A transformation of U.S. national security policy is underway. It’s practically a sleight of hand: While observers have been transfixed by the slugfest between the United States and China, a much more subtle and invidious shift is taking place, one that has sweeping implications. The Trump administration’s equation of national security with economic security makes sense — if done carefully and with careful attention. Neither appears to be the case.
Traditionally, national strength reflected hard power — a nation’s military capabilities. Economic success was an important factor in calculating a country’s power, but national wealth was key to building a more effective military. The Meiji-era Japan crystalized this mindset as fukoku kyohei, or “rich nation, strong army.” Thinking about power has matured and we now recognize that there are other ways both to secure the nation and exercise power in the international system. Still, few countries — no matter how successful or wealthy — have been willing to bet their survival on those alternatives and dispense with their military.
Economic success was invariably built on technological achievement, which yielded another connection between wealth and the military: Those advances improved war-fighting capability. That relationship between wealth and military power has, for the past half century, been codified in policies that sought to limit the transfer of technology that could confer military advantage.
Strategic trade controls, often called “export controls,” denied adversaries access to technology with military applications or, in trickier cases, those that could be employed by both civilian and military sectors — “dual use” goods. There have been ugly disputes over strategic trade controls — Japan and the U.S. got into a particularly nasty fight in 1987 when a Toshiba subsidiary exported machine tools to the Soviet Union that allowed Moscow to build quieter submarines — because of U.S. concern that allies did not appreciate how a fixation on corporate profits undermined their own security.
The U.S. administration of President Donald Trump has embraced technology controls with a worrying enthusiasm, especially in its escalating conflict with China. It has imposed sanctions against Chinese tech companies, like telecommunications giant Huawei, denying them access to U.S. markets and technology, and demanding that U.S. allies and partners do the same.
While China does engage in unfair trade practices and Beijing sees the U.S. as a competitor if not a threat, the Trump administration’s use of sanctions has been indiscriminate. It looks like sanctions are the cure for most of the country’s economic problems. Job losses? Sanctions. Intellectual property theft? Sanctions. Persistent trade imbalances? Sanctions. Richard Haas, president of the U.S. Council on Foreign Relations, calls it “sanctions madness.” “Economic carpet bombing” might be more appropriate.
The Trump administration is guided by the belief that “economic security is national security.” Trump made that simple declaration in October 2017 and it begins the section on “American Prosperity” in his administration’s National Security Strategy. Economic security is a vital component of national security and international law concedes as much, for example recognizing a government’s right to invoke national security to breach its treaty obligations. That right extends from the logic explained above: A country can’t be forced to trade if doing so will provide the recipient an advantage in a conflict. Free trade agreements don’t oblige combatants to sell each other ammunition. A government doesn’t have a blank check to assert that exemption, however, as the World Trade Organization ruled last year.
In addition to the frequent resort to sanctions, the Trump administration has dispensed with the previous military focus of technology controls and is now intent on denying access to technology that it considers important to economic development, regardless of its application. This is a radical reorientation of U.S. policy and a foundational shift in thinking about national security. In the past, this policy was called “technonationalism;” that word is enjoying a renaissance although you sometimes hear “geotechnology” today.
This new approach is ratified by the Export Control Reform Act (ECRA) of 2018, which calls for new controls on “emerging and foundational technologies” that are essential to the national security of the United States. The Bureau of Industry and Security (the part of the Commerce Department that implements ECRA) identified 14 categories of emerging and foundational technologies that are essential to national security: They range from artificial intelligence to 3D printing. It is not yet clear how broad (or narrow) the restrictions will be.
China encourages an expansive approach with its Civil-Military Fusion program, a government effort to ensure that all science and technology innovations simultaneously advance economic and military development. Tim Morrison, who worked in the Trump White House, explained that “the Chinese have said to us, ‘anything you give to us for a commercial purpose is going to be given to the military,’ (so) what point is there in maintaining a distinction in our export control regulations?”
The implications of this evolution are profound. Most broadly, it is a repudiation of old thinking about economics and competition between states. Economics is no longer a means to just support war. Rather, economic dominance is the goal of great-power competition, and economic tools are the best means to achieve that objective. In this world, the U.S. should deny access to cutting edge technology to any country to preserve its pre-eminence. That is a sharp divergence from traditional U.S. policy, which has been guided by fidelity to a liberal and open global economic order.
Before succumbing to that temptation, however, the U.S. must consider the consequences. Chad Bown, a fellow at the Peterson Institute of International Economics, warns that export controls of this type threaten U.S. national security because they could cut the U.S. off from the collaboration and innovative potential that have sustained its dynamism and made possible its leadership in emerging industries and on the frontiers of the economy and high-technology.
The new approach demands a new mindset from the private sector, and not just that of the United States. Any company anywhere that wishes to work with U.S. counterparts on leading technologies must acknowledge and internalize this logic. Those businesses must prepare strict controls and compliance mechanisms to ensure that they are legally able to work with U.S. partners, protecting intellectual property and restricting access to newly restricted technologies. This is going to be far more extensive than they imagine.
Finally, U.S. allies and partners must not be sanguine or blase about this shift. Washington has traditionally included them in its technological corral, reasoning that the free flow of ideas and resources among them was a benefit to U.S. global standing and security. That logic is being challenged, if not eroded, by the new nationalism.
Nor is this risk purely theoretical: It is evident in decisions to impose sanctions on imports of aluminum and steel from countries like Japan, South Korea and Canada. The most extreme version of technonationalism is unlikely to survive the current administration, but warning bells should be ringing in Tokyo and other allied capitals.
Brad Glosserman is deputy director of and visiting professor at the Center for Rule Making Strategies at Tama University as well as senior adviser (nonresident) at Pacific Forum. He is the author of “Peak Japan: The End of Great Ambitions.”