While you wouldn’t know it from the recent U.S.-Israeli military confrontation with Iran, the latest U.S. National Security Strategy, made public in December, marks a decisive departure from the post-Cold War paradigm. It explicitly characterizes previous U.S. strategy — under which Washington assumed responsibility for global challenges — as fundamentally “misguided” and declares a retreat from its role as the dominant global power.

Instead, the strategy reorients U.S. security around homeland defense and a Western Hemisphere-focused approach described as a “Trump corollary to the Monroe Doctrine.” U.S. President Donald Trump has dubbed this the “Donroe Doctrine,” signaling a prioritization of hemispheric stability.

Within this framework, the primary threats to the U.S. homeland are identified as illegal migration and narcotics flows from Latin America. Stabilizing the Western Hemisphere is thus positioned as essential to mitigating these risks.

At the same time, the strategy places unprecedented emphasis on economic security. It sets objectives that include deterring foreign actors that harm the U.S. economy, building stable and trusted supply chains and ensuring that U.S. technologies and standards continue to shape the global economy.

Economic security is elevated as a central priority, encompassing the correction of trade imbalances, securing access to critical supply chains and resources, reindustrialization, revitalizing the defense industrial base and maintaining strength in energy and finance.

No previous U.S. national security strategy has incorporated economic security to this extent. Why, then, has it become so prominent during Trump’s second term?

The strategy’s emphasis on economic security is particularly evident in its chapter on Asia. Before addressing deterrence in East Asia, including the Taiwan Strait, it foregrounds economic issues and underscores the need to “rebalance” relations with China.

This shift reflects the experience of the second Trump administration’s tariff policies. Shortly after taking office, the administration imposed a 10% tariff on Chinese imports — later raised to 20% — citing China’s role in exporting fentanyl precursors.

On “Liberation Day” in April 2025, so-called reciprocal tariffs on China were set at 34%. China responded with countermeasures, including tightening export controls on rare earths and raising tariffs on U.S. goods. In response, Trump escalated tariffs to 84%, ultimately raising total tariffs on Chinese goods to 145%.

By May, however, ministerial-level negotiations in Geneva and London led to de-escalation. U.S. tariffs were reduced from 145% to 30%, while China lowered its tariffs from 125% to 10%.

These exchanges revealed a critical reality: China’s countermeasures were highly effective. The United States recognized its heavy dependence on China for critical minerals such as rare earths — dependencies that, if disrupted, could severely affect key industries, including defense.

The administration’s tariff strategy was premised on the indispensability of the U.S. market. While the United States remains the world’s largest economy with strong consumer demand, China has adapted.

Since the first Trump administration, Beijing has enhanced its strategic autonomy by diversifying imports — including shifting soybean sourcing to Brazil — while leveraging its own form of indispensability through control over critical materials.

This contrast highlights a deeper asymmetry. China has systematically built both strategic autonomy and indispensability, while the United States has lagged in geoeconomic adaptation.

As a liberal economy, the United States faces structural constraints in mobilizing private-sector resources or enforcing industrial policy. The private sector continues to source heavily from China due to cost efficiency, in contrast to China’s state-led model, which can mobilize national resources under Communist Party direction.

The prominence of economic security in the strategy reflects Washington’s growing recognition of these vulnerabilities.

Investment agreements

The use of tariffs as a tool of geoeconomic power was partially constrained by a Feb. 20 Supreme Court ruling that found reciprocal tariffs under the International Emergency Economic Powers Act unconstitutional.

While this limits the administration’s flexibility, other legal mechanisms remain available and the use of tariffs as leverage is likely to continue — albeit with reduced scope.

At the same time, tariff-investment agreements with countries such as Japan and South Korea are expected to endure. Although the ruling invalidated parts of these agreements, maintaining reduced tariffs under Section 232 of the Trade Expansion Act — particularly for automobiles and auto parts — creates a strong incentive to preserve them.

Importantly, the nature of these agreements has evolved. Initially framed as efforts to reduce the U.S. trade deficit and revitalize domestic manufacturing, they increasingly resemble joint efforts to address U.S. vulnerabilities and strengthen geoeconomic power.

This shift is reflected in the first set of Japan-U.S. investment projects announced in February: a gas-fired power plant in Ohio, crude oil export infrastructure in Texas and a synthetic diamond manufacturing facility in Georgia.

The Ohio project supports energy supply for AI data centers — critical to competition with China in artificial intelligence — while synthetic diamonds are essential for next-generation semiconductor technologies, an area where Japan retains strengths.

These projects are less about traditional industrial revitalization and more about enhancing U.S. economic security and competitiveness. At the same time, their rapid rollout raises concerns about insufficient feasibility studies, suggesting they are as much political initiatives as economic ones.

U.S. dependence on China in critical supply chains poses risks not only to economic resilience but also to deterrence. If Washington lacks strategic autonomy, it may find it difficult to confront China, as supply disruptions could undermine its defense industrial capacity and sustained warfighting capability.

Recognizing this, U.S. Secretary of State Marco Rubio convened a ministerial meeting on critical minerals in February, bringing together 54 countries and the European Commission. The initiative aims to strengthen supply chains through coordinated public-private investment. While not an immediate solution, it represents a necessary step toward addressing structural vulnerabilities.

Prime Minister Sanae Takaichi has already demonstrated Japan’s commitment by launching a growing number of U.S.-based investment projects, including gas-fired power plants and small modular reactors using next-generation nuclear technology. These and other joint projects focus on deeper strategic cooperation — enhancing both countries’ strategic autonomy and building mutual indispensability to counter China, particularly in artificial intelligence.

Although Japan’s $550 billion investment commitment has drawn domestic criticism, it should be understood as part of a broader geoeconomic strategy. Leveraging this framework to address U.S. vulnerabilities is essential.

Ultimately, Japan’s foremost strategic priority is to anchor the United States in East Asia, maintain the balance of power with China and deter potential aggression against Taiwan.

Strengthening U.S.-Japan cooperation in economic security — thereby reducing U.S. vulnerabilities and reinforcing deterrence — will be critical to stabilizing U.S. strategy in an increasingly uncertain era.

© The Japan Times