Trump’s New US Industry Plan
- Global trade is undergoing a significant shift, according to Hernán Sáenz, a senior partner at Bain & Company and professor at Cornell's Johnson Business School.
- Sáenz points to tariffs as the latest in a series of shocks prompting a reconfiguration of value chains.
- The Trump management, Sáenz notes, had three primary goals: restoring the U.S.industrial base, establishing fair trade, and increasing national security.
Hernán Sáenz unpacks the core of Trump’s US industry plan, revealing a strategic shift in global trade strategies. He argues that current supply chains are no longer fit for purpose. The plan aims to reshape global value chains across key sectors like semiconductors and aerospace. The goal is to restore the US industrial base, increase national security, and balance trade by redesigning these chains post-2019 with a focus on shortening these chains and providing more flexibility. Tariffs aren’t the cause, but a symptom of the change. Discover insights from News directory 3 and learn how businesses are adapting to this new, complex landscape by focusing on resilience and regionalization. What will this mean for trade in the future?
Hernan Saenz on Trade, Tariffs & Shifting Global Supply Chains
Updated June 02, 2025
Global trade is undergoing a significant shift, according to Hernán Sáenz, a senior partner at Bain & Company and professor at Cornell’s Johnson Business School. With over 25 years of experience, Sáenz argues that current supply chains are poorly designed for today’s challenges.
Sáenz points to tariffs as the latest in a series of shocks prompting a reconfiguration of value chains. He suggests that post-2019, competitive supply chains must be shorter, more regional, flexible, traceable, and circular.This shift inevitably leads to a more expensive world, as cost minimization is no longer the sole priority.
The Trump management, Sáenz notes, had three primary goals: restoring the U.S.industrial base, establishing fair trade, and increasing national security. These objectives drive policies that favor domestic production in sectors like semiconductors, defense, biotechnology, and aerospace.
Sectors with potentially lower protectionism include machinery, vehicles, and the pharmaceutical and medical industries. The agri-food sector is primarily influenced by the desire to balance foreign trade, rather than national security concerns, according to Sáenz.
Sáenz highlights a shift in how companies view global markets. Instead of solely focusing on selling to the U.S. or producing in China, businesses are now reevaluating opportunities based on population size, wealth per capita, and product suitability. This is leading to a “rematching,” with Latin America emerging as a key region.
“If you factor in different places you can deal with the ruptures of the value chain”
Relocating production strengthens resilience by diversifying manufacturing locations. Sáenz explains that having factories in multiple countries mitigates the impact of disruptions in any single location.
While some theorists link protectionist policies to economic downturns, Sáenz acknowledges that globalization has disproportionately benefited the wealthiest 10% of the population, fueling economic nationalism and the rise of populist movements.
“In these 30 years of globalization,only 10% of the population were enriched”
What’s next
Looking ahead,businesses must adapt to a world where supply chains prioritize resilience and regionalization over pure cost efficiency. The rise of economic nationalism will continue to shape trade policies, requiring companies to navigate a more complex and localized global landscape.