By Vera Rodriguez,
In 2023, the United States (US) pressured the Netherlands to unilaterally restrict the sale of lithography machines to China. This equipment—an irreplaceable step in producing advanced chips—is exclusively produced by ASML, a Dutch company. Consequently, the lack of access to this technology results in significant losses across various sectors, including the production of tech products, research, innovation, and defense, to name a few. The ASML example perfectly illustrates the potential weaponization of (inter)dependence in crucial sectors for a country’s economy, especially when it has a limited or nonexistent margin of maneuver.
Indeed, the ASML case is emblematic of its time, reflecting a broader global political trend. The principles of free trade and economic liberalism that once came with globalization—previously regarded as net positives—are now being questioned. The COVID-19 pandemic exposed the many risks associated with geographically dispersed production of critical materials. Overreliance on trade with third countries becomes dangerous when essential products—such as face masks or vaccines—are needed for national survival. Other events have further reinforced these concerns: the intensifying US-China rivalry and the wars in Ukraine and the Middle East. Certain supply chains, including medical equipment, critical infrastructure, knowledge, and technologies, are indispensable for a country’s development. Creating plans to support or protect supply chains—encompassing medical equipment, critical infrastructure, knowledge, and technologies—are indispensable for a country’s development. As a result, creating plans to support or protect these supply chains has become part of a broader, modern understanding of security, rooted in the growing instability of global trade networks. Policymakers are now seeking ways to secure their economies, invoking concepts like “economic security” or “strategic autonomy”.
Successful examples of economic security initiatives come from countries such as China, India, Japan, and the United States. Over the past decade, Washington has shifted its priorities from international free trade to economic dominance—a strategy evident in its evolving relationship with Beijing, and one that intensified during President Donald Trump’s second term. Similarly, since 2014, China has prioritized political security by implementing a comprehensive Economic Security (ES) plan. Its strategy centers on internal stimulation (production and consumption) and the external circulation of its value chains to foster innovation. Japan, for its part, has appointed a specific minister for ES and developed a holistic governmental approach to the issue. These are just a few examples of the many countries that have prioritized economic security over the past decade.
Compared to traditional nation-states, the European Union has been a latecomer to the economic security debate. This delay can arguably be attribute to the Union’s structure. Monetary policy is centralized in Brussels, while national security and defense remain under the purview of individual member states such as Warsaw, Berlin, and Madrid. Moreover, the EU’s role as a geopolitical actor is relatively new and has evolved gradually through successive crises.
In 2023, the EU introduced an Economic Security Strategy that identified four main categories of risk: (1) the resilience of supply chains; (2) the physical and cyber security of critical infrastructure; (3) technology security and technology leakage; and (4) the weaponization of economic dependencies or economic coercion. Brussels’ most pressing challenge lies in striking a balance between detachment and globalization through concrete measures. On one hand, full detachment is unrealistic—some supply chains are prohibitively expensive to decouple, and certain materials are only obtainable from specific regions. For instance, Critical Raw Materials (CRMs) needed for technologies like chips are available in only a few locations worldwide, making trade with those countries indispensable. On the other hand, relying on non-like-minded third countries for essential equipment entails significant risk. In this context, learning from states with a more developed ES toolkit could be crucial. These include member states such as Germany and France, as well as non-EU countries like Japan, South Korea, and Canada.
Current ES proposals from the EU have been criticized as vague, due in part to limited institutional competences and the risk of internal disagreement. Explicitly defining measures often risks creating divisions among member states. During Donald Trump’s first administration in 2017, former Chancellor Angela Merkel was among the first to advocate for increased EU autonomy. That same year, Emmanuel Macron began developing the concept of European sovereignty, which has since gained momentum. France has emerged as the most active proponent of ambitious economic security initiatives. However, this strong stance has previously caused friction with member states traditionally aligned with the US—especially those in Eastern Europe—and others wary of protectionism, such as the Netherlands, Scandinavian countries, Germany, and Spain. However, Washington’s current pursuit of foreign policy has already proven somewhat of a unifying force for the EU’s security and defense. As a result, Brussels’ economic security toolkit will likely continue to expand over time.
Since this is fundamentally a matter of trade, the EU and its 27 member states depend heavily on each other and on international partners to navigate these uncertain times. The challenge, therefore, is to ensure a knowledge-driven approach to economic security and to strengthen partnerships and cooperation among like-minded countries. In this effort, international meetings and “mini-lateralism” could be key—both within the EU and externally. Such initiatives would promote exchange and foster mutual influence and cooperation. For example, in 2023, the G7 convened to provide the first definition of “economic security.” These are crucial steps toward developing a shared strategy to prepare for the uncertainties of the future.
References
- Exploring Economic Security Toolkits: Key Insights from Eleven Countries. Clingedael. Available here
- JOINT COMMUNICATION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL AND THE COUNCIL ON “EUROPEAN ECONOMIC SECURITY STRATEGY”. EUR-Lex. Available here
- La seguridad económica de Europa. REAL INSTITUTO ELCANO. Available here
- European Economic Security: Current practices and further development. INTA Committee. Available here
- G7 Gives First Definition to ‘Economic Security’. CSIS. Available here
