Edward Hunter Christie and Mikael Wigell ask whether traditional concepts from security studies, notably the security dilemma, have relevant equivalents in the realm of geoeconomics.
Geoeconomics is the new kid on the block in international relations departments and foreign policy think tanks. Prominent research institutions on both sides of the Atlantic have launched major new programmes, networks and publications in the last few years. This accelerated interest is directly related to an unfolding paradigm shift among multiple governments concerning the very role and place of economics within foreign policy.
Concretely, we are witnessing a recasting of external economic policies, away from a market-centric view and towards a more security-oriented view. The return of Donald Trump to the White House will only strengthen this shift, although a remarkable feature of the Biden Administration was its strong continuity with the first Trump term’s geoeconomic turn against China, with measures such as tariffs on Chinese goods and investment prohibitions towards China being copied or carried over largely intact and then strengthened over time.
Understanding geoeconomics
A wide range of efforts are underway, by academics and policy professionals alike, to make sense of and act in this changing landscape of international economic relations. The security of supply of semiconductors and of certain critical minerals, including rare earths, are examples of recent areas of heightened interest.
Our goal with this piece, and with a longer article we published jointly last year, is to take a step back and ask whether the concepts developed in previous decades, when looking at hard security issues, could find usable translations or analogies in the realm of geoeconomics.
We believe that such an exercise can be useful as a framing exercise: governments, and those who advise them, would benefit from understanding the ultimate big picture impacts and trajectories of geoeconomic policies. For example, could there be runaway trajectories, or action-reaction spirals, that one should guard against? Or given the well accepted importance of collective action when it comes to sanctions, can one conceive of economic security alliances?
Our longer article discusses economic security dilemmas; economic security action-reaction spirals and arms races; economic deterrence; economic appeasement; economic security alliances; and burden sharing within economic security alliances. We focus below on our proposed concept of an economic (or geoeconomic) security dilemma and conclude with some thoughts on economic security alliances.
Geoeconomic security dilemmas
We believe that there are two types of geoeconomic security dilemmas, the first relating to national survival, the second to technological superiority. With the first type, the focus is on essential resources: imports of food, energy and other goods essential for survival. Under this dilemma, a rising power grows concerned about its access to essential resources. A rival power seeking to constrain its trajectory may in turn target that access, thereby increasing the rising power’s conviction that force must be used.
Historically, this type of security dilemma has been at its most dangerous in cases of rising economic needs on the part of revisionist great powers, as the cases of Germany and Japan in the early 20th century illustrate. To be clear, this framing does not in any way reduce the moral and legal responsibility of a state that initiates a use of force. However, being able to conceive of this kind of geoeconomic security dilemma provides a guardrail for policy making. Assume, for the sake of argument, that a coalition of states decided tomorrow to prevent China from importing crude oil, this would create an obvious incentive for China to resort to force to avoid economic calamity.
With the second type of geoeconomic security dilemma, the focus shifts to long-term competition between great powers. In this case, an incumbent great power may respond to a rising challenger by seeking to limit its access to the most potent military and dual-use technologies. This would be pursued with the aim of retaining military superiority, in anticipation of a possible future conflict.
This second type describes a major component of the ongoing US-China rivalry. Historically, technological rivalry and technological gaps between great powers have been the norm. Such rivalry does not, by itself, lead to war: national survival is not threatened, and it would be extraordinary for a state to initiate war solely because it wants access to somewhat better technologies.
We posit that the two types of geoeconomic security dilemmas co-exist on a continuum. It is possible to imagine an incumbent power responding to a challenger power initially only through targeted restrictions on technology, and for relations to worsen over time, leading to more expansive policy measures, in the geoeconomic realm or beyond it.
If one were to fear a slide from the first type of dilemma into the second, far more serious one, one could seek to create and communicate clarity about the limited intent and scope of one’s geoeconomic measures. We offer this framing as an explanation for the Biden Administration’s expressed desire, from 2022 onwards, to “build a floor” for US-China relations.
Trump and US-China relations
One obvious question in early 2025 is whether and how the new Trump administration will, in its own way, conceive of “a floor” for US-China relations. The most important areas of focus for America’s attempted technological containment of China have to do with export controls and measures to restrict cross-border investments.
The new administration’s day one memorandum on its “America First Trade Policy” directs the US government to “enhance our Nation’s technological edge” through the elimination of “loopholes in existing export controls – especially those that enable the transfer of strategic goods, software, services, and technology to countries to strategic rivals and their proxies” and also calls for potential enhancements to Biden-era restrictions on outbound investments to rival states.
The United States would obviously benefit from a coordinated approach with its allies in Europe and the Indo-Pacific for its attempted technological containment of China. This would require the emergence of an economic security alliance, or geoeconomic alliance. Among other questions one may draw from the literature on military alliances, the question of burden-sharing will naturally pose itself. If history is any guide, this will be a fraught issue.
For more information, see the authors’ accompanying paper at PRISM.
Note: This article gives the views of the authors, not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured image credit: European Union
