Supply chain chokepoints

Globalization, in its second half (roughly 1995–2020), optimized aggressively for cost. The result was a global supply chain that was extraordinarily efficient and extraordinarily fragile. The pandemic, the Ukraine war, the Red Sea attacks, and the US-China decoupling have together exposed that fragility, and we are now in a multi-decade re-routing whose shape is one of the most important things to watch.

A chokepoint is a node — a country, company, factory, port, strait, or material — whose loss would cascade. Chokepoints are where power lives. Knowing them is the difference between reading the news and understanding it.

The molecular chokepoints

Advanced semiconductors. TSMC (Taiwan) makes roughly 90% of the world's leading-edge chips (5nm and below). ASML (Netherlands) makes 100% of the EUV lithography machines that TSMC and Samsung use to make those chips. ASML's machines depend on light sources from Cymer (US, acquired) and mirrors from Zeiss (Germany). The entire frontier of computation runs through a dozen square kilometers of office park in three countries. This is why US export controls focus on semiconductor equipment — it's the one place leverage actually exists.

Rare earth elements. Not actually rare in the crust, but rare in economically extractable concentrations. China currently refines roughly 85–90% of the world's rare earths and produces a majority of permanent magnets used in motors, wind turbines, and missile guidance systems. The US, Australia, and others are spinning up alternative supply, but refining capacity takes a decade-plus to build.

Fertilizer inputs. Modern agriculture rests on three pillars: nitrogen (made via the Haber-Bosch process from natural gas), phosphorus (mined, mostly Morocco/Western Sahara), and potassium (mined, mostly Belarus, Russia, Canada). Disrupt natural gas prices and you disrupt nitrogen fertilizer; disrupt fertilizer and you disrupt yields; disrupt yields globally and you get food riots in poor countries. The 2022 Ukraine war shock illustrated all three vectors simultaneously.

Specialty pharmaceuticals. A staggering portion of the active pharmaceutical ingredients (APIs) for US generic drugs are made in India and China. A single Chinese province (Hubei) at one point made 60%+ of certain vitamin precursors. Penicillin, much of US generic antibiotic supply: foreign-sourced. The US can manufacture pharmaceuticals, but the cheapest reliable manufacturing has been offshored for decades.

Energy commodities. Hormuz Strait (20%+ of seaborne oil), Malacca (a quarter of global trade), Suez (12% of global trade, exposed during the Ever Given incident and again with the Houthi attacks), Bab el-Mandeb (Red Sea entry). These are not just shipping lanes; they are the physical instantiation of global trade. A single hostile actor with anti-ship missiles can re-route global commerce.

The logical chokepoints

Not all chokepoints are physical. Some are software and standards.

SWIFT. The Society for Worldwide Interbank Financial Telecommunication moves the messages that authorize roughly 90% of cross-border bank-to-bank payments. The US doesn't own SWIFT (it's Belgian-headquartered), but Treasury can effectively force exclusion of any bank or country, as happened with Iran (2012) and most Russian banks (2022). A messaging system became one of the most powerful weapons in international affairs.

Domain name root servers and CA infrastructure. The internet's name resolution runs through a coordinated system that is technically internationally governed but operationally US-influenced. The TLS certificate authority system — the chain of trust that makes "https" mean something — depends on a small number of certificate authorities whose compromise would unravel web security.

App store gatekeeping. Apple's App Store and Google's Play Store collectively control distribution to nearly all the world's smartphones. Whatever a developer can or cannot do is mediated by two companies' policies. This is recently being challenged (EU Digital Markets Act, US DOJ cases), but the structural concentration is extraordinary.

Cloud infrastructure. AWS, Azure, and Google Cloud host the great majority of consumer internet services and a non-trivial portion of government systems. A coordinated outage at one of them — or a politically motivated suspension of a customer — has happened, and will happen again.

The geometry of leverage

Henry Farrell and Abraham Newman's framework of "weaponized interdependence" is the academic frame for this. Their key insight: in a networked global economy, hub nodes (the few places everything flows through) become surveillance and coercion points. The country that controls the hub can see everything that passes through and can squeeze any participant by threatening to cut access.

The US dollar, US-controlled clearing systems, US-based cloud providers, and US-allied semiconductor equipment makers together form the most concentrated set of economic hubs in history. The reaction — from China, Russia, Iran, the EU in various ways — is to build redundant or alternative hubs. This is the largest unwinding of "free trade" since the 1930s, and it is not finished.