Entities the size of the US or the EU are capable of producing most or all strategically important products internally, and then trade still happens because not all products are strategically important. Or because e.g. people in the Northeast buy oil from Canada because it's closer to them than Texas, even if both countries have that industry.

> Entities the size of the US or the EU are capable of producing most or all strategically important products internally

The US can internally produce: food staples, fossil fuels and nuclear fuel, most (but not all) industrial chemicals and construction material, defense systems and major military equipment, generic drugs and many medical devices.

However, vulnerabilities exist in: semiconductors, rare earth minerals, speciality chemicals and pharmaceutical raw materials.

Even if the EU were a country, it has high self-sufficiency for: temperature agriculture, industrial chemicals, some aerospace and defense components. However, it is import dependent for: energy, specialty metals and rare earths, pharmaceuticals, high-tech electronics and semiconductors.

Lastly, what about the remaining 167 countries in the world (195 - US - EU)? 90% of the world's population live outside the US and EU.

Trade is really really important for human flourishing.

> The US can internally produce: food staples, fossil fuels and nuclear fuel, most (but not all) industrial chemicals and construction material, defense systems and major military equipment, generic drugs and many medical devices.

The US used to produce nearly all of those things and would benefit from having the industrial capacity to process rare earths even if some of the mining happens in Brazil or India or Australia.

> Lastly, what about the remaining 167 countries in the world (195 - US - EU)? 90% of the world's population live outside the US and EU.

They would then have the option to buy any of them from the US, the EU or China instead of having only one of those monopolize global production.

Most products are strategically important. You might be fooled into saying that toaster ovens aren't strategically important, but then if your country can't make its own toaster ovens, it turns out that it can't make dozens of other strategically important products either. Steel, ships, automobiles, semiconductors and computer infrastructure, food, clothing, aircraft, medical equipment, and on and on and on. It's difficult to name a manufactured product that isn't.

>Trade happens because not a single country has or can produce all the (strategically important) products it wants,

This is an interesting claim. What if instead, a single country could produce all the products it wants and needs, but that doing so would be less lucrative for a certain subset of the population that can take advantage of trade? In such a case, that single country might fail to do so and import a bunch of crap anyway, don't you think?