President Trump has exposed a reality that we have ignored for far too long: International trade is no longer just about economics — it is also about national security. The U.S. faces a critical challenge in ensuring that the goods flowing into the country are not just cheap and efficient, but also safe and strategically sound.

Our global supply chains, long built for maximum cost-effectiveness, are now potential liabilities, susceptible to exploitation by adversaries and prone to disruption. Nowhere is this risk more pronounced than in our economic competition with China.

For decades now, we have recognized that financial institutions must exercise Know Your Customer policies. This helps to minimize the risks from money laundering and keeps funds out of the hands of terrorist organizations and organized crime. 

In a similar vein, as geopolitical tensions with China rise, we must ask whether we really know where our products come from, and more importantly, who controls them. 

The U.S. depends heavily on imports for many essential goods — pharmaceuticals, semiconductors, medical devices and critical minerals, to name a few. This reliance is not inherently dangerous, but our inability to trace these goods to their origin leaves us vulnerable. 

This is the era of “Know Your Product.” 

During the years of peak globalization, American businesses prioritized efficiency, often sourcing materials and products from the lowest-cost supplier. 

The problem? Many of those suppliers operate in opaque networks, particularly in China, where state-owned enterprises and undisclosed subcontracting make it difficult to determine the true origin of products. A single semiconductor or medical device may pass through multiple unknown hands before arriving in the U.S., making it virtually impossible to verify its integrity. 

What’s more, China regularly sells products to third countries who then trans-ship the products on to the U.S., evading tariffs or sanctions. A recent case exposed a Chinese transshipment of oil through Thailand to evade more than a quarter million dollars in tariffs.  

As the Trump administration tries to reduce our exposure to Chinese goods, strengthen U.S. manufacturing and bring investment to America, this blind spot can no longer be tolerated. 

The consequences of a lack of transparency are serious. 

Consider microchips embedded with vulnerabilities, counterfeit parts infiltrating our defense systems, or critical medications produced under unsafe conditions. Without stronger traceability measures, we are operating in the dark, exposing ourselves to supply chain disruptions, security breaches and economic coercion. 

China, the world’s largest manufacturer, wields its dominance in supply chains as a strategic tool. It has used trade as leverage in geopolitical disputes, cutting off exports of critical goods when politically convenient. 

It has also been accused of using forced labor in industries that feed into global markets, making it nearly impossible for American companies to ensure ethical sourcing without stronger oversight. 

The U.S. has responded with tariffs, domestic investment in key industries and restrictions on Chinese technology firms. But these measures will fall short if we do not address the fundamental problem: traceability. Without knowing where and how our goods are produced, even the most aggressive trade policies are like playing defense with a blindfold. 

If we are serious about securing our economy and reducing our dependence on opaque supply chains, we need a bold approach to trade transparency. That means: 

1. Requiring companies to map their supply chains: Businesses that rely on foreign suppliers, especially in high-risk industries, must disclose their supply chain networks, ensuring traceability from raw materials to finished goods. 
2. Leveraging technology for greater oversight: Blockchain, artificial intelligence, and digital tracking systems can make supply chains more transparent and reduce the risk of compromised goods entering the U.S. market. 
3. Embedding traceability in trade agreements: Future trade deals should include enforceable transparency standards, requiring all signatories to maintain verifiable supply chains. This is about more than just national or regional content. It is a matter of being able to verify the origin and trace the journey of goods entering national territory. The Trump administration’s March 26 announcement of auto sector tariffs and that “Importers of automobiles under the United States-Mexico-Canada Agreement will be given the opportunity to certify their U.S. content and systems” to reduce the overall tariff suggests that the administration is certainly moving in this direction.  
4. Strengthening Border and Customs Enforcement. Agencies responsible for regulating imports must have the resources and legal authority to stop suspect goods before they enter the U.S. economy. The private sector must be a reliable partner in this regard – they must employ new technologies in collaboration with our border and national security agencies. Again, President Trump’s March 26 executive order on the automotive sector calls for the Commerce Department and Customs and Border Protection to establish a process to apply tariffs to non-U.S. auto part content under the USMCA.  

The stakes could not be higher. The next major national security crisis may not come from the battlefield, but from the vulnerabilities hidden in our supply chains. If the U.S. is to maintain its economic and strategic leadership, we must act now to ensure that what we buy, and where it comes from, is no longer a mystery. 

Duncan Wood is president of the Pacific Council on International Policy.