.
00:01:37.780If global trade remained stable and secure, national self-sufficiency seemed unnecessary.
00:01:44.180Countries could rely on the global market to supply even critical goods, so long as the U.S. Navy kept shipping lanes open.
00:01:50.840Under Pax Americana, the thinking went,
00:01:53.280The global trade system rested on the assumption that American military dominance would continue indefinitely.
00:02:07.100That belief led to some baffling choices.
00:02:09.640A shocking share of goods essential to U.S. national security are produced almost entirely in China,
00:02:17.040including antibiotics and components used in American military hardware.
00:02:21.980The idea that a country would rely on semiconductors from its primary geopolitical rival to launch a missile defies basic strategic logic.
00:02:31.680And yet that is exactly what the United States has done.
00:02:34.420Defense contractors have prioritized profit, operating under the assumption that global trade is both reliable and free from political risk.
00:02:43.740While this approach carries serious risks, the COVID-19 pandemic exposed its full recklessness.
00:02:51.200Fears of contagion and widespread labor shortages disrupted global trade, causing economic shocks and widespread shortages of consumer goods.
00:02:59.460More urgently, the pandemic revealed that critical medical supplies, such as ventilators, were largely manufactured in China, where the virus originated.
00:03:09.120Despite this wake-up call, the United States has yet to reassure production of many essential medicines.
00:03:14.460Yet we still rely heavily on China for antibiotics and other critical pharmaceuticals.
00:03:19.280The pandemic and Israel's pager attack made one thing clear.
00:03:23.180The era of supply chains divorced from security concerns is over, if it ever truly existed in the first place.
00:03:30.840When I found out my friend got a great deal on a designer dress from Winners, I started wondering,
00:03:36.540is every fabulous item I see from Winners?
00:03:39.680Like that woman over there with the Italian leather handbag.
00:04:01.180The global liberal economic order operated on the assumption that American dominance would go unchallenged.
00:04:08.220Under that model, it seemed economically irrational for any country to sabotage goods that it sold to the United States.
00:04:14.940Nations believed that they could depend entirely on foreign production because the reach of American power would keep economic exchanges politically neutral.
00:04:25.160But Israel didn't manufacture the pagers that wound up in the hands of Hezbollah operatives.
00:04:30.580It simply accessed the supply chain and modified those devices.
00:04:34.340These weren't weapons or advanced military systems.
00:04:38.060By tapping into the logistics of basic consumer electronics, Israel was able to inflict serious damage on its enemies.
00:04:46.540This illustrates the core vulnerability of today's trade model.
00:04:51.280Donald Trump has long argued that Americans are getting a raw deal in the current global economic system.
00:04:57.620While the United States has embraced free trade, many of our allies, including the United Kingdom, Canada, and Israel, have maintained protective tariffs.
00:05:07.840Meanwhile, China has benefited from open access to U.S. markets despite its use of centralized planning, currency manipulation, and widespread intellectual property theft.
00:05:19.220Trump has made it clear that his goal is to reverse this imbalance.
00:05:23.540For both economic and national security reasons, he intends to use tariffs to secure better trade agreements and bring as much manufacturing as possible back to the United States.
00:05:35.200Some disgruntled mainstream conservatives, particularly at publications like the National Review, have joined leftist politicians and media voices in sounding the alarm over efforts to build an economic order that prioritizes U.S. interests.
00:05:50.400For many neoconservatives, free trade has become a kind of orthodoxy.
00:05:56.120They treat economic predictability, even within a broken system, as more important than restoring national sovereignty.
00:06:04.100Never-Trump conservatives often dismiss the president's trade agenda as outdated or uninformed.
00:06:10.760They mock his focus on reviving the American middle class.
00:06:14.360Among the D.C. elite, working and middle class Americans from flyover states are often treated as relics of the past, easily replaced by foreign labor in a gig-based service economy.
00:06:26.920But Trump understands that re-industrialization is more than just an economic policy.