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- [00:04]
Yates
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 personal national security advisor to help you navigate the wild and woolly world that is out there. Maybe break down into Main street common sense terms the things that are happening in the world, things that 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 hits you right in the heart of your everyday life. Supply chains affect every 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's state and supply chains. Hope it will be a fun topic, one that's relevant to what's 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 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.
- [01:44]
HomeServe Advertiser
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- [02:12]
Coldwater Creek Advertiser
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- [02:43]
Ashley Iconetti / Capella University Advertiser
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- [03:47]
Yates
Welcome back to Nation States with Yates. Well, today we're going to take a fun deep dive into the topic of nation states and supply chains. As I said in the intro, it might sound a little wonky to you, but I think it actually is one of those things that 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 2026, where we've had some experience 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 understand where we've been at and where we need to go now. Just think back to 2020. 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 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 some said country and then lying to the World Health Organization, to our president about the nature of that virus and how it could spread 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 happen in our politics, our economy and our culture in 2020. And it all came from being too dependent on China. Now that's the virus part, but a specific part on supply chains that really came to 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 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 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 2020, 2021 especially. But 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 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 the mid the, the buildup 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 play ball or we will 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 administration, 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. This is about national survival in a world where 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 kids future and America's strength. Now, in doing this I want to really flag for you an outstanding article that was written by a friend of mine named Benjamin Weingarten. He wrote in the outlet Real Clear Investigations. It was on June 23, 2026. 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 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 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 60% of the production and nearly 90% 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, crucially our fighter jets, our missiles and our tanks. When the US Hits them with tariffs, Beijing fires 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 10% off of our gross domestic product. Put that in perspective, 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 play in manufacturing of everything that we use, they are in some ways 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 F35, 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 and in a time of crisis because of this dependency on medicines, China supplies about 90% of the key ingredients for generic drugs. Over 60% of US 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 got done some things and people have been trying, but the President needs some 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 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 can deepen ours on them. This is classic nation state power play. That's why we talk about it at nation states. 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 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 sectors. All of that is good, but experts say it's too ad hoc. We need to fix that. Corporate America, in some ways, is the problem. Wall street and Silicon Valley still love the big China market, cheap labor. Some major companies have actually increased their ties with the People's Republic of China in 2026. 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 they are reliant on a market like China might scare their investors or it might incur 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 crisis and if one comes, weather it in a way that minimizes damage on the American family's way of life. We also have the concept of tariff dodging. What I mean by that is China will route its things through friendly third countries so it doesn't appear as though something was made in China and it's coming from, say, Vietnam or Indonesia or India, Mexico, Canada, anywhere. And so that third party terror 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 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 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 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 more people out of poverty than any other force known to mankind. 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 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, but 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 Review Commission, put it really bluntly. If you let pure market dynamics run the show against a strategic rival like China, you're going to lose. This 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 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 anyone else in the world can continue to hum 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, those on the bowling lane 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 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. Your 401k if you're blessed to have one and not everyone does, 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. This isn't something that just people who are involved in import export trade 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, 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. The lesson diversify, reassure, critical stuff stockpile smartly 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 2026 that, that we didn't necessarily have in the toolkit in 2016 or 2006 or 1996. Where in the midst of that journey we brought the People's Republic of China into the World Trade Organization, thinking that 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 Republic of China doesn't follow those rules. That its 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 so called rules based international order that notions of fair trade, much less free trade or 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 in a time of crisis. When we lose those things. We're not really a country now. Of course we are. And we celebrate that more than ever. At 250 years of American independence, we should be rejuvenated. 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 my friend Lee Miller made clear in 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 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 something that is more clearly understandable to you in 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 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, on reliable partners here in America and those we can trust abroad. 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 more to go. Same with autos. We're getting things back into a more 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. Department of War has been backing domestic rare earth processing that is a major investment in the military supply chain, but also our 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 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 that you can also stay super informed on these things. Whether you do that by listening to 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 especially thank you for having walked with us in this journey 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 complex. Come back with some summary thoughts about our next steps in the Nation States with Yates. Journey back after
- [24:50]
Coldwater Creek Advertiser
you know what quality feels like. You can see it in the way a fabric moves, recognize it in a flawless fit, and appreciate it in the details that make our styles unique. It's the standard Coldwater Creek has honored for over 40 years, derived from a rich Mountain west heritage and designed for today in style styles that are distinctively Coldwater Creek. For a wardrobe you can count on season after season, visit coldwatercreek.com shop new arrivals and save 15 on purchases 75 or more with code iHeart.
- [25:21]
Ashley Iconetti / Capella University Advertiser
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- [25:51]
HomeServe Advertiser
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- [26:22]
Ashley Iconetti / Capella University Advertiser
inside you you can't ignore. Stand still. Not a chance. You're a lifelong learner who's come this far. Now we are here to help you keep going further. Capella University what can't you do? Visit capella. Edu to learn more.
- [26:39]
Yates
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 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. Gives you some things to encourage our policymakers to really dig in on to make sure that they're doing their part to map out the risks. Demand that transparency and accountability from companies and trade partners. Make sure that we're working with reliable partners and that they're prioritizing domestic capacity, 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 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'd greatly appreciate a positive review on your platform of choice for our program. It really helps us grow. It 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. We're America. We're great. We're problem solvers. 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 xswithyates. That's the X handle for the program or email us@NationStates yatesmail.com so so look forward to engaging with you in the not too distant future. We have 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 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 woolly world that comes comes at you fast. Stay strong America, till next time.