How America Can Counter Chinese Coercion: The Case for an Economic Security Alliance
Foreign Affairs · Theodore Bunzel, Edward Fishman, and Addar Levi ·
The case for an economic security alliance.
Over the past year and a half, China has shown the world the power of its economic arsenal—starting with the United States. In April 2025, Beijing retaliated forcefully against U.S. tariffs, imposing matching across-the-board levies and export controls on rare-earth elements. This counterpunch rattled bond markets and disrupted auto supply chains, forcing Washington to seek a truce that persists to this day.
Next, China targeted Japan. After Japanese Prime Minister Sanae Takaichi described a potential Chinese naval blockade of Taiwan as a “survival-threatening situation” that could justify deploying Japan’s Self-Defense Forces, in November 2025, Beijing imposed suffocating bans on rare-earth exports to the country. Reluctant to reinflame tensions with Beijing, Washington offered nothing more than token support. Tokyo has held firm, refusing to walk back Takaichi’s statement; the restrictions remain in force, and Japan’s mineral stockpiles are dwindling.
Then Europe came under fire. Fed up with a trade deficit with China that had reached $1.1 billion per day, the European Union began exploring new tariffs to counter Chinese overcapacity in May. As China threatened “resolute countermeasures,” French President Emmanuel Macron urged U.S. President Donald Trump at the G-7 summit in June to join forces in addressing global imbalances. But the United States elected to sit on the sidelines again, and Europe blinked, opting for talks with Beijing, with an October deadline set by Europe to take concrete steps toward reducing China’s trade surplus. The EU has since been in tense negotiations with Beijing over reducing exports of hybrid vehicles, chemicals, and machinery, taking on the threat of Chinese retaliation alone.
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