proposal

Economic Security Under Trump 2.0 :
A Shift in Values and Changing Options

Introduction

The US National Security Strategy (NSS2025), published in December 2025, formally and systematically articulated the second Trump administration's emphasis on economic security.1 It is apparent, however, that the first Trump administration was also strongly aware of a series of related issues, even if it rarely used the term "economic security." The fact that this policy line has been pursued since the first Trump administration, with the Biden administration in between, indicates that the United States is structurally compelled to address economic security issues.

However, the second Trump administration's economic security policy has some peculiar characteristics. First, it is implemented swiftly by successive executive orders based on the International Emergency Economic Powers Act at the expense of domestic consensus, legality, and signaling to other countries. Second, the second Trump administration's economic security policy is more than preparedness for aggressive economic statecraft by countries of concern; rather, the administration is becoming more inclined to unleash policy measures, aimed not only at countries of concern but also at allied nations. This article is intended to review the first year of the second Trump administration, focusing on executive orders, and to examine the background to the emergence of these characteristics.

1. Comprehensive Policy for Strengthening Economic Security

A Department of Defense report, "Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States," published in 2018, is eloquent about the fact that since his first presidency, Trump has been keenly concerned about the weakening of supply chains, domestic manufacturing, and the innovation base.2 The potential risks to the United States mentioned in this report overlap with concerns about US economic security that have been inherited from the Biden administration. The second Trump administration is working out various measures to address those risks.

One of such measures is the continued strengthening of supply chains. The Trump administration aims to mitigate supply chain risks, particularly in sectors such as semiconductors, AI, and shipbuilding, and has, to this end, built bilateral and multilateral cooperative relationships. In advanced technology fields, for example, the Trump administration is working with the UK government on joint research and development, data sharing, infrastructure development, and human resource development in such sectors as AI, civil nuclear power, nuclear fusion, and quantum technology, while simultaneously promoting deregulation to accelerate innovation.3 The administration has also concluded technology cooperation agreements with Japan and South Korea in similar areas, seeking to protect supply chains and to develop key emerging technologies.4 It is also seeking cooperation in the shipbuilding sector, where the United States faces a capacity shortage. Unilateralism does not necessarily prevail in all areas.5

The US government's economic security efforts extend beyond strengthening supply chains of goods to include unilateral and multilateral responses associated with domestic and foreign investment regulations and research security. However, these efforts are not peculiar to the Trump administration but are a continuation of the policies from previous administrations.

These initiatives to reorganize supply chains from the perspective of economic security are beneficial to the United States and to like-minded countries that share similar threat perceptions. However, the Trump administration's parallel pursuit of non-reciprocal deals has made policy choices increasingly difficult for allied and friendly nations, especially middle powers.

One of the problems, as discussed in Section 3, is that many of the bilateral agreements aimed at ensuring economic security have been intertwined with the issue of tariff settings. The United States and its allies share common objectives and interests, but conflict over so-called "relative gains"—or, more specifically, power-based pressure—is becoming increasingly conspicuous.

Another problem is the failure of the United States and its allies to share underlying values in international cooperation on R&D and the regulation of AI and other emerging technologies. There is no doubt that there exists a common understanding among major countries regarding the importance of AI. Yet, the Trump administration's denial of the EU's traditional values and its ban on "Woke AI" (AI that reflects liberal values)6 by executive orders represent a burgeoning divergence among the United States and like-minded countries in underlying values that are emphasized in today's R&D and regulation. In this context, the EU and the UK will face the question of what normative stance to adopt and how to balance their own interests with it. Recently, Japan has also shifted toward a hard law approach in the field of AI in cooperation with the United States. But it will likely face similar challenges due to bilateral asymmetries in development and operational capabilities.7

2. Accelerating Responses Surrounding Energy and Critical Minerals—A Shift in Underlying Values

Thus, the second Trump administration is evolving its economic security policy on multiple fronts, domestically and internationally; systemic supply chain restructuring, particularly in the areas of energy and critical minerals supply, is accelerating. The Trump administration is highly conscious of these issues; in February 2025, shortly after its inauguration, it declared a "National Energy Emergency"8 and established a "National Energy Dominance Council" with the aim of maximizing US energy production.

Regarding critical minerals, the Trump administration has also reached agreements with more countries: it has so far concluded cooperative frameworks with resource-rich countries such as Australia, Saudi Arabia, Thailand, and Malaysia for ensuring a stable supply of critical minerals and rare earths, thereby aiming to facilitate investment and deregulation, strengthen national security screening, and secure exports to the United States.9 In December 2025, the United States advocated a US-led initiative, "Pax Silica." Seven countries signed a declaration aimed at building trustworthy partnerships regarding critical minerals, energy, semiconductors, advanced manufacturing, and AI. In February 2026, a ministerial-level meeting attended by 55 countries, including Japan, called for the establishment of a trade partnership for critical minerals.10 This suggests that the US-envisaged critical minerals supply chains aim not only to enhance US economic security unilaterally, but also to establish economic blocs.

While promoting international cooperation regarding energy and critical minerals, the Trump administration has endeavored to increase America's self-sufficiency in a wide range of resources, including rare earths, copper, coal, and LNG. Regarding energy supply, the administration has taken measures to accelerate the revitalization of nuclear power sources, given rapid increases in electricity demand due to the development and spread of AI and the risks associated with dependence on foreign countries for energy supply.11

Importantly, these efforts are designed to promote economic security at the cost of the environment and safety: regulatory relief has been granted for copper smelting and taconite iron ore processing―some executive orders refer to environmental considerations just for show.12 To enhance domestic resource development capabilities, regulatory relief was also announced for the development of Alaska and America's offshore minerals and resources.13 On the other hand, green energy was judged unreliable and capable of helping dependence on foreign countries for energy supplies, and a decision was made to end subsidies for this sector.14 Regarding nuclear power, the Trump administration demanded the Nuclear Regulatory Commission's organizational reform and a review of the NRC's safety standards, asserting that the radiation regulatory standards set by the NRC are irrationally strict.15

In issuing these orders, President Trump has argued for the rationality of regulatory relief, declaring current regulations as "punitive," "technically impossible to comply with," and "increasing US economic security risks." Putting the validity of these arguments aside, the series of deregulations will at the very least result in a reduction of the long-standing safety margins. Similar deregulations have also been introduced in the domestic chemical manufacturing sector.16 Under the second Trump administration, the priority given to environmental and security risks has declined, which is not limited to energy and critical minerals. This shift is reflective not only of the President's personal beliefs but also in actual policy decisions.

3. Economic Statecraft and Pressure on China

A distinctive feature of the second Trump administration's economic security policy is its active use of economic measures as a tool to mount diplomatic pressure. Stephen M. Walt describes the administration's foreign policy style as "predatory hegemony."17 The administration selected tariffs as a favorite tool, repeatedly using them to compel other countries to make concessions by restricting access to the US market.

There is no doubt that the second Trump administration continues to consider China as the primary economic security threat and to take measures to address it. Its policy of protecting its supply chains through export controls and investment restrictions while exerting pressure to impede China's enhancement of capabilities in semiconductors, AI, or across all fields of scientific research is consistent with that of the Biden administration. However, at the same time, the second Trump administration's economic statecraft is distinct in some respects from that of the predecessor.

First, while viewing China as the foremost threat, the Trump administration makes deals with it based on specific judgments on the nature of individual issues and interests, not necessarily on the level of interstate rivalry. The opioid issue is a prime example. Since taking office, the Trump administration has prioritized addressing the influx of opioids and other drugs. The administration has consistently strengthened its response, referring to fentanyl as a "weapon of mass destruction."18 In February 2025, the Trump administration urged China, one of the alleged suppliers of opioids, to take necessary action and subsequently increased tariffs on imports from China on the grounds that the country failed to take sufficient measures. Later, the Trump administration lowered the raised tariffs, in a gesture of commending China's subsequent response.19 This US economic statecraft regarding the opioid crisis reflects President Trump's distinct approach: rather than sticking to a traditional ‘ally vs. adversary' framework, goal-oriented policy measures are formulated around the specific problems President Trump believes he should personally handle and the interests associated with them. As discussed later, this approach is applied to allies as well.

Chip export control standards also appear to be increasingly subject to economic interests. Since the Biden administration, the United States has attempted to prevent China from developing its AI capabilities by restricting China's access to advanced semiconductors. A January 2026 Department of Commerce decision reversed this policy and approved the transfer of Nvidia's H200 and AI semiconductors of equivalent level, which had previously been banned from export to China.20 This move was accompanied by provisos that efforts should be made to maintain the US advantage by taking into account economic security risks, by ensuring domestic supply, and by prohibiting their use for military purposes. Nonetheless, there are strong concerns in the United States about the national security risks that could attend advanced AI chip exports.21 These cases suggest that even in the semiconductor sector, a major bone of contention in today's economic security issues, national security risk standards are being relaxed in consideration of industrial interests. That said, only future developments will determine whether the risks remain at an acceptable level for the United States.

These cases suggest that certain compromises, which would at times appear to be appeasement toward China, could be made when they contribute to resolving problems for the United States or to increasing its trade benefits. Unlike US-Soviet relations during the Cold War, US-China relations in the realm of economic security are no longer considered a matter of "non-negotiable" values. Instead, they are increasingly characterized as a diplomatic issue in which a certain degree of adjustment of interests is possible.

4. Weaponizing the Economy Against Allies and Friends

Another distinctive feature of economic statecraft under the second Trump administration is its frequent use against allies and friends. Under the Biden administration, US government spending aimed at ensuring economic security, such as EV subsidies under the Inflation Reduction Act and semiconductor investments under the CHIPS and Science Act, bore the nature of industrial policy, drawing criticism not only from countries of concern but also from allies. Unlike such side effects, the Trump administration's economic statecraft assumes a more deliberate and predatory form of pressure against allies.

As reciprocal tariffs shocked the world, numerous papers have already been published to discuss them. What is important is that President Trump has begun to use tariff rates not merely to adjust trade balances but also as leverage in diplomatic negotiations. As mentioned earlier, the Trump administration is focusing on combating the influx of drugs, urging Canada and Mexico to take stringent measures to prevent the entry of drugs through the northern and southern borders. Notably, the administration attempted to elicit concrete measures by threatening to impose additional tariffs if their responses were insufficient.22 A similar approach was also adopted toward European countries regarding the Greenland issue. President Trump has repeatedly advocated purchasing Greenland, going so far as to suggest its military annexation, citing the need to "protect" it from potential threats posed by China and Russia. The use of additional tariffs to pressure Greenland and European countries opposing this move represents another example of the Trump administration's coercive diplomatic style.23

The diplomatic pressure exerted by the second Trump administration, utilizing tariffs as leverage, has highlighted the fact that the logic of power in the realm of economic security applies not only to the United States and countries of concern but also between the United States and its allies. This means that, for its allies, the United States is not only a partner in ensuring economic security; it could also emerge as an entity capable of posing economic security risks to them.

Conclusion

The economic security policy of the second Trump administration has been comprehensively but forcefully implemented under the leadership of President Trump. Its features may be summarized as follows. First, the second Trump administration's economic security policy fundamentally aims to address potential threats from China and Russia, but it is not one excluding any room for negotiation. An occasional conciliatory approach toward China could be an option when seeking a balance between security and interests.

Second, the series of policy measures bracketed under economic security is often becoming blurred as to whether they are aimed at national security or economic interests; furthermore, those policy measures have come to be implemented in a manner to exert direct pressure on allies and friends. Consequently, the "US risk"—a concern that had already surfaced during the first Trump and Biden administrations—is now assuming a more intentional and direct form.

Third, another significant characteristic is that such cases are increasing where, in exchange for strengthening supply chains, the domestic environment is sacrificed due to deregulation. President Trump dismisses the targeted existing regulations as "unjust," but these regulations should have played some role in protecting the domestic environment.

These policy measures are only possible if fundamental values ​​in American politics change. The US-China structural rivalry, relations with allies, and values upheld domestically―if these things that have underpinned American politics and diplomacy are now transforming, it can be said that the policy options available to the United States are also changing.

Although this may bring short-term economic security and economic benefits to the United States, it will also give rise to side effects at home and internationally, such as a discrepancy in values ​​with allies and increased environmental impact. It remains to be seen whether these changes will be temporary or persist beyond the changes of government. In the long term, they could further weaken America's unifying force.

Japan and other allied nations need US-led security cooperation. Meanwhile, they will face the dilemma of remaining dependent on the United States embracing different ideas than before. In other words, when deliberating policy measures, they will be required to evaluate whether they can share underlying values with the United States, rather than just focusing, as in the past, on immediate military and economic objectives. Canadian Premier Carney's speech succinctly illustrates this situation. It will not be easy for middle powers to regain their autonomy, at least in the realm of ​​economic security.

(Kousuke Saitou, Professor, Sophia University )

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