In a recent Eurizon SLJ Capital research note, Stephen Jen examines the growing link between economic security, national security, manufacturing capacity and currency policy.
The note argues that the policy environment has shifted away from the assumptions that shaped the earlier era of globalisation. In Stephen’s view, economic efficiency is no longer the sole organising principle for policy. Instead, governments are increasingly focused on resilience, strategic capacity and security of supply.
As Stephen writes:
“Now, economic security is seen as more important than economic efficiency, because it is a prerequisite for national security.”
The note also highlights the importance of mid-tech manufacturing. While advanced technologies attract much of the attention, Stephen argues that broader industrial capacity remains central to defence readiness and economic resilience.
He writes:
“For the US, re-shoring of the mid-tech manufacturing will be a central part of the holistic plan to achieve economic security.”
This analysis also links directly to Stephen’s structural view on the dollar. The note argues that a more competitive currency is likely to be part of the broader effort to rebuild U.S. industrial capacity.
“My weaker dollar call is not cyclical but structural, related to the need to reshore a critical mass of mid-tech manufacturing.”
The research also considers whether parts of Europe’s industrial base, including the auto sector, could be redirected toward defence-related production as global rivalry increasingly blurs the lines between trade, technology and military capability.
As Stephen concludes:
“Global rivalry in trade, technology, and military will be increasingly blurred.”
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