The United States and the Philippines have announced plans to build a new industrial hub in the Southeast Asian country, which will be an economic security zone and the first of its kind. It is a smart and necessary step to protect American supply chains and businesses, and it fits the president’s National Security Strategy. It also promises to shore up alliances in an increasingly important part of the world.
The 4,000-acre site will be within the Luzon Economic Corridor to “leverage the Philippines geographic centrality in the Indo-Pacific, its young and technically skilled workforce, and its deepening alliance with the United States”, the State Department said.
The COVID-19 pandemic demonstrated the dangers of vulnerable supply chains and the need to anticipate future disruptions rather than react hurriedly to upheavals and dislocations. Accordingly, the Trump administration is working to make supply networks more resilient because they undergird the economy. The specific purpose of the economic zone in the Philippines is to make America’s supply of critical minerals more secure.
The Philippines has significant reserves of copper, cobalt, nickel, and chromite, and the new base will protect this supply and expedite its use.
Jacob Helberg, Under Secretary of State for Economic Growth, Energy and the Environment, says it will “fuse American expertise in institutions and legal regimes — to include internationally enforced contracts, transparent regulatory standards, and expert dispute resolution — with enhanced access” to the Philippines workforce, mineral endowments, energy resources, and strategic position.
It will be a “hub for industrial cooperation, shared growth and economic security, he added, noting, “We are doing new things because we are in new times.”
The global balance of power is shifting. The Indo-Pacific accounts for more than half of the world’s economy and is increasingly important to the United States economically and strategically.
China seeks mastery of the region and hopes to supplant the U.S. as the world’s sole superpower. Beijing has been engaged in the largest military buildup in modern history. China’s People’s Liberation Army is menacing countries throughout Asia, including the Philippines.
Chinese President Xi Jinping has called for the PLA to be ready to invade Taiwan by 2027. This could lead to a Sino-American war and would certainly disrupt supply chains and sea routes. The American Enterprise Institute and other institutions that study such vulnerabilities have warned that it could trigger a global economic depression.
As the “factory of the world,” China has used its manufacturing might to bully other nations in disputes, including over Taiwan. Economic coercion is a staple of Beijing’s strategy. Yet many countries, including the U.S. and its allies, remain precariously reliant on China. That needs to change, the sooner the better.
Establishing the new economic security zone is a step in the right direction. Trump’s 2025 National Security Strategy called for working “with our treaty allies and partners to counteract predatory economic practices … and ensure that allied economies do not become subordinate to any competing power.” The Luzon Economic Corridor is a manifestation of that strategy. It will protect American businesses and jobs by anticipating a turbulent future. By reducing China’s economic leverage, it may discourage Xi from pursuing his dream of conquering Taiwan.
AN ACTIVE AND ENGAGING NATIONAL SECURITY STRATEGY
According to the State Department, the Luzon hub is just a start, and eventually there will be a broader industrial network that will include integrated manufacturing sites, logistics corridors, and shared financial instruments across multiple partner countries.
America and the Philippines have a long shared history stretching back more than a century. The archipelago in the Western Pacific was at the center of the last great power war in that region, and it might find itself not far from the center of the next one. But the new industrial base and others to follow should leave America, its economy, and its allies better prepared and protected.