Table of Contents
In Economic Security, Trade-offs Abound
Policymakers are facing complex cost-benefit considerations when intervening in the market to mitigate perceived risks, from climate change to competition with China. The vulnerabilities exposed during the pandemic and their associated geopolitical risks moved policymakers, especially in the United States, to embrace government intervention as a means of promoting supply-chain resilience and self-sufficiency. However, difficult political trade-offs hinder progress on U.S. industrial policy on health, and the costs are significant. Meanwhile, the trade-off with climate change is between costs now and costs later, and the costs of worsening climate catastrophes fall on everyone, but the poorest nations and their future generations pay the steepest price. Strengthening economic security has become a shared pursuit among major global economies, but differing domestic circumstances and dependence on the Chinese market and suppliers mean that the United States and its allies will inevitably have different approaches to strengthening their respective economic security. The creation of a robust and enduring international-trade regime was the main vehicle by which the Franklin D. Roosevelt administration hoped to end economic aggression, but those arrangements involved difficult trade-offs.
