The United States’ New Search for Economic Resilience

EXECUTIVE SUMMARY

MAIN ARGUMENT

The U.S.’s pursuit of economic resilience is transcending its traditional, narrowly defined goal of protecting critical U.S. technologies with sweeping new efforts to protect against a more extensive array of perceived external risks to U.S. economic security. From countering cyberattacks to mitigating climate change to reducing dependencies on exports from countries of concern, policymakers are reassessing the nation’s exposure to these and other vulnerabilities and instituting new economic tools to respond to them. Bolstering economic resilience—a new zeitgeist reflecting these broader economic security aims—has led to reinvigorated steps to redirect an array of more traditional trade and investment decisions in industries such as electric vehicles and solar panels toward new national economic goals. These measures range from expanding and strengthening technology controls for U.S. exports and foreign investments in areas such as advanced semiconductors and artificial intelligence to the introduction of new incentives such as industrial subsidies and tariff increases. These choices weaken the adherence of the U.S. to the rules and principles of open and liberal trade that it once promoted and pose new challenges both for its foreign relations, including with allies such as Japan, and for domestic and foreign businesses operating in the U.S. and around the world.

POLICY IMPLICATIONS

• Washington’s newly expanding definition of economic security is redefining priority U.S. national interests. Driven by domestic political change and new technological and global realities, this fundamental reorientation is transforming U.S. policy choices toward trade rules, fiscal priorities, and technological controls and incentives in the pursuit of economic resilience.
• New U.S. policy choices are eroding U.S. support for the rules-based approach to global trade and economic relations that Washington long championed, with major impacts on the future of the international trading system.
• From allies and adversaries to U.S. and foreign businesses, these choices are having a profound impact on the stability and security of the global international system that defined the past several decades.

Michael Beeman is a former Lecturer in international policy and Visiting Scholar at Stanford University’s Walter H. Shorenstein Asia-Pacific Research Center and is the former Assistant U.S. Trade Representative for Japan, Korea, and APEC.