A New Pacific Trade Highway

Foundation for Economic Education ^ | Friday, October 17, 2025 | Jake Scott

[E. Pluribus Unum]

The remapping of global supply chains.

When President Trump announced a new 100% tariff on Chinese imports, in retaliation for Beijing’s latest export controls on rare earth elements, markets saw only the headline risk. But the real story lies beyond the ticker: a structural reordering of global trade. The world’s supply chains, long anchored to the Chinese mainland, are splintering.

Capital is scattering across Asia’s periphery, and shipping routes that once followed predictable trans-Pacific lines are being redrawn into a new web of uncertainty and opportunity. Alongside an eastward turn worth $100 billion in investment, the trends of the last 30 years of global financial flows are being upended.

The tariffs, nominally intended to protect American industry, have become a catalyst rather than a disruption. China’s tightening of export rules on rare earths, a sector that underpins global technology and defense manufacturing, has already caused shipments to fall sharply this autumn. That decline is deliberate: Beijing is weaponizing its market dominance to exert pressure on Washington and signal that supply chains remain a form of leverage. The Trump administration’s countermeasures (broad tariffs and new fees on Chinese-built ships docking in American ports, extensively disrupting the transshipment trend of recent years) seek to contain that leverage, yet they also deepen the fragmentation of global commerce.

Rather than simply pushing prices up, these measures are accelerating a diversification that had already begun. Companies that once treated China as the irreplaceable factory of the world are now spreading their risks across what trade analysts call a “China+1” or even “China+N” model.

Vietnam, Malaysia, Thailand, and India are attracting new investment in electronics, textiles, and automotive components as manufacturers seek to route goods through lower-tariff jurisdictions. The...

[Tell It Right]

Good news. Not as good as moving manufacturing to the U.S. But perhaps the best possible outcome. As long as the other Asian companies to tariff and import restrict against American imports like China has done for decades. I believe some of the other Asian countries have already whittled down their import restrictions.