The United States entered its trade confrontation with China unprepared, a strategic lapse that should have been avoidable. When Beijing restricted access to critical minerals, Washington had no effective countermove. The Trump administration's belated push to rebuild domestic mining and processing capacity is a step in the right direction, but it arrives more than a decade after the threat first materialized. Such surprises are preventable—if the U.S. systematically tracks economic security risks before they escalate into full-blown crises. A new mechanism of country-level Economic Security Intelligence Reports could become a cornerstone of American economic statecraft.
China's 2010 decision to cut off rare earth exports to Japan during a territorial dispute was an early warning. For 15 years, Washington failed to act as Beijing consolidated its grip on critical minerals, batteries, shipping, and industrial inputs essential to U.S. manufacturing. Today, China produces 98 percent of the eight heavy rare earth elements and has again restricted access for both Japan and the United States. In June, Beijing imposed additional rare earth restrictions on key U.S. customers. The International Energy Agency estimates that full implementation of China's export controls could put $6.5 trillion in annual downstream production at risk—roughly 7 percent of global GDP excluding China.
The real surprise is not China's behavior but America's failure to anticipate it. Washington lacks a systematic framework for identifying and monitoring emerging economic security risks. This gap is increasingly untenable as economic coercion becomes a central tool of authoritarian rivals. China's mineral dominance is not a natural resource advantage—it imports raw cobalt, copper, and lithium but controls the processing market. Beijing has engineered this through state intervention: massive subsidies, chronic overcapacity, price manipulation, and lax labor and environmental standards. These practices allow unprofitable Chinese firms to undercut Western competitors, and they discourage the long-term investment needed to develop alternatives, making diversification economically irrational even when strategically essential.
Western companies cannot indefinitely sustain losses in pursuit of geopolitical influence. With Beijing tilting the playing field, Chinese firms can—and often do—outlast their rivals. This creates a self-sustaining cycle: subsidies breed monopolies, monopolies provide leverage, leverage enables coercion, and coercion reinforces monopolies. China is on track to account for 45 percent of global industrial production by 2030, swallowing an increasing share of manufacturing.
China's predation is just one facet of the broader challenge of authoritarian economics. Iran's chokehold on the Strait of Hormuz and Russia's weaponization of European gas dependence are other examples. If the United States intends to put economic security at the center of trade policy, it cannot treat fundamentally different economic systems as though they follow the same rules. A proposed “Near-Global Economy” would deepen integration among trusted market economies while reducing dependence on state-driven competitors.
To implement such a strategy, the U.S. needs a new form of intelligence: rigorous, comprehensive assessments of the economic security posture of allies, partners, rivals, and rogues. The executive branch must have the capacity to systematically collect and analyze this information. One solution is an annual, country-by-country Economic Security Intelligence Report produced by the State Department, leveraging U.S. diplomatic missions to map each nation's economic security vulnerabilities, opportunities, and strategic reliability.
The value of such reports would not lie in statistics but in answering practical questions: Which partners are quietly serving as pass-throughs for adversary capital? Which have strong legal authorities but weak enforcement? Which are becoming more trustworthy over time, and which less so? Reliable partners should demonstrate commitment to market-oriented policies, protect intellectual property, limit market-distorting subsidies, and enforce baseline labor, environmental, and antitrust standards. Washington should also assess whether partners have the legal authorities, institutional capacity, and political will to support U.S. sanctions, export controls, and anti-money-laundering laws. Partners should meet baseline standards for beneficial ownership registries and investment screening mechanisms, and they must prevent transshipment and enforce rules of origin.
The goal is not more reports or more bureaucrats—it is actionable intelligence to inform trade, investment, and national security policy. Findings could justify corrective tariffs, guide financing by the Development Finance Corporation and Export-Import Bank, and set prerequisites for defense-industrial cooperation and trusted technology initiatives. Secretary of State Marco Rubio's reorganization of the State Department has placed economic statecraft at the center of American diplomacy; the Economic Security Intelligence Report would give this effort an operational backbone.
The United States should not only grade others—it should apply the same framework to itself. Anonymous shell companies, trusts, and opaque legal structures let hostile actors disguise themselves as American businesses, undermining sanctions and anti-money laundering efforts. A self-assessment would help close these vulnerabilities and ensure that U.S. economic security policy is both credible and effective.
