There is a temptation as old as nations themselves: that of owing nothing to anyone, of closing one’s borders to create a self-sufficient territory, sheltered from shifting alliances and supplier blackmail. This temptation has resurfaced with a vengeance since the 2020 pandemic and the war in Ukraine, followed by the closure of the Strait of Hormuz.
The United States has concluded that its civil and military sovereignty relies on components manufactured in Taiwan. China, for its part, knows that it is dependent on semiconductors from Taiwan and South Korea, on soybeans from Brazil and the United States, and on liquefied natural gas from Australia, Qatar, and the United States. Europeans have realized that they depend on China for their solar panels and electric car batteries; on the United States for their weapons, financial systems, communications networks, and the software that runs their hospitals; on a few African and Russian mines for the fuel that powers their nuclear power plants; and on India for the active ingredients in most of their medications. Finally, the entire world has discovered that everyone’s agricultural and industrial production depends on sulfuric acid and helium, supplies of which have been cut off by the closure of the Strait of Hormuz.
Everyone has also come to understand that what was a vulnerability for others could become a formidable weapon: Beijing realized that its magnets—unique in the world—were a greater deterrent than its armies; Washington discovered that access to its communication networks and artificial intelligence applications could force a rival power to yield.
This form of economic blackmail is nothing new. The British used it for two centuries. As early as 1940, the United States turned access to its weapons and the dollar into means of coercion not only against its enemies but also against its closest allies. And the Chinese realized that the best way to bring President Trump to his senses (when he was boasting that he could make them pay enormous tariffs) was to cut off, without a word, their exports of magnets, gallium, and germanium—without which the entire Western industrial sector would soon grind to a halt. Both sides realized they had numerous companies holding global monopolies, capable of blackmailing all their customers. The Europeans, for their part, acknowledged that they had only one such company (ASML, a Dutch firm with largely American capital) and that this gave them no credible leverage for retaliation.
Everyone panicked in the face of this situation and began talking about the need for “economic sovereignty”—to produce everything domestically.
The United States began by repatriating electric vehicle production and is now providing massive subsidies for electric vehicles containing at least 50% components manufactured on U.S. soil, a ratio set to rise to 80% by 2027.
The Russians, Chinese, and Indians have done the same; the European Union is preparing to follow suit. France is relocating pharmaceutical production. India is imposing sky-high tariffs on foreign smartphones to force Apple and Samsung to manufacture them on its soil. Indonesia has banned the export of its raw nickel to compel foreign manufacturers to refine it locally. Côte d’Ivoire is attempting to do the same with coffee and cashews. And China, soon to achieve energy self-sufficiency, has launched massive biotechnology research programs to artificially produce, on its own soil, all the proteins needed to feed its population, so it can do without the United States, Africa, and Brazil.
Each of these decisions has its own logic; their simultaneous occurrence is absurd: If everyone tries to produce everything they consume domestically and penalizes or bans imports, many products will soon be unavailable or become very expensive, and everyone will become poorer. Already, in the United States, electric vehicles that comply with sovereignty standards cost 20% more than their imported equivalents, penalizing precisely those low-income households that need support during the energy transition. Similarly, rebuilding an entire chemical industry on European soil to produce all vital medicines—as has just been decided—will take decades and require colossal investments, to the detriment of necessary investments in many other areas of health and sustainable development.
All in all, this obsession with economic sovereignty fuels inflation, leads to recession, and fosters mistrust, conflicts of interest, and nationalism. War will follow if we continue down this path.
If sovereignty is an illusion, what should we do? The answer is simple. It can be summed up in one sentence: instead of seeking sovereignty, every country should adopt the rule of having at least four suppliers in every sector.
A country that buys its batteries from four different suppliers cannot be held hostage by any one of them. A country that spreads its natural gas supply sources across four producers gains real freedom of action.
This diversification does not call into question the obligation to invest in areas where external dependence would pose an unacceptable strategic risk: sustainable energy, agriculture and food, essential medicines and medical supplies, the most critical semiconductors, data centers, defense and security, and secure communications.
True sovereignty—the kind that provides lasting protection for peoples—is therefore not the kind that dreams of hermetic borders and entirely domestic production. It is the kind that recognizes that a nation’s strength lies in building one or more globally irreplaceable companies, in the quality of its alliances, and in the diversity of its partners. The European Union, for example, still sorely lacks a few globally irreplaceable companies, and its partners are far from sufficiently diverse.
True power today belongs to those whom no one can do without—and who, in turn, can do without anyone.