July 9, 2026 • 25 mins
America’s supply chains are more than an economic issue. They are a national security issue. Steve Yates explains how dependence on the People’s Republic of China for critical materials, medicines, semiconductors, and manufacturing creates strategic vulnerabilities, why COVID-19 exposed those risks, and what policymakers, businesses, and citizens can do to build a more resilient and secure American economy.
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Speaker 1 (00:03):
Welcome to Nation States with Yates. The world comes at
you fast, whether in your house or the White House.
We here at Nation States with Yates aim to serve
as your passionate personal national security advisor to help you
navigate the wild and wooly world that is out there.
Maybe break down into mainstream, common street, common sense terms,
the things that are happening in the world, things that
(00:24):
the President has to deal with at the Resolute desk,
but also matter to you at your dinner table. So
today we're going to take on a fun, maybe even
a little bit wonky topic of supply chains. Now you
might think that it's a little far afield from your
everyday life, but I think it rits you right in
the heart of your everyday life. Supply chains affect every
(00:47):
American in the wallet, in the medicine cabinet, god forbid,
on the battlefield from time to time. Our dangerous dependence
on China for supply chains is front and center in
this conversation. So today we're going to take a deep
dive into the Nation State and supply chains. Hope it
will be a fun topic, one that's relevant to what's
(01:07):
happening in your life, your world, your community, but also
one that gives you some hope about things that we
can and should do as a country to overcome this
challenge that we've put ourselves into with a few decades
of free wielding globalization and overdependence on one country in
the world, and unfortunately a country that wants to compete
(01:29):
with us and maybe even worse. So back after the
break to take a deep dive into the nation state
and supply chains. Thank you for joining us, We'll catch
you after the break. Welcome back to Nation states with
yats so well. Today we're going to take a fun
(01:50):
deep dive into the topic of nation states and supply chains.
As I said in the intro, some might sound a
little wonky to you, but I think it actually is
one of those things will seem pretty clear and common
sense to you when we break it down. And it's
a major challenge that we face in the modern world,
especially in twenty twenty six, where we've had some experience
(02:12):
in the not too distant past that held up our
vulnerabilities in painful and clear ways. Now, what I'm alluding
to is the challenge of dependence on supply chains from
China first and foremost. It's not really limited to just China.
But that's the example that stands out in starkest relief,
and I think is the simplest example to try to
(02:33):
understand where we've been and where we need to go. Now,
just think back to twenty twenty, not that long ago.
We had this little thing called COVID. Now, I don't
really like going back and reliving the painful past of
what it was to have this virus come out into
(02:53):
the world, a government that was a part of developing it,
a government that was a part of locking down their
own country while encouraging people to leave said country, and
then lying to the World Health Organization, to our president
about the nature of that virus and how it could spread,
(03:14):
until it really got to the point where we were
doing incredibly ruthless things to interfere with civil liberties, interfere
with our economy. We had just a massive, i think
nuclear level explosion happened in our politics, our economy, and
our culture in twenty twenty. And it all came from
(03:36):
being too dependent on China. Now that's the virus part,
but a specific part on supply chains that really came
home on that was right in the middle of the
crescendo of when this was building up, China straight up
threatened to down us with a mighty sea of coronavirus
(03:58):
by cutting off masks and gloves what were called ppe,
the kind of things that we needed in our medical
facilities in order to try to slow the spread, as
they said, and they wanted to get them into mass
public use to try to slow the spread, as we
(04:19):
were told. Now we'll leave aside what the virus was
and what the right reaction should have been at the time.
Our hindsight is much more accurate now than it was
at the time. Some people saw it clearly right at
the get go, and throughout a lot of those people
took a lot of grief through the early stages and
enduring stages through twenty twenty twenty twenty one especially, But
(04:44):
first and foremost, right when the going got tough, there
was a question of whether China was going to hoard
the very supplies that were necessary for the world to
deal with a virus that came out of China, and
so there was exposed a critical vulnerability. Now that wasn't
just a vulnerability when it came to physical materials like
(05:07):
masks and gloves, also has to do with medical equipment,
has to do with the pharmaceutical goods that are used
to treat illnesses, whether it was COVID or other kinds
of things. There's critical dependencies that we have with the
People's Republic of China. So we knew at the time,
and it was put right in our face right in
(05:29):
the mid the build up on the COVID crisis that
the Chinese were going to potentially threaten control. And that
didn't come from some rogue or mean tweet that came
from a mouthpiece of the Communist Party of China itself.
It was a warning shot saying playball, or we will
(05:49):
yank the chain and the supply chain. That is, and
six years later, despite tariffs under President Trump continuing those
through much of the Biden Minute, we're still way too
hooked on Beijing for the stuff that keeps our economy,
our military, and our health running. Now this isn't about
really buying cheap T shirts at a big box store.
(06:11):
This is about national survival in a world where a
nation states compete sometimes ruthlessly, And today I want to
break it down in a main street way that helps
make clear why it matters to your job, your retirement,
your kid's future, and America's strength. Now, in doing this,
I want to really flag for you an outstanding article
(06:34):
that was written by a friend of mine named Benjamin Winingarten.
He wrote in the outlet Real Clear Investigations. It was
on June twenty third, twenty twenty six. For those that
are searching it and trying to find his article, the
title is National Insecurity America's continuing reliance on critical Chinese materials.
Please go download the article, give him the clicks he
(06:57):
needs to reward someone for writing an excellent article that
is on a topic that matters. But based on the
article that ben wrote, there's some big picture issues that
I think are worthy of our conversation and your conversation
with your elected leaders. Let's start with that China didn't
(07:19):
get to a position of controlling supply chains by accident.
They spent decades using subsidies, stealing technology, dumping cheap goods,
and even forced labor to dominate key materials. This has
to do with everything from what are called rare earths
and magnets. China controls over sixty percent of the production
(07:41):
and nearly ninety percent of the refining for those kinds
of things. These aren't just exotic rocks. They go into
your car, especially electric vehicles, but also MRI machines, wind turbines, smartphones,
and crucially, our fighter jets, our missiles in our tanks.
When the us IS hits them with tariffs, Beijing fires
(08:03):
back with threatening to withhold export of these important vital inputs.
War gamers say that if China moves against Taiwan creates
a conflict that gets in the way of exports to
the United States, that they could hold back these things
in a way that could shave as much as ten
percent off of our gross domestic product. With that perspective,
(08:25):
that would be a massive, massive economic crisis, not a recession,
a massive economic crisis much bigger than a recession. Then
there's the electronics and semiconductors. China leads in what are
called the foundational chips and printed circuit boards. These are
the non strategic things, but because of the importance they
(08:48):
play in manufacturing of everything that we use, they are
in some way strategic. But over two thirds of the
global market for these foundational chips and printed circuit boards
come from China. That's a pretty big dependence to have. Now,
these are in everything from satellites to ventilators to the
(09:08):
F thirty five, most advanced fighter jet that we've got
in our arsenal At this point, they're in your phone,
your truck, and in our defense systems. All of them
are vulnerable in a time of crisis. Because of this
dependency on medicines, China supplies about ninety percent of the
key ingredients for generic drugs. Over sixty percent of US
(09:28):
drugs have critical inputs from China and India. Imagine a
standoff where suddenly pharmacies run short of antibiotics or heart medications.
Not a pretty picture to imagine. Well, we got a
dose of what this could be like during COVID, but
unfortunately we haven't done near enough. We've done some things,
and people have been trying, but the President needs some
(09:50):
help in the Congress and in the private sector to
take what in Chinese parlance would be a great leap
forward so that we're in much improved position of manufacturing, refining,
and supplying ourselves and our friends, so that we're not
subject to these critical moments of some kind of a
(10:12):
threat to withhold from us in a war or something similar.
So what we need to do is flip this script.
This is really economic warfare by other means. China builds
dependencies so that they can use them against us. They
reduce their own reliance on us and others so they
(10:35):
can deepen hours on them. This is classic nation state
power play. That's why we talk about it at nation states,
and it's why it matters to the president, our Congress,
and our corporate leadership. They need to get this concept right.
So why haven't we fixed it? Republican and Democrat administrations
have tried tariffs, stockpiles, incentives to bring production home and
(11:00):
into alliances, things called friend shoring or safe shoring. There's
been some private investment. Hundreds of billions of dollars have
been committed to this cause in critical sect sectors. All
of that is good, but experts say it's to ad hoc.
We need to fix that. Corporate America, in some ways
is the problem. Wall Street and Silicon Valley still love
(11:22):
the big China market cheap labor. Some major companies have
actually increased their ties with the People's Republic of China
in twenty twenty six, despite all the tough talk, they
push back on efforts towards transparency because mapping out where
supply chains are is expensive and messy, and admitting that
(11:43):
they are reliant on a market like China might scare
their investors or it might incurb Beijing's wrath or worse retribution.
So there's a lot of these private sector signals that
are not on board with this critical mission for getting
the American ship right so that we can avoid a
(12:04):
crisis and if one comes, whether it in a way
that minimizes damage on the American families way of life.
We also have the concept of tariff dodging. What I
mean by that is China will route it's things through
friendly third countries so it doesn't appear as though something
was made in China, it's coming from say Vietnam, or Indonesia,
(12:27):
or India, Mexico, Canada, anywhere. And so that third party
terrort dodging has been another reason why we haven't gotten
a little bit better yet on these supply chains, and
allies aren't always on the same page with us about
the nature of the challenge and what the prescription is
(12:48):
for how to deal with it. So inside government coordination
can be clunky, whether we like it or not. We
vote in administrations for four year terms but there's a
permanent bureaucracy, there's a sprawling government apparatus. It's a wild pony,
wild herd of ponies to try to tame, and so
(13:09):
the administration has its hands full in trying to be
able to do that. Legislative cycles sometimes go too slow,
and the trends that are shaping the competitive landscape we
live in for these supply chains are moving very very fast.
Another friend of mine has highlighted a very very key
point in all of this that we're not going to
(13:31):
get there where we need to be from here unless
we internalize some of the mistakes that were made in
the past behavioral but also in some of our beliefs.
Maybe like me, you really believe in the magic of
the free market, and where there are free people engaging
in free enterprise, that's a beautiful thing that has lifted
(13:51):
more people out of poverty than any other force known demandkind.
So we want more of that. But some parts of
the planet are not free people, not free governments, not
free environments. They don't play by the rules. They they
don't play out in the open where we can verify
what's really being done, and that has put us at
a disadvantage in ways that are not just economic, but
(14:14):
things that have to do with the health and welfare
of our people and our own national security. So another
friend of mine, Leland Miller, who serves on the US
China Economic and Security Reviewview Commission, put it really buntly.
If you let pure market dynamics run the show against
a strategic rival like China, you're going to lose. This
(14:36):
requires a whole of society focus national security first. I
happen to agree with Lee about this ordering of things
very much agree with first principles about free enterprise, freedom, deregulation,
small government, all of those things. But I also think
that the one reason we have a federal government first
(14:57):
and foremost is to provide for the common defense to
do things that the individual states under federalism can't do
in their separate ecosystems. We need a coordinated federal effort
to make sure that our national security is honored first,
and then when we have reasonable confidence in that arena,
the private sector that innovates better than any anyone else
(15:20):
in the world can continue to humme along do the
greatest things for the greatest number of people in otherwise
free markets. But we need to have those buffers, those barriers,
those bumpers on the bowling lean to make sure that
the ball doesn't skip out of bounds and compromise our
national security. So whole of society focus making sure that
(15:43):
national security is first. This is the mindset where we
begin to get supply chains right. So here's a Main
Street angle on this. Supply chains are fragile prices, spike
jobs disappear overseas, and security erodes or four oh one
k if you're blessed to have one and not everyone does.
(16:03):
Feels it when factories can't get their parts well, your
health feels it when drugs get scarce, our military readiness,
that's our sons and daughters safety on the line. That's
where supply chains really are. This isn't just some academic discussion.
This isn't something you just read in the Wall Street Journal.
(16:23):
This isn't something that just people who are involved in
export trade are are focused on. This is something that
we all need to focus on. It needs to be
a very high national priority, not just for elected leaders,
but for you and me in pushing our elected leaders
to do something about it. For nation states in general,
(16:46):
the notion of supply chains is fundamental to being a
nation state. Whether it's Europe on energy or Japan on
chips or anyone. Sovereignty means controlling your own lifelines. No
country can be truly independent if a rival holds the
choke points. Lesson, diversify, resure, reshore critical stuff, stockpile smartly,
(17:11):
use tools like targeted tariffs to protect industries if we
have to while we rebuild capacity. These are the things
that are in the toolkit in twenty twenty six that
we didn't necessarily have in the toolkit in twenty sixteen
or two thousand and six or nineteen ninety six, where
in the midst of that journey we brought the People's
Republic of China into the World Trade Organization, thinking that
(17:34):
integrating China into the global rules based international order would
change them to become more like the rest of us,
to conform more with the rules and norms that defined
what these institutions were when they were set up. But instead,
by decades of experience, we've learned sadly that the People's
(17:55):
Republic of China doesn't follow those rules, that it's economic
weight has become so big and we have become so
dependent on it that it can behave sometimes with impunity
in ways that break apart or undermine that's so called
rules based international order, that notions of fair trade, much
(18:15):
less free trade, are trampled upon when we don't have
reciprocity or golden rule of doing unto others as you
would have them do unto you. When we lose those things,
we lose our sovereignty. When we lose those things, we
lose the ability to take care of our families at
a time of crisis. When we lose those things, we're
(18:36):
not really a country now. Of course we are, and
we celebrate that more than ever. At two hundred and
fifty years of American independence, we should be rejuvenate. We
should be having a revival of the spirit that brought
America into being, that made America great, and it can
extend that greatness long into the future. But as Friendly
(19:00):
Miller made clear, and that quote that I shared with you,
we don't get from here to there unless we really
understand that we have to have a whole of society
effort looking at these areas of dependency where we get
the critical inputs for our country and making sure that
we're spending what we need to Now in order to
(19:20):
put in the right place the systems that we need
to take care of what matters most to us, our
national security, our family's health and well being, the competitiveness
and resiliency of the economies that are driving our country
all bread and butter America. So hopefully this has been
(19:42):
something that is more clearly understandable to you and talking
through this subject matter, and you feel comfortable in being
able to talk with your community leaders, your corporate leaders,
your chambers of commerce, but also especially your elected leaders
to make sure they're doing everything they can to get
America right. And if you are shareholders by way of
your own direct stocks, through your retirement accounts, speak up
(20:07):
yourselves through those who represent you, to make sure that
the fiduciary duty of those companies is looking at what
matters to you, the investor, the stakeholder in this system.
That we want to make sure that this house is
built on rock, not sand, and that it's dependent on
reliable partners here in America and those we can trust abroad,
(20:29):
not on those who are most likely to disrupt our
way of life and worse maybe threaten it. There are
some bright spots we have made progress in the defense
industrial manufacturing supply chain. It started from a bad spot.
It's getting better. We've got a wait more to go.
Same with autos. We're getting things back into a more
(20:50):
competitive space and maybe we'll right size that with good
American innovation and some smart policies to make sure we're
looking at carefully at supply chains. A Department of War
has been backing domestic rare earth processing that is a
major investment in the military supply chain, but also our
(21:10):
civilian supply chain to minimize that critical dependency. And we've
got to ensure that we've got enough production that is
happening outside of China so that they can't strangle us.
So we don't have to be completely self sufficient. We
just have to make sure we've got enough of it
outside of a country that can and will use it
against US. America's strength has always been in innovation and
(21:34):
resilience always should be. We beat bigger threats before by
getting serious about them. We should get serious about this one.
Policymakers on both sides, Republican and Democrat, are saying some
of the right things, but they need to keep mapping
out the risks. Demanding transparency from companies working with reliable
partners and prioritizing domestic capacity in truly vital areas. Hope
(21:59):
that you can also stay super informed on these things.
Whether you do that by listening to the Nation States
with Yates, but also in all the other areas you
feed your mind and feed your arsenal of information as
you go out into the world to make it a
better place. I want to take a moment to specially
thank you for having walked with us in this journey
(22:20):
looking at the big challenges to the Nation State. I
want to thank you for liking, sharing, subscribing, Please continue
to do so. Encourage your friends, family, church members to
maybe give it a listen. Download helps the program grow.
And we're going to take a brief break from talking
about critical supply chains and the Nation State. Come back
(22:41):
with some summary thoughts about our next steps in the
Nation States with Yates. Journey back after me. Welcome back
to Nation States with Yates. Thank you for joining us
today to talk about the vital intersection between supply chains,
something you didn't think you were interested in maybe, but
(23:02):
hopefully you were when we got down into the nitty
gritty of it and how it impacts our nation state,
the United States of America. Hopefully it gave you some
inspiration that we're making progress in some areas, we just
need to do more and do it better. It gives
you some things to encourage our policy makers to really
dig in on, to make sure that they're doing their
part to make to map out the risks, demand that
(23:25):
transparency and accountability from companies and trade partners, make sure
that we're working with reliable partners and that they're prioritizing
domestic capacity over just making sort of a quick profit
in the near term. Thinking about our national security first
and the welfare of our whole society. That's where it
really comes down to it for all of us. So
(23:48):
hopefully you feel well armed to engage in those conversations.
I want to take a moment to personally thank you
for joining the conversation. Please continue to like, subscribe, and
share if you have some free time and you're so inclined.
I greatly appreciate a positive review on your platform of
choice for our program. It really helps us grow. It
(24:08):
helps the algorithm move to reach more people like you
who want to think about the real serious things facing
our nation state, but do it in a clear, common
sense way that looks at what's really happening and what
some real solutions might be, not just scaring you into
thinking we're in a time of crisis. Even if we are,
there's a way out where America. We're great. We're problem solvers,
(24:29):
we're makers, not takers. We can do this, and we
can do it together. So I just want to take
a moment to personally thank you for that. Please continue
to help us grow and develop the program. If you'd
like to give some feedback or some program ideas, please
feel free to join us on X at NS with
(24:50):
Yates that's the X handle for the program, or email
us at Nation States Yates at gmail dot com. So
look forward to engaging with you in the not too
distant future. We got some fun new things coming soon
with some recorded interviews with guests that I like and
respect and hopefully you will too, and some other ways
to interact with our content in the written form in
(25:12):
addition to the audio and video form of the podcast.
So again, thank you very much for joining us. Please
come back to Nation States with Yates, your personal national
security advisor for navigating this wild and wooly world that
comes at you fast. Stay strong, America until next time
Welcome to Nation States with Yates. The world comes at
you fast, whether in your house or the White House.
We here at Nation States with Yates aim to serve
as your passionate personal national security advisor to help you
navigate the wild and wooly world that is out there.
Maybe break down into mainstream, common street, common sense terms,
the things that are happening in the world, things that
(00:24):
the President has to deal with at the Resolute desk,
but also matter to you at your dinner table. So
today we're going to take on a fun, maybe even
a little bit wonky topic of supply chains. Now you
might think that it's a little far afield from your
everyday life, but I think it rits you right in
the heart of your everyday life. Supply chains affect every
(00:47):
American in the wallet, in the medicine cabinet, god forbid,
on the battlefield from time to time. Our dangerous dependence
on China for supply chains is front and center in
this conversation. So today we're going to take a deep
dive into the Nation State and supply chains. Hope it
will be a fun topic, one that's relevant to what's
(01:07):
happening in your life, your world, your community, but also
one that gives you some hope about things that we
can and should do as a country to overcome this
challenge that we've put ourselves into with a few decades
of free wielding globalization and overdependence on one country in
the world, and unfortunately a country that wants to compete
(01:29):
with us and maybe even worse. So back after the
break to take a deep dive into the nation state
and supply chains. Thank you for joining us, We'll catch
you after the break. Welcome back to Nation states with
yats so well. Today we're going to take a fun
(01:50):
deep dive into the topic of nation states and supply chains.
As I said in the intro, some might sound a
little wonky to you, but I think it actually is
one of those things will seem pretty clear and common
sense to you when we break it down. And it's
a major challenge that we face in the modern world,
especially in twenty twenty six, where we've had some experience
(02:12):
in the not too distant past that held up our
vulnerabilities in painful and clear ways. Now, what I'm alluding
to is the challenge of dependence on supply chains from
China first and foremost. It's not really limited to just China.
But that's the example that stands out in starkest relief,
and I think is the simplest example to try to
(02:33):
understand where we've been and where we need to go. Now,
just think back to twenty twenty, not that long ago.
We had this little thing called COVID. Now, I don't
really like going back and reliving the painful past of
what it was to have this virus come out into
(02:53):
the world, a government that was a part of developing it,
a government that was a part of locking down their
own country while encouraging people to leave said country, and
then lying to the World Health Organization, to our president
about the nature of that virus and how it could spread,
(03:14):
until it really got to the point where we were
doing incredibly ruthless things to interfere with civil liberties, interfere
with our economy. We had just a massive, i think
nuclear level explosion happened in our politics, our economy, and
our culture in twenty twenty. And it all came from
(03:36):
being too dependent on China. Now that's the virus part,
but a specific part on supply chains that really came
home on that was right in the middle of the
crescendo of when this was building up, China straight up
threatened to down us with a mighty sea of coronavirus
(03:58):
by cutting off masks and gloves what were called ppe,
the kind of things that we needed in our medical
facilities in order to try to slow the spread, as
they said, and they wanted to get them into mass
public use to try to slow the spread, as we
(04:19):
were told. Now we'll leave aside what the virus was
and what the right reaction should have been at the time.
Our hindsight is much more accurate now than it was
at the time. Some people saw it clearly right at
the get go, and throughout a lot of those people
took a lot of grief through the early stages and
enduring stages through twenty twenty twenty twenty one especially, But
(04:44):
first and foremost, right when the going got tough, there
was a question of whether China was going to hoard
the very supplies that were necessary for the world to
deal with a virus that came out of China, and
so there was exposed a critical vulnerability. Now that wasn't
just a vulnerability when it came to physical materials like
(05:07):
masks and gloves, also has to do with medical equipment,
has to do with the pharmaceutical goods that are used
to treat illnesses, whether it was COVID or other kinds
of things. There's critical dependencies that we have with the
People's Republic of China. So we knew at the time,
and it was put right in our face right in
(05:29):
the mid the build up on the COVID crisis that
the Chinese were going to potentially threaten control. And that
didn't come from some rogue or mean tweet that came
from a mouthpiece of the Communist Party of China itself.
It was a warning shot saying playball, or we will
(05:49):
yank the chain and the supply chain. That is, and
six years later, despite tariffs under President Trump continuing those
through much of the Biden Minute, we're still way too
hooked on Beijing for the stuff that keeps our economy,
our military, and our health running. Now this isn't about
really buying cheap T shirts at a big box store.
(06:11):
This is about national survival in a world where a
nation states compete sometimes ruthlessly, And today I want to
break it down in a main street way that helps
make clear why it matters to your job, your retirement,
your kid's future, and America's strength. Now, in doing this,
I want to really flag for you an outstanding article
(06:34):
that was written by a friend of mine named Benjamin Winingarten.
He wrote in the outlet Real Clear Investigations. It was
on June twenty third, twenty twenty six. For those that
are searching it and trying to find his article, the
title is National Insecurity America's continuing reliance on critical Chinese materials.
Please go download the article, give him the clicks he
(06:57):
needs to reward someone for writing an excellent article that
is on a topic that matters. But based on the
article that ben wrote, there's some big picture issues that
I think are worthy of our conversation and your conversation
with your elected leaders. Let's start with that China didn't
(07:19):
get to a position of controlling supply chains by accident.
They spent decades using subsidies, stealing technology, dumping cheap goods,
and even forced labor to dominate key materials. This has
to do with everything from what are called rare earths
and magnets. China controls over sixty percent of the production
(07:41):
and nearly ninety percent of the refining for those kinds
of things. These aren't just exotic rocks. They go into
your car, especially electric vehicles, but also MRI machines, wind turbines, smartphones,
and crucially, our fighter jets, our missiles in our tanks.
When the us IS hits them with tariffs, Beijing fires
(08:03):
back with threatening to withhold export of these important vital inputs.
War gamers say that if China moves against Taiwan creates
a conflict that gets in the way of exports to
the United States, that they could hold back these things
in a way that could shave as much as ten
percent off of our gross domestic product. With that perspective,
(08:25):
that would be a massive, massive economic crisis, not a recession,
a massive economic crisis much bigger than a recession. Then
there's the electronics and semiconductors. China leads in what are
called the foundational chips and printed circuit boards. These are
the non strategic things, but because of the importance they
(08:48):
play in manufacturing of everything that we use, they are
in some way strategic. But over two thirds of the
global market for these foundational chips and printed circuit boards
come from China. That's a pretty big dependence to have. Now,
these are in everything from satellites to ventilators to the
(09:08):
F thirty five, most advanced fighter jet that we've got
in our arsenal At this point, they're in your phone,
your truck, and in our defense systems. All of them
are vulnerable in a time of crisis. Because of this
dependency on medicines, China supplies about ninety percent of the
key ingredients for generic drugs. Over sixty percent of US
(09:28):
drugs have critical inputs from China and India. Imagine a
standoff where suddenly pharmacies run short of antibiotics or heart medications.
Not a pretty picture to imagine. Well, we got a
dose of what this could be like during COVID, but
unfortunately we haven't done near enough. We've done some things,
and people have been trying, but the President needs some
(09:50):
help in the Congress and in the private sector to
take what in Chinese parlance would be a great leap
forward so that we're in much improved position of manufacturing, refining,
and supplying ourselves and our friends, so that we're not
subject to these critical moments of some kind of a
(10:12):
threat to withhold from us in a war or something similar.
So what we need to do is flip this script.
This is really economic warfare by other means. China builds
dependencies so that they can use them against us. They
reduce their own reliance on us and others so they
(10:35):
can deepen hours on them. This is classic nation state
power play. That's why we talk about it at nation states,
and it's why it matters to the president, our Congress,
and our corporate leadership. They need to get this concept right.
So why haven't we fixed it? Republican and Democrat administrations
have tried tariffs, stockpiles, incentives to bring production home and
(11:00):
into alliances, things called friend shoring or safe shoring. There's
been some private investment. Hundreds of billions of dollars have
been committed to this cause in critical sect sectors. All
of that is good, but experts say it's to ad hoc.
We need to fix that. Corporate America, in some ways
is the problem. Wall Street and Silicon Valley still love
(11:22):
the big China market cheap labor. Some major companies have
actually increased their ties with the People's Republic of China
in twenty twenty six, despite all the tough talk, they
push back on efforts towards transparency because mapping out where
supply chains are is expensive and messy, and admitting that
(11:43):
they are reliant on a market like China might scare
their investors or it might incurb Beijing's wrath or worse retribution.
So there's a lot of these private sector signals that
are not on board with this critical mission for getting
the American ship right so that we can avoid a
(12:04):
crisis and if one comes, whether it in a way
that minimizes damage on the American families way of life.
We also have the concept of tariff dodging. What I
mean by that is China will route it's things through
friendly third countries so it doesn't appear as though something
was made in China, it's coming from say Vietnam, or Indonesia,
(12:27):
or India, Mexico, Canada, anywhere. And so that third party
terrort dodging has been another reason why we haven't gotten
a little bit better yet on these supply chains, and
allies aren't always on the same page with us about
the nature of the challenge and what the prescription is
(12:48):
for how to deal with it. So inside government coordination
can be clunky, whether we like it or not. We
vote in administrations for four year terms but there's a
permanent bureaucracy, there's a sprawling government apparatus. It's a wild pony,
wild herd of ponies to try to tame, and so
(13:09):
the administration has its hands full in trying to be
able to do that. Legislative cycles sometimes go too slow,
and the trends that are shaping the competitive landscape we
live in for these supply chains are moving very very fast.
Another friend of mine has highlighted a very very key
point in all of this that we're not going to
(13:31):
get there where we need to be from here unless
we internalize some of the mistakes that were made in
the past behavioral but also in some of our beliefs.
Maybe like me, you really believe in the magic of
the free market, and where there are free people engaging
in free enterprise, that's a beautiful thing that has lifted
(13:51):
more people out of poverty than any other force known demandkind.
So we want more of that. But some parts of
the planet are not free people, not free governments, not
free environments. They don't play by the rules. They they
don't play out in the open where we can verify
what's really being done, and that has put us at
a disadvantage in ways that are not just economic, but
(14:14):
things that have to do with the health and welfare
of our people and our own national security. So another
friend of mine, Leland Miller, who serves on the US
China Economic and Security Reviewview Commission, put it really buntly.
If you let pure market dynamics run the show against
a strategic rival like China, you're going to lose. This
(14:36):
requires a whole of society focus national security first. I
happen to agree with Lee about this ordering of things
very much agree with first principles about free enterprise, freedom, deregulation,
small government, all of those things. But I also think
that the one reason we have a federal government first
(14:57):
and foremost is to provide for the common defense to
do things that the individual states under federalism can't do
in their separate ecosystems. We need a coordinated federal effort
to make sure that our national security is honored first,
and then when we have reasonable confidence in that arena,
the private sector that innovates better than any anyone else
(15:20):
in the world can continue to humme along do the
greatest things for the greatest number of people in otherwise
free markets. But we need to have those buffers, those barriers,
those bumpers on the bowling lean to make sure that
the ball doesn't skip out of bounds and compromise our
national security. So whole of society focus making sure that
(15:43):
national security is first. This is the mindset where we
begin to get supply chains right. So here's a Main
Street angle on this. Supply chains are fragile prices, spike
jobs disappear overseas, and security erodes or four oh one
k if you're blessed to have one and not everyone does.
(16:03):
Feels it when factories can't get their parts well, your
health feels it when drugs get scarce, our military readiness,
that's our sons and daughters safety on the line. That's
where supply chains really are. This isn't just some academic discussion.
This isn't something you just read in the Wall Street Journal.
(16:23):
This isn't something that just people who are involved in
export trade are are focused on. This is something that
we all need to focus on. It needs to be
a very high national priority, not just for elected leaders,
but for you and me in pushing our elected leaders
to do something about it. For nation states in general,
(16:46):
the notion of supply chains is fundamental to being a
nation state. Whether it's Europe on energy or Japan on
chips or anyone. Sovereignty means controlling your own lifelines. No
country can be truly independent if a rival holds the
choke points. Lesson, diversify, resure, reshore critical stuff, stockpile smartly,
(17:11):
use tools like targeted tariffs to protect industries if we
have to while we rebuild capacity. These are the things
that are in the toolkit in twenty twenty six that
we didn't necessarily have in the toolkit in twenty sixteen
or two thousand and six or nineteen ninety six, where
in the midst of that journey we brought the People's
Republic of China into the World Trade Organization, thinking that
(17:34):
integrating China into the global rules based international order would
change them to become more like the rest of us,
to conform more with the rules and norms that defined
what these institutions were when they were set up. But instead,
by decades of experience, we've learned sadly that the People's
(17:55):
Republic of China doesn't follow those rules, that it's economic
weight has become so big and we have become so
dependent on it that it can behave sometimes with impunity
in ways that break apart or undermine that's so called
rules based international order, that notions of fair trade, much
(18:15):
less free trade, are trampled upon when we don't have
reciprocity or golden rule of doing unto others as you
would have them do unto you. When we lose those things,
we lose our sovereignty. When we lose those things, we
lose the ability to take care of our families at
a time of crisis. When we lose those things, we're
(18:36):
not really a country now. Of course we are, and
we celebrate that more than ever. At two hundred and
fifty years of American independence, we should be rejuvenate. We
should be having a revival of the spirit that brought
America into being, that made America great, and it can
extend that greatness long into the future. But as Friendly
(19:00):
Miller made clear, and that quote that I shared with you,
we don't get from here to there unless we really
understand that we have to have a whole of society
effort looking at these areas of dependency where we get
the critical inputs for our country and making sure that
we're spending what we need to Now in order to
(19:20):
put in the right place the systems that we need
to take care of what matters most to us, our
national security, our family's health and well being, the competitiveness
and resiliency of the economies that are driving our country
all bread and butter America. So hopefully this has been
(19:42):
something that is more clearly understandable to you and talking
through this subject matter, and you feel comfortable in being
able to talk with your community leaders, your corporate leaders,
your chambers of commerce, but also especially your elected leaders
to make sure they're doing everything they can to get
America right. And if you are shareholders by way of
your own direct stocks, through your retirement accounts, speak up
(20:07):
yourselves through those who represent you, to make sure that
the fiduciary duty of those companies is looking at what
matters to you, the investor, the stakeholder in this system.
That we want to make sure that this house is
built on rock, not sand, and that it's dependent on
reliable partners here in America and those we can trust abroad,
(20:29):
not on those who are most likely to disrupt our
way of life and worse maybe threaten it. There are
some bright spots we have made progress in the defense
industrial manufacturing supply chain. It started from a bad spot.
It's getting better. We've got a wait more to go.
Same with autos. We're getting things back into a more
(20:50):
competitive space and maybe we'll right size that with good
American innovation and some smart policies to make sure we're
looking at carefully at supply chains. A Department of War
has been backing domestic rare earth processing that is a
major investment in the military supply chain, but also our
(21:10):
civilian supply chain to minimize that critical dependency. And we've
got to ensure that we've got enough production that is
happening outside of China so that they can't strangle us.
So we don't have to be completely self sufficient. We
just have to make sure we've got enough of it
outside of a country that can and will use it
against US. America's strength has always been in innovation and
(21:34):
resilience always should be. We beat bigger threats before by
getting serious about them. We should get serious about this one.
Policymakers on both sides, Republican and Democrat, are saying some
of the right things, but they need to keep mapping
out the risks. Demanding transparency from companies working with reliable
partners and prioritizing domestic capacity in truly vital areas. Hope
(21:59):
that you can also stay super informed on these things.
Whether you do that by listening to the Nation States
with Yates, but also in all the other areas you
feed your mind and feed your arsenal of information as
you go out into the world to make it a
better place. I want to take a moment to specially
thank you for having walked with us in this journey
(22:20):
looking at the big challenges to the Nation State. I
want to thank you for liking, sharing, subscribing, Please continue
to do so. Encourage your friends, family, church members to
maybe give it a listen. Download helps the program grow.
And we're going to take a brief break from talking
about critical supply chains and the Nation State. Come back
(22:41):
with some summary thoughts about our next steps in the
Nation States with Yates. Journey back after me. Welcome back
to Nation States with Yates. Thank you for joining us
today to talk about the vital intersection between supply chains,
something you didn't think you were interested in maybe, but
(23:02):
hopefully you were when we got down into the nitty
gritty of it and how it impacts our nation state,
the United States of America. Hopefully it gave you some
inspiration that we're making progress in some areas, we just
need to do more and do it better. It gives
you some things to encourage our policy makers to really
dig in on, to make sure that they're doing their
part to make to map out the risks, demand that
(23:25):
transparency and accountability from companies and trade partners, make sure
that we're working with reliable partners and that they're prioritizing
domestic capacity over just making sort of a quick profit
in the near term. Thinking about our national security first
and the welfare of our whole society. That's where it
really comes down to it for all of us. So
(23:48):
hopefully you feel well armed to engage in those conversations.
I want to take a moment to personally thank you
for joining the conversation. Please continue to like, subscribe, and
share if you have some free time and you're so inclined.
I greatly appreciate a positive review on your platform of
choice for our program. It really helps us grow. It
(24:08):
helps the algorithm move to reach more people like you
who want to think about the real serious things facing
our nation state, but do it in a clear, common
sense way that looks at what's really happening and what
some real solutions might be, not just scaring you into
thinking we're in a time of crisis. Even if we are,
there's a way out where America. We're great. We're problem solvers,
(24:29):
we're makers, not takers. We can do this, and we
can do it together. So I just want to take
a moment to personally thank you for that. Please continue
to help us grow and develop the program. If you'd
like to give some feedback or some program ideas, please
feel free to join us on X at NS with
(24:50):
Yates that's the X handle for the program, or email
us at Nation States Yates at gmail dot com. So
look forward to engaging with you in the not too
distant future. We got some fun new things coming soon
with some recorded interviews with guests that I like and
respect and hopefully you will too, and some other ways
to interact with our content in the written form in
(25:12):
addition to the audio and video form of the podcast.
So again, thank you very much for joining us. Please
come back to Nation States with Yates, your personal national
security advisor for navigating this wild and wooly world that
comes at you fast. Stay strong, America until next time
The Clay Travis and Buck Sexton Show News
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Clay Travis
Buck Sexton
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