By: Jane Mellsop and Mariko Togashi

Economic security has been hitting the headlines in recent years, with the catchcry that “economic security is national security” underpinning many countries’ view of the world today. While there is no single definition of economic security, the United States and its allies and partners in the Indo-Pacific are increasingly concerned about the security and resiliency of their supply chains and access to markets for strategic products, including critical minerals; the disruptions their businesses face from geopolitical, health or climate crises; inappropriate technology transfers; and the risks of economic coercion. The emphasis that each of these countries places on individual economic security issues will necessarily differ due to a range of factors such as their development status, national interests, vulnerabilities, and China policies.

In 2023, the Group of Seven (G7) leaders took the first unified step to put the spotlight on economic security as a critical global challenge. Japan shepherded through a new G7 Leaders’ Statement on Economic Resilience and Economic Security at the Hiroshima Summit, highlighting the need to address economic vulnerabilities and counter exploitative practices. By taking this move, the G7 illustrated its leadership in addressing pressing global economic issues, especially as other groups, such as the World Trade Organization (WTO), falter in generating collective responses and rules to address new challenges. Representing around a third of the global economy, the G7 can set the tone and the agenda for action on critical issues facing the global economy, although its small number of members is also a limitation when trying to garner broad support for new initiatives.

Meanwhile, a number of countries have also been busy developing distinct national economic security strategies (not all of which are public) or strategies to tackle specific issues — such as Japan’s semiconductor and digital industry strategy, Korea’s strategic technology plan, or India’s approach to critical and emerging technologies. Alongside these, countries are also including economic security as a specific topic for discussion among leaders during bilateral meetings, as with the recent Japan–United States summit in April. The elevation of economic security shows that for many countries in the Indo-Pacific, the stability of their regional relationships and the depth and strength of their relationship with the United States remain crucial to long-term security and prosperity. A number of Indo-Pacific countries are also concerned that any measures taken by countries to protect or enhance their own economic security are in accordance with the international rules-based trading system.

A Democrat in the White House

The United States has employed a range of tools to build out its economic security agenda in recent years. The Biden administration has focused on strengthening and diversifying supply chains, especially in key sectors. In 2021, the recommendations flowing from the “100-day review” of supply chain vulnerabilities focused on strengthening the resilience of these supply chains through, inter alia, working with partners to address vulnerabilities and a more robust industrial policy that supports domestic industry. The re-shoring of critical areas of production was supported through new legislation such as the Inflation Reduction Act (IRA) and the CHIPS and Science Act, with more than $800 billion having been pledged in subsidies for semiconductor manufacturing and research, climate and energy investments, and infrastructure spending.

Alongside these domestic measures, the Biden administration has put extra effort into reenergizing its relationships with a range of Indo-Pacific countries. For example, it invested in rebuilding the Quad with Australia, Japan, and India, as well as pulling together some new mini-groupings, such as the Philippines, Japan, and U.S. summit in April 2024 and the historic Japan, Korea, and U.S. summit in August 2023. Consistent with this increased engagement was the introduction of its so-called friendshoring policy, whereby the United States has been reducing its economic and trade dependencies on unfriendly countries in favor of its allies and partners. This can be seen in action through the conclusion of a supply chain agreement under the Indo-Pacific Economic Framework (IPEF) among 14 countries and the establishment of the Minerals Security Partnership, which includes four key partners (Australia, India, Japan, and South Korea) from the Indo-Pacific. Biden also put a premium on working with partners to address economic coercion risks and, in particular, supporting them when they faced coercion. For example, as one State Department official noted earlier this year, “we are all in for South Korea and any other partners who face Chinese economic coercion.”

National Security Advisor Jake Sullivan characterized the Biden approach on economic restrictions that apply to China as “small yard, high fence.” This has included export controls such as adding more than 300 Chinese companies to the Entity List (more than in the Trump administration) that requires a license for exports and establishing an outbound investment screening mechanism for specific sectors. The United States continues to work with partners including the Netherlands and Japan to successfully implement its export controls. Also, in the name of national security, in May, the United States announced new tariffs to tackle head on some of China’s unfair trade practices, including a 102.5% tariff on electric vehicles. As these moves have expanded on Trump’s tariffs, being “tough on China” is now seemingly cemented as a bipartisan policy.

Continuity Most Likely Under Harris

It is likely that a Harris administration would follow a similar path as President Biden has on underscoring the importance of economic security, diversifying and strengthening supply chains, and re-shoring domestic production. In 2021, Harris commented that it was “critical our trade policies prioritize American workers and businesses,” and it seems unlikely this will change, given the growing domestic pressure to keep jobs in the United States and the touted success of programs such as the IRA and CHIPS and Science Act in politically important states.

It is expected that a Harris administration would continue the Biden approach to prioritize working closely with partners and allies in the Indo-Pacific on a range of issues, including economic security. Harris has traveled to seven countries in the region as vice president (although not China), including representing the United States at the Asia-Pacific Economic Cooperation (APEC) meeting in 2022 and has taken a keen interest in some Asian foreign policy issues such as Hong Kong’s freedoms and Myanmar. In the 2020 campaign, she emphasized that she would “work with our allies in Europe and Asia to confront China on its troubling trade practices.” Similarly, Brian Deese, economic policy advisor to the Harris-Walz campaign, has said that “America’s national and economic security is bolstered through strong alliances.” These partnerships could include supporting more collective action to address concerning economic coercion tactics, working together to ensure effective implementation of the U.S. export controls, and strengthening supply chains.   

Whether the “yard” will continue to grow and encompass more and more products, services, and investments will in part be determined by the course that China takes, and how China’s actions are perceived by the United States. Given the impact such expansion could have on other partners, it will be critical for the United States and partners and allies in the region to work together to ensure both that the measures taken by the United States are effectively implemented and that partners and allies can avoid being caught up in them. As vice president, Harris has advocated for de-risking from China, commenting in 2023 that “it’s not about pulling out but it is about ensuring that we are protecting American interests, and that we are a leader in terms of the rules of the road, as opposed to following others’ rules.”

Two possible areas of expansion are human rights and the environment. Harris’s track record includes co-sponsoring the Uyghur Human Rights Policy Act, and she has previously noted the value in using trade to promote human rights, a viewpoint that is likely to impact China policy. Likewise, Harris’s concern for the environment, including her earlier statements around prioritizing clean energy in international trade, may mean environmental elements are included in considerations of appropriate supply chain partners or the IRA’s climate provisions are beefed up. She may also be inclined to draw a more explicit link between addressing climate change and our economic security and prosperity.

The Trump Administration on Economic Security

Donald Trump was instrumental in bringing economic security issues to the fore during his presidency, with China being central in his sights. In launching his 2017 National Security Strategy, President Trump said, “for the first time, American strategy recognizes that economic security is national security.” In 2018, the Trump administration imposed new tariffs on steel and aluminum imports citing national security grounds. These measures attracted the ire of a number of U.S. partners in the Indo-Pacific that were also impacted, especially as many of them regarded the action as trade protectionism and inconsistent with trade obligations.     

Citing China’s unfair trade practices, such as dumping, discriminatory non-tariff barriers, forced technology transfer, overcapacity, and industrial subsidies, Trump imposed a range of tariffs on more than $300 billion worth of Chinese goods over his term. China in turn retaliated with its own tariffs and other measures affecting U.S. imports. Trump also restricted access to cutting-edge technologies through export controls. Amid increasing tensions with China, in 2019, the Chinese telecom company Huawei was a high-profile addition to the Entity List, with exports to hundreds of other Chinese companies similarly restricted over the president’s term. In 2020, further restrictions prevented American manufacturers of equipment used to produce semiconductors from selling to companies abroad that wanted to sell chips to Huawei. Furthermore, federal agency use of Huawei’s equipment was restricted.

Trump’s administration was more focused on “making America great again” — with less interest in nurturing key relationships in the region. His transactional approach to many relationships meant that he did not prioritize assisting countries that were targets of economic coercion, as South Korea found out when it faced economic retaliation from China following its 2016 decision on the Terminal High Altitude Area Defense (THAAD) installation. The U.S. absence disappointed South Korea and is still keenly felt by some.

The vulnerability of U.S. access to critical minerals was also recognized by the Trump administration, with the Department of Commerce beginning to establish a coordinated federal strategy to address supply chain challenges in this sector in 2019.

What Does Trump II Hold in Store?

Trump’s rhetoric on China appears largely unchanged, and it seems likely that the next Trump administration would continue many of Biden’s economic security measures, including further actions against China. Trump has promised (at least) 60% tariffs will be imposed on all Chinese goods to protect the American economy and jobs. He has also promised a 10% (or higher) tariff on goods imported into the United States from anywhere. Both of these moves, were they to happen, would have significant impacts for Indo-Pacific partners. And such impacts would not be limited to just economic consequences but would also undermine key relationships with allies and partners in this important region that the Biden administration has been strengthening.   

Trump is unlikely to stop with tariffs next time round. As Robert Lighthizer, key Trump advisor and former U.S. trade representative in the Trump administration testified to the House Select Committee on China, a multipronged approach is needed. This would include strengthening export controls on dual-use and other important products and technologies flowing from U.S. entities to China, expanding the scope of the Committee on Foreign Investment in the United States (CFIUS) so that it can block Chinese investment in the United States for reasons other than a national security threat, and establishing a regime to screen all outbound investment into China. It is worth noting that Lighthizer also stressed that the United States should work with its allies on this strategy wherever possible.

In the past, Trump was willing to take unilateral action to bolster national security at the expense of the U.S. friends and allies in the Indo-Pacific, and it remains unclear whether he would take their views on board this time round. A second Trump administration is likely to again be focused on America First as the driver of its economic and trade policy. This would also lend it to supporting a continuation of the industrial policy to support U.S. manufacturing — although Trump is likely inclined to adjust the IRA to reflect his priorities.

Given Trump’s track record, it seems likely that he would be interested in supporting allies and partners in the Indo-Pacific (or elsewhere) to address economic vulnerabilities only when those countries can show that there are some tangible benefits for America. However, Trump’s preoccupation with trade deficits may interfere with other countries’ strategies to reduce economic dependencies on potential adversaries if those strategies entail selling more goods and services to the United States.

The Biden administration’s Indo-Pacific Economic Framework (IPEF), which Trump has labeled as “TPP-2,” has drawn Trump’s ire. In November, Trump claimed that he would “knock out” TPP-2 immediately upon taking office. Such a move would be a great disappointment to the region, which is looking for more — not less — U.S. engagement and leadership on trade issues.   

In any case, Indo-Pacific countries are preparing their own strategies for engaging with the next administration and whatever that may bring, highlighting the value that they bring to the United States and the importance of stability in the region for broader U.S. economic security. They are also busy working on contingency plans should they face the action that has been threatened during the campaign, including looking at potential exceptions that could be negotiated, whether retaliation is an option, and considering alternative markets.

Maintaining Momentum and Strengthening Partnerships

The future of economic security policy in the United States and the Indo-Pacific centers on strengthening partnerships and maintaining momentum. Due to the very nature of the interconnected world economy and the challenges that so many countries face today, working with allies and partners to effectively address those challenges is going to be critical. No country, be it the United States or a country in the Indo-Pacific, can singlehandedly achieve its economic security goals — whether those be to ban access to high-end technologies (or other products), build resilient supply chains, address highly subsidized goods flooding the global market, or bounce back from being a target of economic coercion.

The United States needs to consider the benefits beyond the direct and immediate dollars and cents when considering the value of cooperation and collaboration with partners in the Indo-Pacific. For example, the broader benefits of maintaining a functioning rules-based world order need to be part of the equation when it comes to economic security calculations. In this regard, the United States is also at risk of losing credibility with its partners (and its future partners) if it continues down a path of unilateral action, especially when its partners are, albeit sometimes unintentionally, caught in the crossfire. Better communication and coordination with its partners and allies to address the common challenges are going to bear more fruit, especially in the long run. Absent these, there are real risks for the continuing influence that the United States will have in the region.

The United States and Indo-Pacific countries should work together to build on the momentum for addressing economic security challenges and drive forward further work internationally. For example, G7 trade ministers could adopt an action plan that sets out pragmatic and concrete steps that countries can take to support work in this area. A key part of that plan should involve broadening out G7 cooperation to involve more partners in the Indo-Pacific region — the United States should draw on its significant convening power here. Indeed, the United States has an opportunity to draw on its economic weight to lead the economic security agenda in a manner that will create more favorable and effective economic and security conditions for both itself and its friends.

For its part, Indo-Pacific countries need to clearly articulate their economic security agenda; prioritize having up-to-date economic security strategies across the region; and, importantly, identify where the United States fits into their strategies (whether it is a Democrat or a Republican in the White House). Indo-Pacific countries need to insert themselves into conversations on economic security in the region and help shape the regional agenda for these matters. And if Trump is reelected in November, they also should underscore the value of regional resilience and stability to economic security.     

Jane Mellsop is the Director of Trade, Investment, and Economic Security at the Asia Society Policy Institute in Washington, D.C.

Mariko Togashi is a Visiting Research Fellow at the Institute of Geoeconomics (IOG).