Weaponised Interdependence: The New Regulatory Frontier in Trump’s World Order

The long-standing myth of a 'flat' and decentralized global economy is rapidly giving way to a more volatile reality characterized by 'weaponised interdependence.' According to Abraham Newman, a leading political scientist at Georgetown University and co-author of Underground Empire, the networks that once promised borderless efficiency—semiconductor supply chains, global financial messaging, and mobile operating systems—have instead become highly centralized choke points. In this new era, globalization is no longer just about market access; it is about the strategic control of these hubs, which states now use as instruments of coercion, surveillance, and exclusion. This shift represents a fundamental challenge for the Legal and RegTech sectors, where compliance must now account for the weaponization of the very infrastructure that facilitates global commerce.

At the heart of this transformation is the realization that global networks are not as distributed as previously thought. For instance, the production of advanced chips remains heavily concentrated within the ecosystems of TSMC and Samsung, while the global mobile landscape is effectively a duopoly controlled by Apple and Google. Similarly, the SWIFT system and a handful of major banks serve as the indispensable plumbing for international finance. Newman argues that the United States, by virtue of its central position in these networks, has developed an 'underground empire' that allows it to monitor adversaries or sever their access to critical services. For legal professionals, this means that corporate strategy and risk management can no longer be decoupled from geopolitical statecraft. The regulatory environment is shifting from a focus on trade liberalization to one of 'vulnerability management,' where the primary goal is to secure or exploit these economic dependencies.

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For instance, the production of advanced chips remains heavily concentrated within the ecosystems of TSMC and Samsung, while the global mobile landscape is effectively a duopoly controlled by Apple and Google.

The second term of President Donald Trump has accelerated this trend toward what Newman describes as a 'neo-royalist' world order. In this framework, the distinction between private enterprise and state power becomes increasingly blurred. Large corporations are no longer viewed merely as market actors but as extensions of national power that must be protected or leveraged. This has profound implications for RegTech firms, which must now develop tools capable of navigating a landscape of rapidly shifting sanctions, export controls, and national security mandates. The traditional compliance model, which focused on static rules and predictable enforcement, is being replaced by a dynamic environment where regulatory actions are frequently used as tactical moves in broader geopolitical conflicts.

Looking ahead, the legal industry must prepare for a world where 'geopolitical due diligence' is as critical as financial auditing. Companies operating in sensitive sectors like semiconductors or fintech will face increasing pressure to choose sides or build redundant, parallel systems to mitigate the risk of being cut off from central hubs. The rise of weaponised interdependence suggests that the next decade will be defined by a struggle for control over the 'choke points' of the global economy. For RegTech innovators, the opportunity lies in creating sophisticated monitoring systems that can provide real-time visibility into these complex, state-influenced networks, helping firms anticipate and adapt to the weaponization of global trade.