Treasury Secretary Scott Bessent on Tuesday said the United States does not seek to decouple from China but must reduce its dependence on foreign-controlled supply chains across semiconductors, critical minerals, and medicines. Speaking at a fireside conversation with Larry Kudlow in Asheville, North Carolina, Bessent framed supply chain resilience as a matter of both economic and national security.

The De-Risking Argument

“I often say in our trade discussions with China that we don’t want to pull apart from them, but we have to de-risk,” Bessent said. “We have to de-risk everywhere in the world.” He argued that the Covid-19 pandemic had exposed the dangers of concentrating critical goods production in a limited number of countries, leaving the US vulnerable to disruptions during crises.

Bessent rejected the notion that market forces alone could correct these vulnerabilities. “There are market failures,” he said. “And I think what we’ve learned is that maximal efficiency is not maximally secure.” Supply chains optimised purely for cost and efficiency, he argued, become liabilities during wars, pandemics, or other global disruptions.

Sectors in the Crosshairs

The Treasury Secretary specifically identified advanced semiconductors, critical minerals, and pharmaceutical ingredients as priority areas. He pointed to the absence of domestic amoxicillin production as a concrete example of strategic exposure. “We do not produce amoxicillin here in the US. So we have to do that,” he said.

On semiconductors, Bessent set a clear target: the Trump administration aims to bring 35 per cent of advanced semiconductor production back to the United States by the end of President Donald Trump’s current term. He said administration officials are actively working under the President’s direction to secure critical supply chain nodes.

Onshoring and the Craftsmanship Case

Beyond factories and tariffs, Bessent stressed the importance of preserving industrial skills. He invoked the example of American private industry’s rapid pivot to military production during the Second World War — made possible, he said, because the country already had the workers, factories, and technical expertise. “It is important to have the tradition of craftsmanship,” he said. “We need to make sure that we still have that in the US.”

Bessent also argued that the US economy cannot rest on consumer products and financial services alone. Certain strategically vital goods must be produced domestically or in “nearby and trusted countries” — a reference to the broader friend-shoring strategy Washington has been pursuing with allies.

Trade Policy Meets National Security

The remarks reflect Washington’s increasingly integrated view of trade policy and strategic security. Control over advanced technologies and essential industrial inputs is now seen as a source of geopolitical leverage, not merely an economic consideration. This comes amid ongoing US-China tensions over technology exports, rare earth access, and semiconductor supply chains — areas where both governments have taken escalating countermeasures in recent years.

Bessent’s comments signal that the US Treasury views supply chain restructuring as a long-term structural project, not a short-term tariff play. How far that restructuring proceeds — and at what cost to consumers and trade relationships — will be a defining question for American economic policy through the rest of this decade.