The “Economic Security is National Security” Strategy

The latest regulatory developments on economic security & geoeconomics

By Paul Nadeau, Visiting Research Fellow, Institute of Geoeconomics (IOG)

EU Agrees to Block Russian Gas: On December 3, the European Union reached an agreement to phase out imports by late 2027 to eliminate European dependency on Russian energy. Under the agreement, short-term contracts will be prohibited beginning on April 25, 2026, long-term contracts will be prohibited beginning in October 26, liquefied natural gas (LNG) imports will be phased out by the end of 2026 and pipeline gas by the end of September 2027. EU members will be required to submit “national diversification” plans regarding their oil and gas supplies to the European Commission by March 1, 2026, and will be required to notify the Commission whether they have Russian gas supply contracts or national bans in place. Hungary opposed the move and will challenge the agreement at the EU’s Court of Justice on the grounds the agreement was wrongfully disguised as a trade policy in order to prevent a unanimous agreement which is typically required for sanctions legislation. Slovakia is also reported to be considering its options.

U.S. Treasury Department Extends Tren de Aragua Sanctions: On December 3, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions on affiliates of Venezuela’s Tren de Aragua (TdA), a transnational organized crime syndicate that is a foreign designated terrorist organization by the U.S. government. The action includes Venezuelan entertainer Jimena Romina Araya Navarro (a.k.a. “Rosita”), who is part of a network of five persons affiliated with the entertainment industry that have provided material support to TdA.

UK Sanctions Russia’s GRU: On December 4, the UK government announced that it would sanction Russia’s military intelligence directorate, commonly known as the GRU, in its entirety. The announcement follows the results of the Dawn Sturgess Inquiry report which found that Russian President Vladimir Putin personally ordered the GRU’s June 2018 operation to target former Russian military officer Sergei Skripal with the chemical agent Novichok in Salisbury, UK and which was found to cause the death of Dawn Sturgess, a UK citizen unconnected to Skripal.

U.S. Blocks Salt Typhoon Sanctions to Protect China Deal: According to the Financial Times, the United States halted plans to sanction China’s Ministry of State Security over a cyberespionage campaign known as “Salt Typhoon” in order to avoid derailing the trade truce between U.S. President Donald Trump and China’s Xi Jinping.

Australian Government Targets Russia’s Shadow Fleet: On December 4, the Australian government announced sanctions on 45 vessels linked to Russia’s shadow fleet that is used to circumvent sanctions on Russia’s oil exports, bringing the total of sanctioned vessels to 200.

Analysis: The “Economic Security is National Security” Strategy

By Andrew Capistrano, Visiting Research Fellow, IOG

The 2025 US National Security Strategy (NSS) is by most accounts a radical policy document. Since it was released last week, much has been made of the NSS’s controversial tone, the explicit return of the Western Hemisphere as the “center of gravity” for US strategy, the shifting language on Taiwan, the integration of immigration policy into national security, and most of all the unusual civilizational framing and sharpened critique of Europe. While those elements have rightfully drawn attention to the NSS, a careful reading suggests a deeper and more fundamental recasting of American power in the world. In fact, the entire document appears to flow from two overarching concepts: that the era of “globalism” is over; and thus, the US has entered a new era in which “economic security is national security”.

From its first page the NSS is blunt in its assessment of US foreign policy elites since the end of the Cold War. The Trump administration believes they “badly miscalculated” the connection between “forever global burdens” and the “national interest”, and “placed hugely misguided bets on globalism and so-called free trade that hollowed out the very middle class and industrial base” that underpins American power. Such framing reflects the “America First” and “economic nationalist” views of the Trump base, but also tries to translate this into something resembling a theory of international statecraft. Though this point is not developed explicitly, the NSS’s critique of “globalism” suggests an awareness that as the “unipolar moment” transitions to multipolarity, the US must get its own house in order if it is to uphold its security interests — and urge its allies to get their houses in order as well.

Here is where the idea that “economic security is national security” becomes relevant. This slogan has circulated throughout Trump’s second term in speeches and media interviews, but the NSS represents the first time that it has been formally written into US strategy. “Hemispheric security” has returned as the geographic foundation of US power; likewise, “economic security” is presented as its geoeconomic analogue. The usual caveats apply as to whether or not the NSS’s economic security approach is feasible, however the significance of this directional shift should not be lost among the document’s more sensational adjustments.

Four of the 12 national objectives presented in the NSS have an economic security focus: to have the world’s strongest and most innovative economy; the most robust industrial base; the most productive and innovative energy sector; and technological leadership in frontier domains including AI, biotech, and quantum. No recent NSS has defined American power so materially. Where earlier doctrines saw the US economy as an instrument for sustaining global commitments, the new strategy treats foreign policy as the expression of domestic strength and elevates productive capacity as the core prerequisite of national security.

In some ways, this extends the reindustrialization and supply-chain resilience themes present in the Biden administration’s 2022 NSS. Yet the 2025 NSS goes much further in formulating an economic security strategy for an age of great-power competition, which will be undertaken in a world forecasted to be fractured by supply chains, capital blocs, currency competition, and technological chokepoints. Of course, the US military still matters — but the arsenal of 2035 will be built not only with factories and steel, it will also require semiconductor fabs, critical minerals, nuclear power plants, and AI clusters.

What is most striking is the amount of space dedicated to economic security in the NSS. Of the four-page “priorities” section, the economic security bullet point occupies a full two pages. In the Asia section, economics is called “the ultimate stakes”, and is more than twice as long as the “deterring military threats” subsection. True to Trump’s preferences, the “strategic use of tariffs” and reciprocal trade agreements are presented as a means for reindustrialization and shaping investment flows, where private capital allocates resources to meet government-defined national security objectives. If taken seriously, the NSS suggests Washington is preparing for an era where economic statecraft is the primary arena of competition.

This impression comes across in each of the NSS’s regional sections. Much has been written about the NSS’s Western Hemisphere focus and the new “Trump Corollary to the Monroe Doctrine”, but even this is best understood through an economic security lens. The priority is not merely the strategic denial of adversaries. Rather, the US also aims for “economic denial” so the region can evolve into a secure production zone, removing adversarial foreign ownership of key assets, embedding critical supply chains, and supporting US reindustrialization. Executing the hemispheric economic security agenda will require public-private partnerships with US companies operating in important regional countries. The NSS makes it clear that development finance institutions like the DFC and Export-Import Bank, combined with what it calls a return to “commercial diplomacy”, can also serve as levers to “expand” and “enlist” Latin American nations into US-aligned supply chains.

If operationalized, this approach would aim to “re-shore” production to the hemisphere at large, provided Chinese regional influence is reduced. It will be interesting to see if these concepts resurface during next year’s renegotiation of the USMCA trade deal.

Turning to the Indo-Pacific, the NSS explicitly states that the US had three decades of mistaken assumptions about relations with China, most importantly that economic integration would facilitate China’s entry into the rules-based international order. To correct this, the NSS asserts that trade with China should be “balanced and focused on non-sensitive factors”. Many commentators have honed in on the phrase “maintaining a genuinely mutually advantageous economic relationship” with China, but they seem to be overlooking the emphasis on “genuinely” and “mutually” in this sentence. Taken in the context of the rest of the section, this appears to be more of a best-case scenario.

Far more relevant to actual China policy are the NSS’s two economic security dimensions for enhancing deterrence, via what it calls a “virtuous cycle” — where deterrence “opens the space for more disciplined economic action”, which in turn leads to greater US resources to “sustain deterrence in the long term”.

First, the US will “protect and defend” its economy from “any country or source”, although the bullet-point list that follows is an obvious reference to China. It includes opposing “state-directed subsidies and industrial strategies”, unfair trading practices, IP theft, threats against supply chains that “risk US access to critical resources”, and exports of fentanyl precursors.

Second, the US aims to work with allies and treaty partners to counter “predatory economic practices”, leveraging their “combined economic power”. In other words, what have hitherto been security alliances are being reconceived as economic coalitions capable of rebalancing China’s model. Persistent US trade deficits are referred to as strategically unsustainable, and the NSS calls explicitly for Europe, Japan, Korea, Australia, Canada, and Mexico to shift trade policy toward a coordinated push with the US that helps to “rebalance China’s economy toward household consumption”. Trade relations with India are similarly framed, suggesting it is welcome to join the allied economic coalition.

The NSS warns US trading partners they should no longer expect to profit from “overcapacity and structural imbalances”; instead, economic growth models should be pursued through “managed cooperation tied to strategic alignment” and long-term US investment. But in this context allies are also offered an opportunity to form a bloc that uses “comparative advantages in finance and technology to build export markets with cooperating countries” in Africa and Latin America. These potential partners will be presented with a “suite of inducements” including high-tech cooperation, defense sales, and access to US capital markets. The proposal is intriguing, with US alliance management being defined in geoeconomic rather than military terms.

Such a perspective seems to be countered by the harsh cultural language with respect to Europe. That being said, the NSS presents at least an equal level of anxiety regarding the security implications of European economic policies. Behind the rhetoric of “civilizational self-confidence” there is also deep concern that European regulatory structures and insufficient competitiveness are making the continent less innovative — and thus less capable as an ally. Europe’s strategic value now rests on whether it becomes a productive, technologically advanced partner rather than a beneficiary of US defense commitments. In terms of economic security, the NSS is essentially asking Europe to get off the fence and pick the US side amid heightened geoeconomic competition.

Moreover, the NSS hints that Europe’s declining share of world GDP may have the adverse effect of centering US-European relations more in cultural, historical, and even “civilizational” terms than aligned geopolitical or national interests. This conditionality surely reflects the ideological character of the Trump administration, however the economic factors underpinning it are an uncomfortable reality that Europe cannot dismiss outright, given that the challenge would be exacerbated if JD Vance becomes the next US president.

The economic security framing holds for the other two regions covered in the NSS, both of which are also being recast according to the new logic of “commercial diplomacy”. In the Middle East, democracy promotion has been abandoned. The Gulf states are now seen in terms of FDI and technology sales, not as oil suppliers, and as potential partners for new infrastructure and supply chain networks. Engagement with Africa has been recast from “aid-focused” to “trade- and investment-focused”, with an emphasis on critical minerals and other natural resources. US strategy toward both regions has moved decisively away from what the NSS calls “liberal ideology” toward material interests.

Finally, the NSS notes two significant economic security capabilities that may define future strategic competition. First, the NSS makes numerous references to the US financial system, capital markets, and the dollar’s reserve currency status as strategic tools. It even mentions helping developing countries deepen their own capital markets and “bind their currencies more closely to the dollar” as a national security interest. This is a blueprint for a dollar-centric development architecture, anticipating that the next decade of competition may be fought less with weapons than with lending terms, swap lines, and digital payment rails where the US will remain indispensable. Second, energy repeatedly comes up as essential to reach the US’s reindustrialization, digital infrastructure, and production capacity goals. From oil and gas to a revival of nuclear power, it is clear that the NSS has positioned abundant energy supplies as the driving force behind US strategic autonomy.

Critics will argue the NSS reflects retrenchment, and in a sense, they are not wrong. But the NSS rejects global domination, while insisting America must prevent others from achieving dominance in strategic regions. It narrows US security obligations, yet aims to build deeper economic coalitions with allies and partners. And it calls for putting “America First” when simultaneously mobilizing financial and industrial power as a force for international influence. Therefore, the better critical lens may be strategic prioritization. Indeed, if the last paradigm for US national security was military preeminence to sustain global leadership, the new paradigm may be “economic security is national security” — or economic preeminence to secure national power.

（Photo Credit: Shutterstock）

Disclaimer: The views expressed in this IOG Economic Intelligence Report do not necessarily reflect those of the API, the Institute of Geoeconomics (IOG) or any other organizations to which the author belongs.

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