A World Under Construction

by Christopher Gannatti, CFA of WisdomTree, Inc., 3/27/25

Key Takeaways

  • The global economy is undergoing an unprecedented wave of industrial and infrastructure expansion, driving relentless demand for commodities across energy, metals and agriculture.
  • Structural shifts in trade policy, energy security and supply chains are reshaping commodity markets, with governments actively shaping demand through industrial policy and investment incentives.
  • The WisdomTree Enhanced Commodity Strategy Fund (GCC) seeks to offer diversified exposure to the commodities fueling this transformation, positioning investors to benefit from the long-term structural demand surge.

There was a time when commodities moved in predictable cycles. Demand would surge, supply would scramble to keep up, and eventually, the cycle would reset. Not anymore. The world isn't waiting for cycles; it's building—everywhere, all at once. Factories, power plants, semiconductor foundries and entire energy grids are being reengineered at a breakneck pace, not just in one country but across multiple industrial powerhouses. Governments, recognizing the urgency of self-reliance, are throwing their weight behind policies that drive infrastructure, manufacturing and energy independence. In this environment, the question isn't whether commodities are entering another cycle; it's whether supply can ever catch up with the sheer scale of what's being built.

America First, Again: The Return of Trumpian Industrial Policy

In the United States, the economic playbook is shifting again. With a resurgence of Trump-era policies, the focus is squarely on domestic production, supply chain security and energy dominance. Green energy incentives from the previous administration are being reassessed, with fossil fuels once again taking center stage. Expect coal, oil and natural gas to see a resurgence, with deregulation allowing for faster permitting and extraction.1

Meanwhile, the push to reshore critical industries is intensifying. Tariffs on steel, aluminum and key industrial components are being expanded,2 with the explicit goal of reducing reliance on China and other foreign suppliers. The White House's approach to manufacturing isn't just about semiconductors anymore; it's about a full-spectrum industrial revival, from heavy industry to rare earth refining. This isn't a short-term policy; it's a structural shift that will drive demand for raw materials, reshape supply chains and rewrite the global trade order.

The European Balancing Act: Green Ambitions and Resource Realities

Europe's ambitions remain firmly rooted in sustainability, but reality is forcing difficult decisions. The Green Deal Industrial Plan is fueling demand for lithium, nickel and other battery metals,3 yet supply chains remain fragile. Meanwhile, the continent is racing to replace Russian energy imports, driving long-term commitments to liquid natural gas (LNG) infrastructure and nuclear energy. In practice, this means heightened demand for uranium, natural gas and industrial metals, even as policy makers struggle to align environmental goals with economic necessities.

Global Trade Wars and the Supply Chain Shake-Up

The world isn't just building; it's also protecting what it builds. Trade barriers are becoming the norm, not the exception. The U.S. is doubling down on tariffs, making key metals more expensive on the global market. China is restricting exports of essential battery materials, putting Western automakers in a bind. Europe is crafting new trade agreements to secure access to critical raw materials, bypassing traditional suppliers. In this fragmented trade environment, supply chains are being rewritten in real time, and commodity markets are responding with volatility that isn't going away anytime soon.