Liberation Day: The AI Trade Wars Are Here
Why Trump's Trade Wars must be understood in the context of AI strategy
I've made the case that AI is power. And war is the ultimate, the most violent, form of power. You can’t understand the trade wars President Trump unleashed yesterday without understanding this fundamental truth.
This morning, the dawn after ‘Liberation Day,’ three trillion dollars have seemingly evaporated from the US stock market. (While painful for many, it's also manna from heaven for investors betting long on the transformative technologies still in their earliest incubation phase.)
From Ho Chi Minh City to Mexico City, allies and foes alike are asking: Why?
While the full picture is complex, viewing it through the nexus of AI, geopolitics, and power sheds considerable light.
Crucially: It’s far more complicated than the old trope that Trump sees everything as a zero-sum game, a view supposedly held since the 1980s. Instead, his actions have everything to do with the seismic shifts upon us: a changing world order and the exponential advance of technology.
You cannot grasp the Trump administration's actions without understanding A) some fundamental truths about the evolving balance of power, and B) the beliefs the President and his inner circle hold in response.
Let’s break it down:
Truth 1 – The Unipolar Moment is Over: The US is no longer the sole global hegemon. It remains a superpower, but the coming decades could see China equal, or even surpass, America in hard power – economically, militarily, or both.
Belief 1: The next phase of global power is intimately tied to technological dominance. This will determine national wealth and military might. The US faces an existential challenge from China.
Truth 2 – Technology is Geopolitics: Technology dominance requires controlling resources – raw materials (energy, critical minerals), infrastructure (land, data centers, cloud), and highly sophisticated technologies (like advanced semiconductors) essential to retaining hard power.
Belief 2: The US must secure and control these resources if it is to retain its position as a global superpower. This counts for home-grown resources as well as for what it needs to ‘lock down’ internationally.
Truth 3 – AI Requires Massive Industry: Developing AI, and thus cultivating the infrastructure for power, is an industrial process requiring extraordinary capital mobilization and placing gargantuan strain on physical resources. This build-out is only just beginning (the subject of my research, Industrial Intelligence).
Belief 3: This critical national security infrastructure must be built at home. (Those 10-Gigawatt data centers aren't just powering workplace productivity; they're laying the groundwork for autonomous systems.) To achieve this, the US must onshore and 'friend-shore' production.
Truth 4 – Supply Chains are Battlegrounds: Technology supply chains remain dangerously globalized. A critical choke point remains Taiwan, sitting just 500miles off the coast of China, and producing the world’s most advanced silicon. Moreover, China dominates the refining capacity for a vast majority of the world’s rare earth minerals.
Belief 4: The US must wean itself off critical supply chain vulnerabilities involving competitors like China, while also revitalizing America's industrial base. This strategy aims to achieve two goals simultaneously: bolster domestic industry ('Make America Great Again') and secure technological dominance.
Truth 5 – The Deck is Already Stacked (Unevenly): Policy and investment decisions on tech infrastructure and energy made over the past decade have already stacked the deck. The US has energy sovereignty, and its hyperscalers own and invest heavily in the critical tech infrastructure worldwide. China is on a similar trajectory, identifying AI as critical to military development alongside massive energy investments. Europe, however, suffers from chronic underinvestment compounded by digital dependency and energy insecurity.
Belief 5: Reagan might be turning in his grave, but this competition is no longer solely about free markets. The US government believes it must actively team up with private industry, employing protectionism, resource strategy, and industrial policy to win the AI race and shore up critical sectors vital to national security and ultimate power.
This framework clearly runs through the statements and actions of the tumultuous ten weeks since Trump took office.
Remember Day 1? Trump signed the EO, ‘Removing Barriers to American Leadership in Artificial Intelligence.’ Soon after, JD Vance explicitly laid out the White House view on AI as the most significant technology and national security priority in Paris.
Consider the spectacle of near-weekly signings at the White House, with Trump ‘personally; brokering billions in investment to achieve exactly this. It’s some $3 trillion at my last count – from TSMC’s $100bn for chip fabs, to Apple's $500bn pledge to bring back its ‘assembled in China’ ethos, to the $1.4 trillion announced from the UAE for energy and data centers.
Even yesterday's tariffs were explicitly couched in these terms. President Trump’s administration justifies the new system as necessary for economic and national security, citing:
Protecting critical industries (like copper for defense/tech).
Boosting domestic production (reshoring manufacturing).
Addressing national security (reducing foreign dependency).
They are literally telling us why they are doing it. Dismissing this as merely Trump's zero-sum obsession is a shallow analysis that misses the deeper, more profound reality – one that will shape events long after Trump is a distant memory in the Oval Office.
It's the story I believe is the most important of our lifetimes:
We are in a new geopolitical era. Old certainties are ending. Technology is compressing space and time – the world will look starkly different within five years. Dominance of technology will be decisive in determining who holds power in whatever emerges next.
Why else is there talk in administration circles and among the Silicon Valley elite of ushering in a 'New Manhattan Project for AI'? Why else the newly forged bond between tech titans and the US government, analogous to the historical partnership between the Pentagon and the nascent Valley?
Because it becomes clearer by the day: AI is also War.
I will publish an in-depth analysis soon on the explicit links between AI and war, comparing the US, China, and Europe, but for now, all you need know is this:
'Liberation Day,' protectionism, Trumponomics – these are not random events tied to an erratic conductor. They are directly linked to the greatest geopolitical competition of the 21st century.
AI is about economics. AI is about war. AI is about power.
I totally agree with your article. World order is currently re-shaping, and AI is of the foremost importance in the outcome. I would argue that a shift from the post WWII unipolar order to a tri-polar world order (U.S.A, China, Russia) will be the result.
Also, I also think that the Trump administration foreign policy is more than "zero-sum obsession". In my opinion, it's a new strategic response to the US recognizing that the Truman doctrine cannot be sustained anymore, that a Russia-China close relationship should not be allowed to grow further (hence, US new approach with Russia), that China is moving forward with their Belt and Road Initiative (BRI) to leverage their international influence while being ahead in Critical Tech, that the Critical Minerals are crucial (therefore Ukraine, and Greenland), Energy is crucial (e.g. L.N.G. Alaska project) and are using tariffs as a compensation measure to improve trade balance given the cost of the US dollar status as the international reserve currency (which is a geopolitical tool more than anything). All of that, being careful of not triggering the nuclear response which would mean a mutual assured destruction (MAD).
Finally, my take is that the industrial nuclear power that arrives first to the Artificial General-Intelligence, will definitely rise as the new super-power because it could have the biggest army ever seen (as big as their industrial capacity allows), integrated by ai-led robots, no recruitment needed, reduced political cost of war, and an army that conventional human-soldier armies will not be able to match in terms of maneuvers and tactics.
Thanks for such a concise and insightful explainer of recent events, Nina. Coincidentally I rewatched Terminator 2: Judgement Day recently after first watching as a teenager - what a movie! I’d forgotten a key character and storyline which was prescient, Miles Dyson developing the original microprocessor that enabled the creation of Skynet. Seems we’re not too far off this terrifying imaginary future becoming reality…