The Diplomat author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Akhil Ramesh – director of the Economic Statecraft Initiative at the Pacific Forum – is the 514th in “The Trans-Pacific View Insight Series.”
Explain how the U.S.-led Pax Silica Initiative integrates economic security with foreign policy.
Pax Silica can be understood through two complementary lenses. First, it reflects a distinctive Trump administration initiative that uses critical technology cooperation – particularly across the silicon and semiconductor value chain – as a tool to strengthen bilateral relations while advancing broader U.S. economic and commercial interests. Second, it can also be seen as a continuation of the industrial policy foundations laid during the Biden administration.
Under President Biden, initiatives such as the Mineral Security Partnership (MSP), the Indo-Pacific Economic Framework (IPEF), and CHIPS4 were designed to complement domestic industrial policies like the CHIPS and Science Act and the Inflation Reduction Act. Pax Silica appears to build on these efforts, but with a stronger transactional and deal-oriented Trump approach, focusing on securing strategic agreements with countries across the world to reinforce U.S. leadership in semiconductor production, critical minerals, and advanced technology supply chains. In this way, economic security becomes a central pillar of foreign policy engagement.
Examine factors behind Indo-Pacific partners’ decisions to participate in Pax Silica.
The global economy remains deeply interconnected around two major poles: the United States and China. While the U.S. and its allies dominate the design and manufacturing of advanced semiconductors and high-end technologies, China maintains significant control over rare earth mineral processing and upstream supply chains.
For Indo-Pacific countries, participation in Pax Silica is driven by strategic pragmatism. These states recognize the importance of being part of every major economic and technological framework that offers security, investment, and market access benefits. Joining such initiatives allows them to diversify economic risk, attract industrial investment, strengthen domestic manufacturing capacity, and avoid overdependence on any single power. Rather than choosing sides outright, many countries view participation as a way to maximize strategic flexibility while benefiting from both U.S.-led and China-linked economic ecosystems.
What are the geopolitical drivers behind Pax Silica vis-à-vis China’s supply chain dominance?
Early in its second term, the Trump administration recognized that engaging with the People’s Republic of China required a fundamentally different approach than dealing with other major economies. While several countries sought negotiated settlements and conciliatory approaches in response to tariffs and trade disputes, China responded by leveraging its dominant position in rare earth mineral value chains and critical supply chains as a strategic tool.
Beijing’s willingness to weaponize its control over rare earth elements, processing infrastructure, and industrial inputs underscored the vulnerability of Western economies and defense industries. This accelerated the urgency for the United States and its allies to develop alternative supply chains and reduce dependence on China. Pax Silica emerges from this geopolitical reality: it is designed not only to strengthen industrial resilience but also to serve as a coordinated strategic response to China’s supply chain dominance and economic coercion.
Analyze the impact of the Iran-U.S. war on Pax Silica.
One of the less examined dimensions of Pax Silica is the effect of the Iran-U.S. conflict on its broader strategic viability. The conflict raises serious questions about the sustainability of building resilient supply chains through partnerships in regions vulnerable to geopolitical instability, particularly the Middle East.
If Pax Silica aims to create secure and diversified supply chains, reliance on conflict-prone regions may undermine that objective. While partnerships with Gulf states such as the UAE and Qatar offer clear advantages in energy security, capital flows, and AI infrastructure development, the broader regional instability creates significant long-term risks for industrial planning and supply chain continuity. In this sense, the war highlights a core tension within Pax Silica: balancing strategic economic opportunity with geopolitical risk management.
Assess the role of U.S. and Asian industry stakeholders in advancing the agenda of Pax Silica.
Ultimately, Pax Silica’s long-term success will depend less on political leadership and more on whether it gains durable support from industry stakeholders across the Indo-Pacific. For the initiative to survive beyond the Trump administration, it must be institutionalized through commercially viable frameworks that earn both bipartisan support in the United States and confidence from private sector actors across Asia.
Given the frequent shifts in U.S. policy between pro-climate industrial strategies and administrations skeptical of such agendas, industry stakeholders require predictability, stable rules, and long-term incentives. Companies are primarily motivated by access to U.S. markets, advanced technologies, and secure supply chains – not ideological competition. While Southeast Asian countries may be reluctant to embrace a strict “us versus them” bifurcation between the U.S. and China, they would strongly support an initiative that genuinely reduces supply chain bottlenecks and protects against geopolitical disruptions.
If Pax Silica is designed around practical supply chain resilience, industry could become its strongest advocate. However, if it becomes primarily a geopolitical instrument to counter China without delivering real commercial value, it risks becoming a symbolic initiative with limited strategic impact – a paper tiger rather than a transformative framework.