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This paper examines the impact of globalization on global supply chains, highlighting the strategic leverage of dominant players like the U.S. and China. It explores how U.S. tariffs on EU goods and China’s control over rare earth minerals can disrupt trade, forcing companies to adjust supply chains and face higher costs. The paper focuses on the challenges posed by interdependencies, regulatory inconsistencies, and geopolitical tensions, particularly in the context of energy reliance and technological access.

Globalization has created complex economic networks, fostering both cooperation and dependency. This interconnectedness presents challenges, including regulatory inconsistencies, economic vulnerabilities, and geopolitical tensions. Some supply chains are dominated by a few key players, giving certain states significant leverage over global flows, shifting power dynamics.

U.S. tariffs on EU goods can disrupt sectors like automotive, pharmaceuticals, and technology, potentially forcing companies to reconfigure their supply chains, increase costs, or offshore production. The EU’s reliance on U.S. energy complicates the potential for retaliatory tariffs, as losses could outweigh benefits.

China’s control over rare earth minerals poses strategic challenges for both the U.S. and EU, as it holds significant influence over trade and technology access. Geopolitical tensions may lead to a bifurcation of global markets into U.S.-aligned and China-aligned supply chains, forcing countries and companies to choose between them, resulting in inefficiencies and higher costs.