Think Tank: Trump Should Negotiate New Economic Security Deals Focused on Trade Controls
The Trump administration should look to negotiate new types of economic and trade deals that are centered on economic security issues, such as export controls and investment screening measures, the Center for a New American Security said in a new report this week. The think tank also called on President Donald Trump to create an economic security strategy, which should outline avenues to strengthen export control enforcement.
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The 52-page report, authored by multiple CNAS researchers, offers policy recommendations for Trump’s first 100 days in office, ranging from personnel hiring, technology competitiveness and national security measures. One portion of the report, written by Emily Kilcrease and Geoffrey Gertz, says the “existing international economic order” doesn’t do enough to “distinguish” U.S. trade with adversaries and trade with close allies, and it should be restructured through the use of new, negotiated economic security agreements.
Although this new type of agreement should focus on strengthening market and export opportunities in certain critical sectors -- including those where the U.S. is looking to reduce its dependence on China -- CNAS said a “key element” of these deals should also be the “integration of defensive, national security-focused tools and proactive market access tools.”
A “new economic security agreement model would recognize that policy tools such as export controls and investment screening are central to the trust that trading partners can have in each other, and it will develop specific modalities for strengthening alignment on these types of policies,” CNAS said.
The agreement can be negotiated as a standalone deal or integrated into existing ones, such as USMCA, the think tank said. It should also include “binding trade and investment rules” designed to create market opportunities for each side, which would “offset” any “competitive losses” they could experience from reduced access to China’s market or supply chains.
The Trump administration should ask Congress for a new trade promotion authority for deals that prioritize economic security “objectives,” the report said, which would help fast-track a congressional vote on economic security agreements negotiated by the administration. Trump should also begin to launch “exploratory economic security agreement talks” with close security allies, including the U.K., Australia and Japan, the think tank said.
It added that the U.K. has been particularly “eager” to strengthen economic ties with the U.S. since its withdrawal from the EU, and the Biden administration’s work to reduce export controls as part of AUKUS (see 2412040044) “already has resulted in some cooperation on economic security issues” with the country. CNAS said Australia will also be a “crucial partner in diversifying critical mineral supply chains away from China” and has experience combating Chinese trade coercion (see 2412200013), and Japan, a “key player” in the semiconductor industry, “has long sought to ink a trade deal with the United States.”
CNAS also pointed to the EU, which is a key economic security ally but could pose challenges to a possible economic security deal because of the “complex mix of authorities” across all 27 member states. The Trump administration should aim to sign such a deal with the EU by “midterm,” CNAS said, and also should look to reboot the U.S.-EU Trade and Technology Council (see 2411130045) under a new mandate to focus on a “narrower set of issues to drive to resolution within specified time periods.”
“The forum also must be structured to compartmentalize issues,” CNAS said, “so that tariff disputes do not obliterate the possibility of advancing progress on shared economic security priorities.”
Another portion of the think tank's report calls on the Trump administration to create an economic security strategy, which would provide a clear “articulation” for U.S. policy plans around export controls and similar trade tools. “Defining policy objectives through a strategy document will help bring discipline to the various government agencies and political appointees who will need to work together to deliver this policy agenda,” it said.
One element of this strategy should be aimed at strengthening export enforcement, CNAS said. Although there “has been much focus” on new export restrictions in recent years, it said they are “only effective if government officials can credibly enforce them.” But CNAS said U.S. “enforcement too often falls short,” citing the fact that export-controlled semiconductors and other microelectronics have continued to be supplied to China and Russia (see 2412190033).
“The economic security strategy should outline practical steps to strengthen enforcement to prevent bad actors from smuggling products that are export controlled, evading sanctions, and dodging tariffs by illegally transshipping goods through third countries,” CNAS said, adding that this may mean giving the government more resources to track and catch evasion.
“Government officials have long complained about the outdated and cumbersome IT networks they are forced to rely on, while the private sector has made great strides in developing artificial intelligence (AI) and other analytic tools to derive insights from large data sets and better predict outcomes in complex systems,” the report said. “The strategy should identify pathways to bring similar capabilities inside government.”