Peter Zeihan and James Fraser on Talks of the Trade: A Continued Conversation on Globalization

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• The current global landscape, shaped by deglobalization and national security priorities, is forcing a rapid and unprecedented re-evaluation of industrial capacity, supply chains, and technological application, necessitating difficult choices.
• Despite AI’s vast potential applications (manufacturing, agriculture, defense, finance), its extreme reliance on advanced semiconductors (90% from one town in Taiwan) means nations will be forced to choose one major application due to critically limited chip supply.
• North America (US and Mexico) is uniquely positioned demographically to absorb a massive industrial reshoring, but this requires an unprecedented multi-trillion dollar infrastructure buildout to double its industrial plant by 2030 and diversify Mexico’s industrial base beyond its current NAFTA footprint.
• The ambition to rebuild industrial capacity globally faces a severe raw material bottleneck; humanity has never doubled the output of an industrial material already in use within a decade, yet we need to do so for 20 critical materials (e.g., triple copper, 20x lithium) by 2030, necessitating difficult choices.