Weaponized Interdependence: The New Geopolitical Risk in Trump’s Second Term

The global economic order is undergoing a fundamental transformation, shifting from a model of neoliberal efficiency to one defined by "weaponized interdependence." According to Abraham Newman, a professor at Georgetown University and co-author of Underground Empire, the traditional view of globalization as a decentralized, "flat" world is a caricature that fails to account for the extreme concentration of power within modern networks. In this new era, the very systems designed to facilitate global trade—such as semiconductor manufacturing, financial messaging, and mobile operating systems—have become the primary levers of state coercion.

This centralization is most evident in the technology and finance sectors. Newman highlights that the production of advanced logic chips is almost entirely dependent on two entities: TSMC and Samsung. Similarly, the global mobile ecosystem is a duopoly controlled by Apple’s iOS and Google’s Android. In finance, the SWIFT system and a handful of major banks serve as the gatekeepers for nearly all international transactions. While these hubs were built to maximize scale and lower costs, they have inadvertently created strategic chokepoints. For the United States, which sits at the center of many of these networks, this provides a unique "underground empire" capable of monitoring adversaries or severing their access to the global economy entirely.

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Newman highlights that the production of advanced logic chips is almost entirely dependent on two entities: TSMC and Samsung.

The transition to President Donald Trump’s second term marks a significant escalation in the use of these tools. Newman describes this as a "neo-royalist" world order, where economic interdependence is not just a byproduct of trade but a weapon to be wielded. Unlike the previous era of high globalization, where firms were largely left to manage their own supply chains, the current landscape sees the state actively intervening to weaponize these dependencies. This has profound implications for multinational corporations, which now find themselves caught between competing sovereign interests. A company’s reliance on a specific technology or financial corridor is no longer just an operational detail; it is a geopolitical risk.

For markets, the primary consequence is the replacement of efficiency with resilience and vulnerability management. Investors must now discount the "efficiency premium" that once drove global supply chain strategies. The risk of "de-platforming"—where a nation or company is suddenly cut off from a critical network—is no longer a theoretical outlier but a core component of sovereign strategy. This is particularly visible in the semiconductor industry, where export controls and domestic subsidies are reshaping the competitive landscape for firms like TSMC and Samsung.

Looking ahead, the challenge for global actors will be navigating a world where the "plumbing" of the international economy is increasingly politicized. As the Trump administration continues to leverage the U.S. position within these centralized hubs, other nations are likely to respond by attempting to build redundant, "sovereign" networks. This fragmentation could lead to a bifurcated global economy, where the cost of doing business rises as companies are forced to navigate multiple, incompatible technological and financial standards. The era of the "flat world" is over; in its place is a landscape of high-walled empires and strategic chokepoints.