While the last decade has seen a renewal of interest in the age-old practice of using economic means to pursue foreign policy goals, there is no consensus on the kind of economic statecraft the United States should now be practicing.
Writing in the Fall 2023 edition of The International Economy, Robert D. Atkinson argues that with the increasing centrality of the techno-economic challenge from China, it’s time to move from an Economic Statecraft 1.0 premised on using U.S. strength to support friends and punish adversaries, to an Economic Statecraft 2.0 premised on husbanding U.S. strength while limiting the relative techno-economic advance of China.
That would entail:
- Pushing back against other nations’ mercantilist practices targeting key innovation industries.
- Limiting technology export controls.
- Broadening CFIUS.
- Doing more to block imports of Chinese goods and services that benefit from innovation mercantilist practices.
- Empowering the U.S. Export–Import Bank.
- Establishing a NATO for trade to coordinate actions against Chinese economic aggression.
- Abandoning strong-dollar policy.
Read the article. (PDF)
