1. Introduction
For much of recent decades, international trade operated under a widely accepted logic: produce where it is most efficient, source inputs where they cost the least, and distribute through highly integrated global chains. This model fostered productive specialization, deepened interdependence among countries, and sustained a significant expansion of trade flows. In practice, business decisions and public policies converged toward the same horizon: reducing costs, exploiting comparative advantages, and treating trade openness as an engine of growth.
This paradigm began to lose its semblance of stability when successive crises exposed the risk of concentrating critical stages of production in a few countries and suppliers. The COVID-19 pandemic simultaneously disrupted factories, transport, and the supply of essential inputs. Data from the World Trade (external link) Organization show that global merchandise trade volume fell by 5.3% in 2020 and rebounded by 9.8% in 2021 (WTO, 2022). Subsequently, technological disputes, sanctions, and trade restrictions reinforced a perception that has come to guide governments and businesses: efficiency alone does not ensure operational continuity. From that point on, diversification, partial regionalization, and structured risk management ceased to be exceptional measures and became integral to strategy.
It is in this environment that economic security takes center stage. In this article, the concept is understood as a country's ability to preserve the functioning of strategic sectors, secure access to essential goods and technologies, and reduce dependencies capable of compromising its development or national security. This is not merely about defense. It is about recognizing that trade, investment, technology, and industrial policy decisions can also expand or reduce vulnerabilities.
Much of the literature on geoeconomics focuses on the events that accelerated this shift—the pandemic, the rivalry between the United States and China, the war in Ukraine, and the increasing use of sanctions. My analysis begins from a different vantage point: more important than cataloging the shocks is understanding how they altered decision-making criteria. The central question, therefore, is why economic security has come to influence trade choices that, for decades, were driven predominantly by efficiency.
The hypothesis advanced here is that the risks are not strictly new; what is new is the weight they have come to carry. Efficiency, productivity, and competitiveness remain fundamental, but they now permanently coexist with supply continuity, diversification, technological autonomy, and geopolitical exposure. The aim is to demonstrate how this shift redefines both public policy formulation and corporate strategies. By shifting the focus from events to decision-making criteria, this article seeks to offer an integrated interpretation of the transformations reshaping international trade.
Methodologically, this is a qualitative and theoretical-analytical study supported by literature on international political economy, geoeconomics, and global value chains. The analysis also draws on government strategies, regulatory acts, and reports from multilateral organizations. These sources make it possible to trace the broadening of the concept of economic security and observe how it manifests in practice in decisions regarding technology, supply, production, and trade. The four case studies presented below serve as evidence of this transformation.
2. The evolution of the concept of economic security
State concern with strategic economic interests is not new. Tariffs, subsidies, restrictions, and domestic production incentives have always been used to protect sectors deemed essential. What is novel lies less in the existence of these measures and more in the breadth economic security has acquired and the central position it has come to occupy in public policy.
In the post-World War II era, the multilateral trading system was built upon the expectation that economic integration would produce mutual benefits and render disruptions more costly. This vision underpinned decades of liberalization, trade agreements, and the international fragmentation of production. The greater the interdependence, it was believed, the greater the incentive for cooperation and the narrower the scope for conflicts capable of halting economic flows.
Yet the very design that generated efficiency also heightened exposure to systemic risks. The concentration of strategic inputs in a handful of countries and the adoption of just-in-time inventories reduced the room for maneuver when facing shocks. The pandemic made this vulnerability impossible to ignore: shortages of medical equipment, semiconductors, and fertilizers demonstrated that a supply chain can be exceptionally efficient under normal conditions and yet poorly prepared for a crisis. Conflicts, sanctions, and export restrictions on sensitive technologies reinforced this conclusion.
From then on, economic security ceased to mean merely protection against financial crises. The concept expanded to encompass the supply of essential goods, the protection of critical infrastructure, the preservation of strategic sectors, and the strengthening of technological autonomy. In my view, this expansion reveals a rapprochement between economics and geopolitics. Trade, investment, and innovation can no longer be analyzed solely through their effects on prices and productivity, as they can also function as instruments of influence and leverage between states. Blackwill and Harris (2016) show how economic resources have become central elements of statecraft; Farrell and Newman (2023), in turn, explain how financial, technological, and logistical networks can be used coercively.
It is within this context that friendshoring, nearshoring, reshoring, and supplier diversification gain prominence. At first glance, they may appear to be mere logistical adjustments. In practice, they represent a deeper shift: an attempt to balance efficiency and resilience. The cheapest supplier may no longer be the best choice when located in a politically volatile region, exposed to sanctions, or lacking alternatives for substitution. The rise of economic security does not eliminate traditional trade fundamentals; it adds variables that previously occupied a secondary status.
3. The transformation of decision-making criteria
Recent changes have not only altered the environment of international operations; they have reshaped the logic underpinning decision-making. The core issue is not the emergence of risks, but the recognition that they must be systematically incorporated into trade and investment choices.
For decades, decisions regarding imports, exports, production internationalization, and supplier selection were guided primarily by cost, productivity, logistical efficiency, and market access. While this model generated substantial gains, it also created complex, sprawling supply chains heavily dependent on a few critical nodes. The greater the fragmentation, the higher the likelihood that a localized disruption would reverberate across multiple countries and sectors.
The consequence is direct: procurement costs began to be weighed against the potential cost of disruption. Companies started paying closer attention to supplier reliability, the political stability of the country of origin, route security, sanctions exposure, and the availability of alternative sources. This shift is particularly evident in semiconductors, critical minerals, pharmaceuticals, fertilizers, and energy transition components—sectors where the absence of a single input can paralyze entire value chains.
Hence, practices previously treated as exceptions—supplier diversification, strategic stockpiles, nearshoring, friendshoring, and reshoring—have become permanent fixtures of risk management. I do not interpret this shift as the end of globalization. Rather, what is underway is a reconfiguration: the pursuit of short-term gains remains relevant, but now shares ground with the need to sustain operations and supply under adverse scenarios. Economic security, therefore, does not replace competitiveness; it redefines how competitiveness is calculated.
4. The incorporation of economic security into trade policies
The shift within companies was accompanied by an equivalent transformation in state action. Several economies have come to treat economic security as a cornerstone of their trade, industrial, and technological policies. Sectors previously evaluated primarily for their contribution to growth began to be viewed also through their impact on sovereignty, supply, and national stability.
This turning point became clearer in the wake of the pandemic. In the United States, Executive Order 14017 mandated a review of critical supply chains, including semiconductors, batteries, critical minerals, and pharmaceuticals. The CHIPS and Science Act bolstered investments in domestic manufacturing capacity. The European Union structured its economic security strategy around diversification, the protection of critical technologies, and the reduction of excessive dependencies. Japan pursued a similar path, expanding incentives for domestic production and industrial resilience. Although the instruments vary, the common objective is to reduce vulnerability in sectors deemed essential.
There is, therefore, a shift in priorities. Rather than merely pursuing immediate efficiency gains, governments have begun evaluating whether their economies can withstand disruptions and preserve strategic capabilities. This does not necessarily signify a return to classical protectionism. In many cases, the goal is to reconcile openness with resilience. The result is an increasing convergence among trade policy, industrial policy, technology, and defense—a movement that is also evident in the renewed debate on contemporary industrial policy (Juhász; Lane; Rodrik, 2024).
4.1 Four case studies
The following four cases illustrate how this logic manifests across very different sectors. In all of them, vulnerabilities exposed by crises or geopolitical tensions prompted governments and firms to reconsider production and commercial decisions. The pattern recurs: when dependency threatens continuity, economic security begins to influence choices previously driven primarily by cost.
4.1.1 Semiconductors: Technological security as a strategic priority
Semiconductors are present in automobiles, defense systems, telecommunications, medical equipment, and artificial intelligence. This centrality contrasts with highly concentrated production. According to the United States International Trade Commission, Taiwan accounts for about 92% of global manufacturing capacity for the most advanced chips (USITC, 2024). Pandemic-era shortages paralyzed assembly lines and demonstrated that concentration can turn efficiency into vulnerability. Incentives for domestic production, research, and supply diversification reflect a clear policy choice: accepting higher costs in exchange for technological autonomy and greater security.
Critical minerals illustrate the same issue. They are indispensable for batteries, electric vehicles, wind turbines, and defense technologies, yet processing remains concentrated in a handful of countries. Data from the International Energy Agency indicate that China accounted for 91% of global refined rare earth production in 2024 (IEA, 2025). This dependence gains importance amid geopolitical disputes and trade restrictions. Consequently, various economies have begun incentivizing mining, processing, recycling, and new supply sources. In these decisions, mitigating vulnerabilities has come to carry as much weight as achieving the lowest cost.
Fertilizers and pharmaceuticals bring economic security closer to daily life. Reliance on imported fertilizers became especially acute when conflicts and trade restrictions drove up agricultural costs and placed upward pressure on food prices. In the case of pharmaceuticals, production concentration hindered access to active ingredients and medical supplies at the peak of demand. In both instances, governments began considering domestic production, strategic stockpiles, and source diversification. The reason is straightforward: when a supply chain underpins public health or food security, its evaluation cannot be confined to financial efficiency.
Agribusiness is perhaps the most comprehensive example. Traditionally analyzed in terms of productivity and comparative advantage, it has increasingly come to be treated as a component of food security. Temporary export restrictions, logistical bottlenecks, extreme weather events, and fertilizer market volatility have demonstrated that food supply is a strategic issue. The FAO (2024) highlights the persistence of risks affecting global food security. In this context, market diversification, storage capacity, logistical predictability, and stockpiles gain prominence. For Brazil, a major food exporter, the challenge lies in preserving competitiveness without overlooking supply security and supply chain sustainability.
These four cases lead to the same conclusion: economic security is not restricted to high technology. It extends to mining, healthcare, agriculture, and logistics. Across all these sectors, efficiency remains necessary, but ceases to be sufficient when continuity of supply and strategic exposure come into play.
5. Impacts on companies and international trade professionals
The mainstreaming of economic security goes beyond governments. It also redefines how firms internationalize and shapes the profile of international trade professionals. For a long time, management in this field focused on cost, lead time, negotiation, and logistics optimization. While these objectives remain valid, they no longer suffice on their own to address today's complexity.
Geopolitical tensions, more frequent disruptions, and the weaponization of economic tools for political leverage demand broader analysis. Before selecting a supplier, comparing price, quality, and delivery times is no longer enough. One must evaluate location, political stability, exposure to sanctions, regional dependency, and available alternatives. In many instances, the cheapest option may prove the riskiest over the long term. The same logic applies to destination markets: an attractive commercial opportunity may lose priority when it entails excessive regulatory, logistical, or geopolitical risks.
In this context, international trade professionals take on a more strategic role. They cease to be mere executors of customs procedures and begin generating intelligence for decisions on competitiveness, supply continuity, and corporate risk. This requires integration with procurement, logistics, planning, compliance, and market intelligence. Technical expertise such as tariff classification, customs regimes, trade agreements, and negotiation remains indispensable. The differentiator lies in linking this technical knowledge to scenario forecasting, risk prevention, and the ability to propose alternatives before a crisis strikes. It is at this juncture that economic security repositions the field within organizations.
6. Prospects for the future
The incorporation of economic security is here to stay. While the pandemic and recent conflicts accelerated this process, its primary drivers remain active: technological competition, the race for critical minerals, the energy transition, and extreme weather events. At the same time, there are no signs that global trade is disappearing. Rather, what emerges is a more selective, diversified, and politically conditioned globalization. The costs of disorderly fragmentation, however, would be steep. IMF estimates indicate that severe scenarios of geoeconomic fragmentation could reduce global output by up to 7% in the long term (Aiyar et al., 2023).
Global supply chains will likely evolve toward hybrid models, combining efficiency with multiple sourcing channels, greater geographic diversification, and more robust risk management mechanisms. It is not a matter of replacing globalization, but of making it less vulnerable. Governments are expected to expand support for strategic sectors, while companies will increasingly rely on traceability technologies, supplier monitoring, and scenario simulations. The challenge will be to prevent the legitimate pursuit of security from generating excessive fragmentation and costs that could undermine trade itself. This makes international cooperation just as vital as the defense of national interests.
7. Concluding remarks
The rise of economic security does not break with the historical principles of international trade. Efficiency, competitiveness, specialization, and integration remain pillars of the global economy. The shift lies in the broadening of the criteria used to make decisions. Resilience, operational continuity, supplier diversification, and strategic risk mitigation have come to be integrated into choices that were once guided almost exclusively by cost and productivity.
Throughout the article, I sought to demonstrate that the most significant transformation lies not only in new risks, but in the way governments and firms have come to evaluate them. Cost remains important, but it is no longer sufficient. Supplier reliability, geopolitical stability, substitutability, and technological autonomy have become permanent variables. The four case studies show that this shift does not belong to a single sector, nor does it respond to an isolated shock. From semiconductors to agribusiness, the movement toward resilience reveals a structural pattern.
The answer to the research question is straightforward: economic security has come to influence decisions previously driven by efficiency because the cost of disruption has become as important as the cost of acquisition. This is the article's main contribution. Economic security should not be understood as a rejection of the foundations of trade, but rather as an element that expands and redefines strategic decision-making. In practice, this shift also repositions International Trade within organizations, bringing the field closer to risk management, market intelligence, and the building of more resilient supply chains.
This study has the limitations inherent to a theoretical-analytical inquiry. The objective was to understand the evolution of the concept and its repercussions on decisions, without conducting quantitative research or in-depth empirical studies. Future research may develop resilience indicators, compare national strategies, and measure the effects of economic security policies on competitiveness and costs. Even so, one conclusion is already clear: in an environment of interdependence and geopolitical volatility, understanding economic security is no longer merely an academic exercise. It has become a prerequisite for formulating public policies and corporate strategies capable of sustaining trade amid scenarios of uncertainty.