Economic Security

Occasions of the shift

Economic security names a policy paradigm that manages trade, technology, supply chains, and investment inside a national security framework. Its content is the shift from a phase that optimized the international division of labour by efficiency to one that takes resilience and controllability as its criteria.

Three occasions are identified. The US-China trade conflict of 2018 defined technological advantage as a security question, the COVID-19 pandemic of 2020 exposed the fragility of supply chains in medical goods and components, and the war between Russia and Ukraine in 2022 demonstrated the possibility of weaponizing energy and food.

Instruments

Responses converged on a similar combination of instruments: export controls blocking the transfer of particular technologies and equipment, investment screening restricting acquisitions in strategic sectors, subsidies building domestic capacity, and tariffs and rules of origin steering the reorganization of supply chains.

Institutional forms differ by country. The United States institutionalized the paradigm through the CHIPS Act, the Inflation Reduction Act, and export controls on China; China through Made in China 2025 and rare-earth export controls; the European Union through its Economic Security Strategy and related regulation; and Japan through its Economic Security Promotion Act. South Korea sits in a position exposed simultaneously to both export controls and subsidy policy in semiconductors and batteries.

Points at issue

The paradigm carries structural tensions. First, the cost of resilience: reorganizing supply chains onshore or among allies raises production costs, and the burden transfers to prices and public finance. Second, the problem of scope: because the boundary of security-related sectors is not clear, there is wide room for protectionism to be justified in the language of security. Third, the problem of interaction: if every state responds with the same logic, fragmentation accelerates and everyone's resilience may fall.

A separate question arises from a left standpoint: whether the revival of industrial policy amounts to a recovery of state capacity for public purposes or to a new form of transferring public resources to particular capitals. Whether employment and labour standards or public equity stakes can be attached as conditions of subsidy is the practical focus of that argument.