Lawfare Daily: Emily Benson on What Economic Security Is, and How We Should Think About It

[Intro]

Emily Benson: Well, how do you have a resilient water system? How do you have a resilient electrical grid? And there we get into really challenging questions about exposure to single source suppliers, most notably in China.

Peter Harrell: It’s the Lawfare Podcast. I’m contributing editor and host of the Security Economics Podcast, Peter Harrell.

For today’s episode, as part of our Security Economics series, I sat down with Emily Benson, the head of strategy at Minerva Technology Futures, where she leads the company’s work on technology statecraft. Emily is also a non-resident fellow at CSIS and was previously part of the team that built the Commerce Department’s new supply chain center in 2024 and 2025.

Emily Benson: We have to have a good idea of where we’re getting stuff from, otherwise we will miss the opportunity to finance or create a strategic stockpile of something we may want in the future.

Peter Harrell: Emily moved to Europe several months ago, and she and I discuss what economic security actually is, whether Europe can and should wean itself off American technology due to geopolitical risks, whether the U.S. should be more focused on promoting our own economic and technological leverage, and how China thinks about economic statecraft.

[Main Podcast]

You are someone who, in my mind, has worked on this concept of economic security sitting in a government office, sitting in a private sector office, and sitting in a think tank office. And a couple of years ago, you wrote a report for CIS, CSIS that made recommendations for a U.S. economic security strategy, something that we have seen other governments like the Japanese government, roll out.

And having served in the Biden administration with you, economic security was certainly a word we bandied about quite a bit. But I’m not sure we ever developed a coherent theory of exactly what economic security is. And I’d be interested in hearing your views about how you think about economic security as a concept, what it means. Does it mean something? Or is it just one of these words that policymakers use to advance some specific objective they have?

Emily Benson: Yeah. So that is definitely the big question, and it’s sort of funny. When I was going back through the paper I wrote in probably 2022, 2023 on economic security and recommending that the U.S. create its own strategy that would look and feel like what the Japanese had done, I queried into Claude, did I actually ultimately define economic security anywhere during my time at CSIS?

And Claude very politely said no, I failed to do the big thing, which is actually come up with a helpful taxonomy for how we think about it. And it is pretty large. There’s a very diverse-

Peter Harrell: The AIs are trained to be nice to us.

Emily Benson: Yeah.

Peter Harrell: So, you know, it’s good that Claude was nice to you about your writing. Sorry.

Emily Benson: Yes. Good job. You didn’t do the one big thing. S- but I would say there are, there is a rainbow or a spectrum of ways to define economic security, and some have been co-opted more recently by the left and some by the right. If you look at the left, for example, economic security will often invoke the New Deal, FDR, the idea of providing a social baseline for Americans to survive a healthy, happy life.

That’s actually materially important today when we’re having new, fresh conversations of a similar kind, but applied to universal basic income in the event that AI autonomizes a large portion of our labor. So, this is a labor-oriented definition of taking care of your people so that they can live a healthy adult existence.

What’s interesting in more recent years is that the right has come around to this definition in a very similar vein. So, if you look at the horseshoe, the purple part that overlaps, in some ways you could even see someone like Steve Bannon maybe agreeing with AOC on certain tenets of what it means to protect the ability to produce in order to safeguard jobs here.

In what I would call is more of the national security establishment, I think there’s been a tendency in the past, I would say year and a half, maybe two years, to militarize the way that we think about economic security. And so here, if we don’t have enough production capacity for 155s or we’re running low on missile stockpiles because of U.S. activity in Yemen and then Iran, to me, that’s not necessarily an economic security question.

That’s much more about the resilience of military or military end use supply chains. That distinction is important because historically in the United States, we’ve had a fairly clear operational understanding of the civilian economy versus the military defense national security economy. What it appears is underway is a melding of those two worlds into one where everything is working or operating in service of this militarized version of the United States.

And here, the defense industrial base looms large. Of course, it’s very correct to want to focus on those supply chains, particularly at a point in time where we’re needing to modernize a lot of our equipment. So, if we’re looking at building new lasers, new drone defense mechanisms or new drones in and of themselves, we do need to look at that.

Where I land is probably a little more simplistic. What does economic security mean to me? There, I think it is really about covering our bases. How do we make sure that we can keep the proverbial lights on? What do we actually need to survive and thrive? And here, I would think that mostly applies to water, electricity, and agricultural production.

So how do we have resiliency across those three primary domains? Okay, pretty simple. I think we can all agree those are the things we need to survive. But pretty quickly, especially from a trade nerd perspective, well, how do you have a resilient water system? How do you have a resilient electrical grid?

And there we get into really challenging questions about exposure to single source suppliers, most notably in China. So, it’s not like one day we can wake up and say, today’s a great day to replace the entire local water system infrastructure across the country, or to rip and replace what in many cases have been commercial and at-home routers compromised by firmware.

And so, we’re confronted with this problem where we’re over-reliant on what in many cases is an adversarial party that has compromised some of our core infrastructure that keeps our lights on. That, to me, should be the immediate problem that economic security and statecraft tools should solve.

Peter Harrell: That’s really interesting. I mean, so what I hear you saying is, we probably have a component of it that is what you might think of as, like, key sectors that we need to secure, like ag, for example. But there’s also this cross-cutting kind of infrastructure element to it. You cited power and water. Maybe telecom would be a piece of that-

Emily Benson: Yeah.

Peter Harrell: -too, I could think. And if you’re gonna have economic security, you could think of that as just a, you know, a couple of sectors, but because those sectors depend on so many different kinds of inputs, you’re really talking about many different kinds of supply chains. Where do you see something like chips?

You know, obviously I want to, you know, we were both in the previous administration. Chips is kinda, gets brought up a lot in, in this. Is our focus on chips economic security? Is it national security? Is it just you know, semiconductor industry influence? Like where do you see chips, chips fitting?

Emily Benson: We’re five mi- five minutes into this recording. I’m already gonna get voted off the island here by saying I, I think we’ve potentially overemphasized the importance of chips. And during my time at CSIS, I was in this boardroom environment with someone from the semiconductor sector, and we have at CSIS these very advanced trash cans where you can wave your hand over and the lid opens and it’s, you know, a very clean way of disposing of things.

That doesn’t probably need to have a semiconductor in it as an item. We have survived for millennia-

Peter Harrell: I mean, what if we forget how to use our feet to push the little levers in the older the older models? I don’t know, Emily.

Emily Benson: Yeah. Or open top, like shooting hoops, you know? I think that we have probably overemphasized the degree to which our economy would completely collapse if we ha- suddenly don’t have the same amount of semiconductors. We can always reallocate resources less than ideal, but that is a possibility.

Where it does go back to the military domain is quite interesting. I read some analysis a while ago that suggested that 90% of fighter jets under the NATO umbrella contain Chinese chips of some sort. And so, if we want to maintain or replace or make sure that we don’t have compromised hardware in those advanced weapons systems, then of course we should have a domestic or at least allies supply of those semiconductors.

We’ll get into Europe, I think, in a little bit, but Europe is in quite the co- conundrum right now because they don’t have the ability on the continent to produce anything at the sub-seven nanometer level. And it’s a good question. Does it really matter if your continent can’t produce an iPhone, or should you be able to produce an iPhone?

I’m kind of mixed in the middle. I think we should at least have sufficient supply to cover, again, the very basic services that we need. But at the same time, I don’t see a problem with importing semiconductors from somewhere like Germany, for example, or Japan or South Korea, with the caveat that a lot of South Korean production actually occurs in China.

But I do think there are other areas that are probably more deserving of a more let’s say, demand-based approach to economic security. And there I would go back to the example of routers compromised in Salt and Volt Typhoon.

Peter Harrell: That’s a really interesting point. I do remember, I think it was about two, three years ago, when TSMC was first bringing three nanometer chip production online.

And I, I, for either the first six months or maybe 12 months of three nanometer production out of TSMC, phone makers had, were purchasing 100% of production, right? The leading edge chip was going 100% into cell phones. And so there, I do remember having the thought then, as we were thinking about economic security and chips, well, okay, so what would actually happen if we lost access to three nanometer chip production?

Well, it would all mean we couldn’t have new phones for a year or two, which, you know, like maybe isn’t actually a catastrophe the way you might sometimes get spun out there. Now I guess I do think that if we lost access to the full range of chips, you know, you would quickly see you know, various kinds of other manufacturing here in the U.S., you know, and defense industrial base would begin to get hit.

But I actually kind of agree with you, we need to be a little bit more thoughtful about the relationship of what kinds of chips are vital for our national economic security and what, you know, what maybe actually we’ve overestimated or misunderstood what the, the risk is.

But I actually want to shift topics a little bit to one you put on the table, which is Europe. And I know you have moved to Europe recently. I gather the summer over there was pretty hot, but hopefully things are beginning to cool down. You know, you’ve argued in the past that if there’s a major U.S.-EU schism, and I’m not sure if we are in a major schism or if you think we’re still in something that can blow over, but you’ve argued that if there is a major schism, Europe will finally decide that it can’t rely on U.S. technology.

And I think we have obviously seen some evidence of this over the last couple of years in Europe, but including quite, you know, this year we have seen renewed efforts by national governments in Europe to find, you know, European tech champions for, you know, kind of office software and for defense software. And certainly they’re having a lively debate about defense technology and not being as dependent on the U.S. for their defense technology.

And I, you know, so I see this, this point that Europe might want independence. On the other hand, that actually is quite hard to do in practice. We’ve seen Mistral, their AI champion, kind of pivot from trying to develop, just recently pivot from trying to develop leading edge AI models to becoming a platform for hosting other models.

I’d be interested in unpacking, you unpacking how serious do you think this risk that Europe may finally actually diversify away from U.S. tech is? You know, are we at some kind of tipping point there, or will the structural realities of how hard that is continue to keep Europe dependent on the U.S. tech stack, despite what I think we would all admit is at least a fair amount of tension in the relationship, even if we’re not yet at a point of a full schism?

Emily Benson: Well, I know there’s been some writing recently around town, including in Foreign Affairs, that the current relationship between Europe and the United States is fixable, that the alliance will continue to endure. And from my vantage point in Europe, that is probably not as likely as people in Washington would like to think.

We cannot overstate the importance of what happened earlier this year over Greenland, where Denmark had prepared blood supplies to go in and defend its territory against a fellow NATO ally. That is a very big problem about the overall trustability of the United States. So, let’s put that in one kind of hard power dynamic that will continue to impact the relationship.

On the technology side, there are two very big problems that the Europeans identify with the U.S. One is the purported existence of a kill switch, and this is a great topic over dinners in D.C. It, does the mythical kill switch exist? If so, what is it? Is it embedded in certain advanced GPUs, where my understanding is that real estate on the very small GPUs is actually already accounted for.

And if you look at larger semiconductors, it’s actually not worth the cost, because some of them sell for cents on the dollar, to embed a physical kill switch. And so, when I talk about kill switches, I tend to refer to the extraterritorial capability of U.S. law, and this is the ultimate kill switch.

This is the U.S. government saying, no, you cannot continue to operate machinery or advanced technologies in a certain jurisdiction that we think could pose a risk to U.S. national security. This came up very viscerally in May over the Fable Five Mythos meltdown, which bled into the month of June, where the U.S. purported to have the most advanced capabilities that AI has ever produced, and it rolled it out very slowly to a set of U.S.-based entities and experts.

The European Union, on the other hand, including some of our very close Five Eyes and NATO allies within the European Union, were excluded from early access to Mythos Fable Five. And what that meant for them is that we’re looking at a United States that has this potential mega offensive cyber capability, while at the same time not allowing the Europeans to build up an adequate cyber defense system that could defend, for example, major financial institutions.

That’s another big hit on the trustability of the United States.

Peter Harrell: Sorry, just to jump in. I will admit, even here in the U.S., it did come off a little bit when we had the... I mean, there’s a, sort of I think, a defensible element of the export controls. If you have this new tool, you wanna make sure that bad actors don’t get it.

On the other hand, keeping it in the U.S. and not NATO allies did have a little bit of a, huh, are the Americans gonna use this to insert some spyware in you know, foreign networks before they give us the tool to defend against? I mean, it did sort of inevitably have a little bit of that feel

Emily Benson: Yeah.

Peter Harrell: feel to it- at least as a possibility.

Emily Benson: Very spooky feel, and it did not help. At least my understanding is that a lot of European outreach to the USG was met with crickets. And so, if you are actively looking at Fable Five and simultaneously being ghosted probably not the sign of a really enduring friendship. So, there’s that.

The other really big elephant in the room is the CLOUD Act, and this provides wide legal latitude for the U.S. government to access data, including on European citizens, when it deems necessary to U.S. national security. If you go back and you look at some of the early attempts to get the CLOUD Act passed, it was most likely well-intended to be a simplification of too many overlapping rules coming from too many different agencies that made compliance impossible for a lot of the big actors.

So, what was intended as a simplification effort has actually ended up being a giant headache for a lot of tech companies that are operating on the continent because European governments say, well, if we use you, the U.S. government will be able to access all of this data. And so that makes European governments much less likely to want to continue to build.

But as you note, Peter, things are not looking completely green for the EU when it comes to building an alternative. There was an interesting piece in Politico recently where the title is something to the effect of, I just went 72 hours without U.S. technology, and here’s how it went.

Peter Harrell: It was French, French Zoom doesn’t work that well? Was that kinda the lesson here?

Emily Benson: Well, the lesson was it’s possible, but annoying because communication becomes more difficult. But I was thinking I would really like to know a couple layers back in the software supply chain where American technology exists. So, let’s say you go to a supermarket in London or in Paris, you buy something.

The chances are very significant that grocery store chain uses a U.S. cloud service provider to run its backend logistics. And so, if you’re importing fruit from Spain or from an African country, you’re using U.S. cloud. So, I would really love to know if it’s actually even possible to go 12 or 24 hours without using any U.S. technology.

The entire modern backbone of our economies is built on U.S. tech. And so, in order to build an alternative, it will take probably a generation, and then that gets into a whole new discussion about where to build it and how to pay for it.

Peter Harrell: And do you think Europe is serious enough today to turn that discussion into action?

Or do you think this is something that, you know, maybe they will adopt a more limited approach, you know, here, m- back to our ser- our discussion on economic security. You know, here are a couple of kinds of critical infrastructure providers where we need a U.S. free tech stack, but, you know, most of the economy will continue to run on the U.S.

Like where do you think they’re gonna land on this debate? Or will they throw up their hands and decide August at the beach is nicer anyway?

Emily Benson: I’m pretty confident in this assessment. There will be white papers. There will be non-papers.

Peter Harrell: Yes. The feared European white paper for sure. Okay, got it.

Emily Benson: This is the one, this is the one policy thing I’ll say that I’ll never be wrong about. There will be non-papers. I think that the discussion in Brussels has been stalled for really what’s a good reason, which is the pace of technological change. Why would you stamp something to proceed in the European Parliament when the tech landscape looks completely different than it did in February?

If you’re following the U.S.-China advanced AI quote, unquote, race, as some people like to characterize it, it’s really hard for legislators, including the White House for that matter, to keep up with the pace of change. So that’s one problem. Another problem is whether or not you want to build the gigafactories necessary to backfill what American service providers are currently doing.

And again, to invoke the supply chain brain, where are they going to get the parts and components that actually create data centers? There are some attempts to draw TSMC to move certain amounts of production to the continent. Could they scale up indigenous production already? And if so, at what cost?

The first order of business that I think they will do is look at what the core needs of governments are. So, government services that they provide to civilians, core financial infrastructure, and then of course internet equivalents that run more of the classified side of governments. And again, going back six months, eight months, or a year, you might more easily have been able to say, look, we’ll just go to a neo cloud, a small alternative cloud provider, for example, based in the Netherlands.

But since the advent of Fable Five and Mythos, it looks like neo clouds are much more cybersecurity exposed than we recognized they were a few months ago. And so, it’s much harder if you’re the German government, for example, to go and pick a small guy when you know that their cyber defense capabilities just simply can’t stand up to an offensive capability from the U.S. or from China.  And so, they’ll have to figure out how much spare change they can shake loose in order to build how many big data center facilities.

I’ll also note, you mentioned it was a very warm summer here in Europe. The Rhine is at historic lows. Water scarcity is becoming top of mind in Europe, and not only will that imperil some of their nuclear power systems that feed large data center capacity, but it will also impact physically where data centers get built in the future.

And so, given the pace of change, I think we’ll probably need another year to see where this shakes out, but it looks like the prevailing voice right now is for Europe to try to build everything from soup to nuts, and that to me is not a very feasible way of trying to regain a foothold in this geopolitical discussion.

Peter Harrell: Do you think they should take a more targeted approach, focus on a couple areas of potential comparative advantage?

Emily Benson: Yeah, they have great universities, great engineering talent. There is no harm in using frontier models made in other countries. The key here will be diversification to avoid a single source reliance problem.

So, if you look at NATO, for example, they use a lot of American cloud service providers, but they don’t rely on one. They have a basket of service providers. Something like that will stud the European Union pretty well. There’s also a very big leap heading towards embodied AI, which is AI that we use in the physical environment.

Meta glasses have come up a lot in recent public debates, but also humanoid robots in China. As we move increasingly towards a reality where you and I are interacting with agents or AI systems in our lived everyday lives, no one has really won that chapter yet, and that could be somewhere where European engineering talent could play a very big role.

And so, I would look to these applications and adoption of AI as a very promising arena for Europe to play in.

Peter Harrell: I wanna shift direction a bit and I guess instead of you looking west back at the United States, y- you looking east into Asia. You’ve obviously for many years now been thinking about the U.S.-China technological relationship.

And it seems to me that over the last couple of years, there has been a split in kind of the conception of how the U.S. should think about its economic relationship with China, with the kind of prevailing national security consensus in Washington basically being to argue we need to be de-risking or decoupling, reducing our dependencies on China, cutting off China’s access to U.S. technology like semiconductors and AI.

Obviously, like a lot of debate about how wide that should go but kind of a sense of the, we should be thinking first and foremost about risk and de-risking rather than thinking about how do we maintain our leverage over China over time, and where can we use continued economic integration, or where should we be pursuing continued economic integration?

Not just for sort of, you know, commercial reasons, but for maintenance of geopolitical leverage. On the other hand, there is still a view, and I would potentially characterize Jensen Huang as like the most prominent public person who would articulate this view, who does argue quite directly no, we wanna keep China, you know, hooked on our chips.

Maybe we wanna reduce our dependencies on things that they provide us, like critical minerals, but we actually need to be thinking about you know, what are the trade-offs if we cut off China’s access to U.S. technology, to U.S. e- you know, companies, U.S. economy because we will ultimately give up some of our leverage when we cut them off and when they indigenize fully their ecosystem for these products.

I’m interested in how you think about this debate and, you know, in some of your writing you have argued that we should be thinking about maintaining leverage, but how you think we should be striking this balance?

Emily Benson: To put this in very simplistic terms, I would invoke the old adage, if you’re not at the table, you’re on the menu, and that’s the way I think about exports to China.

The way the European Commission, especially under von der Leyen, has characterized this, and this comes off of a bilateral meeting that happened under Trump two where the Americans and the Chinese met in Spain, but the European Commission wasn’t invited, and this in turn set off all the alarm bells.

Oh my gosh, we’re not even at the table because we don’t produce anything that’s important enough to get us there, which I think is a misconception, but that was the general sense. Thus enters a new very bureaucratic but somehow amazing term called strategic indispensability.

Peter Harrell: Oh, I actually haven’t heard this one yet. This is this is an interesting concept.

Emily Benson: It’s so good. Yes. So the idea is that you want to produce enough advanced technology that gets other economies hooked on your supply so that at a later date you can invoke that leverage if you need to from a security standpoint. And so, Europe is now looking at where can they build the strategic indispensability in order to have more skin in the game, particularly to reinsert themselves in the U.S.-China bilateral dynamic.

So, from that vantage point, I do favor a continued, although safely managed export regime, that permits some advanced technologies to go to China. Unfortunately, a lot of this information is not public, but I get the sense that China is actually much more advanced in several domains than we tend to think in the U.S.

For example, chip production capacity, there have been rumors this year that they have increased their DUV immersion production capacity. It’s still very limited, something like 20 machines per year to ASML’s 120, but they’re taking further steps to indigenize their own progress. And so, the more that we restrain their ability to get our technology, the faster they will try to completely de-risk us from their economy.

If you look at the way that the U.S. has rolled out the internet, for example, or the tentacles that we retain in many far-flung telecom networks, that’s affording the United States an almost unbelievable amount of intelligence gathering authority, and in turn, geopolitical power. Why would we handicap ourselves from having that insight into the next build-out of the technological revolution that awaits?

I have a hard time kind of wrapping my mind around the need to create this binary in a world that’s already so connected and so digitized. So, from an offensive point of view, I think exports can be a very helpful part of our statecraft toolkit.

However, I am very much in favor of using every single tool available to us on the defensive inbound side. I thought a lot of the work that Liz Cannon was doing at ICTS was highly valuable. Some of the rules recently that have come out under FCC authority on the covered list, those are very helpful in going back to where we started our conversation, which is making sure we have resilience at the baseline of our economy.

And until we really make sure what we’re importing is safe and free of s- foreign surveillance capabilities, I’m not sure we’ll really get there.

Peter Harrell: That’s an interesting point. So, you have kind of a perspective that on the one hand we should be seeking to pro- I mean, it kinda makes sense. Let’s maximize our leverage over them while simultaneously reducing their leverage over us, right? Is that kind of the framework you’re?

Emily Benson: That’s exactly right, yeah.

Peter Harrell: On the export control front, you know, the counterargument I hear most frequently to the argument that we should main- you know, sort of allow exports to maintain their dependence on us is, well, the Chinese have decided to cut us off anyway.

And you kind of maybe saw a piece of this with the Nvidia chips where even after the U.S. government allowed, subject to a tax you know, certain exports of Nvidia chips to China, China has been very slow on allowing the deployment of those chips. And I, you know, I hear this argument: Well, China’s kinda made the de- the decision to end its dependence on anything that they would see as giving us leverage anyway, and so we might as well, you know, cut it off ASAP ‘cause they’re already all in on indigenization.

I’m curious how you think about that.

Emily Benson: Yeah, to me it’s one of those questions of what caused the acceleration in China’s bid for indigenization. And there I think that the U.S. export controls probably did play a role. I was at a dinner in D.C. last year with a bunch of export control AI people who I thought were traditionally more in favor of a much more robust application of export controls that is restraining the ability of China to get our most advanced GPUs.

And the consensus around the room was more or less that the 2022, 2023 export controls in the long run will have had no effect or a slightly negative effect for overall U.S. foreign policy because it did encourage China to speed that up. To me, that was a very interesting conversation because my sense is that in closed doors in D.C., there is a much greater number of people who would agree with that assessment than would admit to it publicly.

It is worth thinking about that as we proceed with potentially applying additional restrictions going forward because China has shown an incredible adeptness at growing its own tool kit, at responding in kind, or in some ways even surmounting the U.S. statecraft tool kit. And so, what we do, they do in return or even twofold.

And so, I do think it’s worth proceeding with caution. The other final note here is that where people come down on this really depends on where they stand on artificial general intelligence, when that will arrive, and what that will entail. And if you subscribe to the philosophy that AGI will be life-changing, that it will completely alter the way that we as humans interact with each other, but also with technology, with silicon products, then that probably means you’re in favor of export controls.

If you are a little more skeptical of the arguments about AGI, for example, that it actually will take a bit longer and that it won’t solve all of our problems, but could create a lot of fairly serious problems, then maybe you might be less inclined to go all in on export controls. And there I’m sort of in the second camp, which is that I don’t view AGI as imminent, and I don’t think AGI, whoever gets there first, will change everything in favor of one certain government.

For example, I find it extremely hard to believe that AGI will fix the Colorado River problem that is impacting Arizona, where it just so happens a lot of advanced GPUs are made. And so, if you take yourself out of the AGI debate and you look at this from a diplomatic standpoint, what can we do to repair relations to avoid a military catastrophe, there I would be in favor of a little more moderated approach.

Peter Harrell: Yeah. F- first I should say I’m not sure I like you saying this, Emily, because I feel like my 401k depends on us reaching AGI soon. At least, you know, that’s been kind of the lesson-

Emily Benson: You and me both ...

Peter Harrell: the last year. But on a more serious note, it’s interesting to hear you bring that up because I do actually think I agree with you.

I mean, the discussions I have been in over the last couple of years, I have also noticed that it seems to me that the people who are sort of most aggressive on export controls are the people who believe we’re going to hit AGI very soon, and it’s gonna be transformative. And so, sort of, you know, the, the timeline right now matters a whole lot, and we should really prioritize hitting AGI soon and as quickly, as far ahead of the Chinese as possible.

Whereas the folks who have more of a view of, you know, AGI may be more a process than a, you know, than a moment, and, like, it’s gonna take years for all of this to deploy tend to be a little bit more skeptical of export controls. It’s interesting to hear you pick that pick that up. I wanna continue on the topic of China, but change the direction of flow a little bit to what China is doing to weaponize the things we depend on China for.

I actually first started thinking about kind of China’s use of coercive economic measures back during Trump term one when I was at CNAS, and we did a research paper on kind of what were China’s coercive economic measures against, back then, it was the Philippines over a maritime dispute. It had been South Korea over deploying a missile defense system.

And, you know, it was clear back then that China was increasingly using coercive economic measures. Back then, they had not really built a legal regime for them that was kind of although they were clearly geopolitical, the legal mechanism was kind of, well, we’re gonna, you know, prohibit Philippine fruit imports because we’re gonna find they all violate our, you know, food safety standards or something like that. It wasn’t really a export control regime or import control regime the way we think of it. And also back then, they were very clearly unwilling to do this against the United States, I think maybe because of diplomatic or power dynamics.

Clearly, over the last year or so, that has flipped. They have both been developing a systematic legal regime and they have also shown with great effect on the critical minerals file in particular that they are prepared to use this against the United States.

I know you’ve been thinking about a number of these recent developments both from a public policy perspective and also for, you know, companies that might be impacted here and I was wondering if you could just, you know, unpack for us how you think China is thinking about its ability to weaponize the things we depend on them for and how you think China’s thinking and practice of that is gonna evolve over the next year or two.

Emily Benson: Well, first I have to give you and your former White House colleagues so much credit. I know in 2021 you were calling already for a Section 232 tariff on neodymium magnets and so you had a crystal ball that could tell this was going to be a huge problem. And I think that puts us right at the forefront of when China began to flex its muscles and build, as you say, a much more operational regime over its exports.

So, quick timeline refresh for the uninitiated. We all started getting, I think, fairly educated on these issues far too late. Japan, everyone likes to reference was subject to very intensive export restrictions on critical minerals going back to 2010. But it was during the first Trump administration, as you say, that we all got acquainted m- in much more detail with what China could do.

Fast-forward, 2023, this is when we see the initial gallium restrictions alongside germanium and then shortly thereafter graphite. And I remember I was on, actually on a plane on the way back from Japan at the time when the gallium export restrictions dropped and I thought, oh my gosh, here we go. This is a whole new chapter of Chinese economic coercion.

Sure enough, fast-forward, December 2024, China puts forth a new export control list. And so historically China had these targeted smaller, much more surgical export restrictions emanating from different parts of the government. In December 2024, they put together one big export control list that mirrors the commerce control list run by BIS in the United States. In April 2025 is when the Chinese toolkit was turbocharged by the Liberation Day tariffs from Trump two.

Two days after Liberation Day, China initiated a new tranche of controls on many rare earth elements that hit primarily, although not exclusively, the U.S. defense industrial base. That was one seismic event from 2025. The other occurred on October 9th of 2025, and this was in the lead up to the bilateral exchange with Presidents Trump and Xi in Busan, South Korea.

And if you recall, at the time, the United States was looking, I would say, very furiously and at a very fast pace for leverage it could build heading into the Busan agreement. This resulted, among other things, in what was a very rapid rollout of the 50% or affiliates rule. That, in turn, made China extremely nervous about a total U.S. decoupling from the Chinese financial sector and economy.

China then responded with its own new set of export restrictions that have continued to expand. Fast-forward to this year, and in the month of April alone, China took two steps that I view as fairly substantially increasing its own authority over supply chains. One is Decree Number 834 over supply chains, and this is more or less a monitoring function to ensure the resilience of Chinese supply chains.

The other is Decree 835 that was released, I think, the same day, and it provides the Chinese government with the authority to strike back against compliance with foreign extraterritorial rules. So, if you think here about the MATCH Act, for example, which is trying to apply U.S. export controls to ASML-produced goods or ZEISS or Trumpf items this rule from China would allow the Chinese government, MOFCOM, to strike back against ASML, for example, if it complies with U.S. rules and regulations.

So, it’s creating an exceedingly difficult environment for multinationals who are having to contend with Treasury and Commerce rules but simultaneously these new authorities coming out of MOFCOM that say, if you do cooperate with the USG, we will come for you. And here retaliation can look and feel very different depending on the companies involved and which sector they operate in.

Peter Harrell: You know, it seems to me that the Trump administration has kind of a view that China’s primary leverage over the U.S. comes through the critical minerals vector, right? And there’s been this huge focus on, you know, throwing money at the problem to build up non-Chinese critical minerals supply chains.

And clearly that was and remains a vulnerability. I worry a bit that we don’t know what else we’re vulnerable on. I mean, it felt to me like although people like you and I, Emily we knew last year in the spring we were vulnerable to China on critical minerals. Somehow the president did not. It seemed to catch him by surprise.

But I worry there are many other sectors that we do not understand our vulnerability to China on, of things they could weaponize. And I’m curious how you think about that, and if there were a couple of other sectors that you think the U.S. government should be focusing on here.

Emily Benson: Completely agree, and I won’t use the F word in case my mom listens, but Ian Bremmer came up with the, the FAFO, you know, F around and find out.

And in some ways, that’s kind of what we’ve been up to in the last 12 to 14 months is we don’t know what exact retaliation will look like until we actually take a certain measure. The one that keeps me awake at night the most is pharmaceuticals or medical inputs like cancer drugs, and we simply don’t have the capacity.

I remember during peak COVID or directly after the, the vaccines had come out, I was talking to a, a vaccine producer, and they said that to get the authority to build a new facility and then to actually build the physical structure, and this is just for one type of vaccine, would take an initial investment of $1 billion.

And if you’re trying to invest in leading-edge technology or to come up with a new cure for cancer, maybe you don’t have a spare $1 billion to donate to the de-risking cause. And here, I do have to give the current administration a lot of credit because the White House has been convening leaders from a diverse array of sectors to come and say: How much of a certain input do you use in your supply chain? How can we pool our demand in order to provide an inducement for more domestic supply?

That’s a very useful way of thinking about it. There are some challenges in identifying which parts of the supply chain need to be onshored, but that’s a good starting point. Aside from pharmaceuticals, I do think anything touching the defense industrial base will become extremely challenging to undo.

If you go back two years, there was a problem that befell Skydio at the time, and still our preeminent domestic drone manufacturer, and China cut them off from some of the magnets that are integral to their battery packs, thereby cutting their flight time in half. This is a really big problem if drones are the future of warfare or if we can’t sustain a healthy population to engage-

Peter Harrell: And fair, if our drones are on, like, flight for 30 minutes and the Chinese are on for an hour, that’s not gonna bode well for us, like in, in terms of-

Emily Benson: Yeah.

Peter Harrell: Yeah, you know, that’s very fair.

Emily Benson: Yeah, that, that really hit me. Cutting the flight time in half, that’s a very concrete outcome that we can all understand. And so, I’m not sure what the future portends, but I’m fairly confident we don’t have today what it takes to build those systems for tomorrow.

Peter Harrell: Well, that maybe brings me to my next question, which is a more supply chain focused question, which is you have now worked on supply chain issues in three different positions.

You thought about supply chains and do think about supply chains as a public policy matter with CSIS. You also now advise corporate clients on, you know, how geopolitics can impact supply chains. And then you were one of the inaugural staffers at the Commerce Department Supply Chain Center, which was sort of the first, in my mind, serious U.S. government effort to be able to build some government capacity to understand, you know, actually understand supply chain vulnerabilities.

And, you know, having sat in all three, you know, sort of, having sat in government, having sat in think tanks, and having sat in corporate boardrooms and decision-making rooms, what do you think these different agencies don’t understand about each other and supply chains? Like, what does the government not understand about the private sector? What does the private sector not understand about how the government thinks about supply chains, e- et cetera?

Emily Benson: Well, if I could go in my own chronological order, starting with think tanks, it’s hard to see from the outside if you haven’t served in government or if you haven’t served in government recently, and here I know many people who served maybe only in the first year or two of the Obama administration, or they were posted to D.C. during Obama one, and the government has changed quite a bit, and so has public discourse.

And it’s very hard to see from the outside how all of these different policy levers have changed, the teams that are executing them, and how it comes together in the inter-agency process, and whether or not at the end of the day there actually is someone or some entity overseeing the policies. So that can be a challenge from the think tank perspective, which led me at one point to conclude, well, we need some function in the U.S. government that is responsible for economic security, and there are many different ways to go about that.

Under the current administration, they have the Economic Defense Unit, which is spun out of the Office of Strategic Capital at the Pentagon. That’s probably something that I would have liked from my time at CSIS. The problem with economic security thinking, both in the think tank context, but also to a degree the governments that have put out economic security strategies, is they all end with the same conclusion.

All of our supply chains are very fragile, and we need to figure out in much more granular detail what actually constitutes a supply chain. So, one problem we encountered in the USG at the Commerce Department was having to get this very granular data. And there has been a cottage industry stood up in the last couple of years, most notably after the implementation of the Uyghur Forced Labor Prevention Act that has legally required companies to know more about the provenance of their inputs, which is fine.

But it’s really hard for people in the U.S. government to get high-fidelity information from corporate entities. And without that private sector supply chain data, it’s hard to know just how vulnerable a certain supply chain is. So that’s problem number one.

Another problem from inside the U.S. government is that the information about what’s happening inside of China is extremely siloed. And so, to get a good sense of a certain facility’s production capacity for a given segment of a supply chain, you might have to make 35 phone calls, and that can also be challenging, which goes back to the need to create an overriding structure that has that data ready.

Another problem, at least when I was in the government, is that there is a pretty persistent aversion to characterizing anything the U.S. does as a risky endeavor And when we think about geopolitical risk overall, it’s very important to look at the policies we’re pursuing and how they can come back to bite us.

And here I would again reference Liberation Day and the ensuing Chinese rare earth restrictions. Just one comment on the private sector perspective is here we tend to think, at least from the government perspective, that the private sector is its own separate one entity. A lot of them are former government, and also a lot of the, the corporations sustaining our 401ks right now operate very differently.

I work with some clients who have a very sophisticated internal geopolitical risk function, where they know pretty far back in their supply chain who is producing what input and at what quantity. On the other hand, maybe some companies are just now getting acquainted with the idea of needing to price in geopolitical risk and needing to reallocate resources in order to have more domestic capacity.

So, it really depends, but I do think the idea that the Biden White House had in creating the supply chain function is absolutely vital. We have to have a good idea of where we’re getting stuff from, otherwise we will miss the opportunity to finance or create a strategic stockpile of something we may want in the future.

As it stands now, we really don’t have a good assessment of how vulnerable we are and what the knock-on effects could be across the civilian economy

Peter Harrell: It is striking to me. I mean, I remember at the beginning of the Biden administration, I w- was put on my lap to help write the executive order that Biden signed in maybe February of 2021 on supply chain risks.

And we basically picked four sectors around which there was political sup- a sort of known risk and political support for doing something. So, kind of, you know, EV batteries, pharmaceuticals, critical minerals, and semiconductors. But we didn’t, there wasn’t really a lot of science that went into picking those sectors. It was kind of well documented.

And it is amazing to me that we are now, you know, six years out from that, or five and a half years out from that, and I still feel like there are, we don’t really know what any of the, you know, unknown, the, the vulnerabilities are unknown s- five and a half years ago, we still generally don’t know.

And it is kind of striking to me we’ve not made more systematic progress on understanding those vulnerabilities.

Emily Benson: Part of the problem is the aversion to learning new tools also. There, there is more data out there than we know how to use. That is true. And I remember conducting a research report at CSIS that said, well, why don’t you just figure out where XYZ is going, or who the ultimate beneficial owner is of a certain entity?

And some of the software can be kind of clunky, and if you’ve been in a position for a while, it might not be your top priority to figure out how to use those new tools. And so, for the incoming class of civil servants, I would encourage them to really make full use of the suite, especially of AI tools that are available, but also to plus that up with the human know-how.

And here I’ve had one interesting observation. So our firm partners with a firm that’s based in Berlin called Sinolytics, and they have a lot of expertise in and out of China. They’ve conducted business there for quite a while. They have a very solid grasp of what’s happening in the economy in a very public way.

In Washington in recent years, it’s become politically challenging to have connections in and around China and to be able to process what’s happening, either from a mergers and acquisitions standpoint, or from the guy down the road that actually is making a superior product to his neighbor’s factory.

Having that human knowledge about what’s happening in China is indispensable. And the more the bilateral relationship becomes tenuous, the more challenging it will be for Americans to get that really good information. If we have less info about what’s happening, how are we going to create those mitigating measures that make us more secure at the end of the day?

So that kind of goes back to my earlier comment on export controls as ruffling feathers at a time when actually what we need is more cooperation because we still have so much to learn about our dependencies.

Peter Harrell: I often worry the U.S. government overweights is this widget coming from China compared to the other China-related vulnerabilities that might exist.

And I’ve been thinking about this a lot recently in the context of telecom security. You know, if you go back to Trump’s first term and the Biden administration, there was actually a quite aggressive campaign starting under Trump’s first term to make sure that we here in the U.S. and in key allied countries were not using Huawei and ZTE telecom equipment in our networks.

And, you know, there was a FCC rip and replace initiative, there was a ban, you know, all these efforts to keep Huawei and ZTE out of telecom that, that I think were largely successful. Like, it did not go into the major telecom networks. There was some progress in reducing it out of the rural telecom networks that, you know, had been buying some.

But if the strategic objective of all of that line of work was to prevent the Chinese from spying on our telecoms, abject failure because they just, with Salt Typhoon, Volt Typhoon, hacked into American and European manufactured telecom network equipment and, you know, infiltrated to a, an incredible degree our telecom networks.

And I, you know, I think we made the right call on Huawei and ZTE to try to keep them out of our networks, but I also think we very clearly dropped the ball on understanding, oh, if we cut them off here, they’re just gonna find this other vector to get into our networks. And as we think about our supply chain vulnerabilities, I think we need to think, yes, about where the widget is coming from, but also what is the other way that China can, you know, nefariously get into this this end product that we’re trying to protect.

I do wanna ask you a question, sort of a related question, on U.S. government capacity because you’ve been in the government. What do you think the U.S. government needs to do to build its capacity to better deal with economic security issues?

Emily Benson: I do think it’s important for the U.S. to come up with an economic security strategy.

And if you look at the recent releases of the National Defense Strategy and National Security Strategy, there’s been a lot of chatter, debate disagreement over whether or not those cumulatively equal some economic security strategy because there are tenets of economics in both. Okay, sure, but it is useful to have a document that says here is generally the direction of travel, so that government agencies know what they should be doing.

It’s not always very clear to people on the inside where all of this is coming together, I think in part because so many agencies are so large. The Commerce Department has 50,000 people, which actually exceeds in size the entire Brussels bubble, just for one agency.

Peter Harrell: Wow. You know, we often think of Brussels as being full of bureaucrats, but that often, but that actually puts it in perspective.

Emily Benson: Yeah. Brussels is 30 to 40,000, depending on some factors. Commerce is about 50. And so, you need a sheet of paper that says here’s where we’re going. That’s probably the biggest problem. I know there was an effort during the final chapter of the Biden administration to look through, from a legal standpoint, all the tools available to the United States in its statecraft box.

I’m not sure that went anywhere, and part of this is a political problem, where you have a finite amount of time until a new administration comes in, and then you have to start over. And that’s very frustrating to someone like you, who’s been following the, this new chapter of economic security since it started.

And there are so many through lines, it’s just that the personnel keeps changing. And so, the fewer adjustments we can make and the more continuity we can build, I think will stead us much better. We’re losing expertise every time there’s a major turnover, and then we’re starting over with the same thing.

For example, if you look at Pax Silica, a lot of those ideas originated from the Biden administration, and now of course, they’re being executed under a different flavor with a different type of diplomacy, if we can call on that. But-

Peter Harrell: Much better sunglasses going around the world and taking taking pictures. Jacob looks much cooler on the social media as he goes around and talks about Pax Silica.

Emily Benson: Maybe he’s taking a cue from Macron with his glasses.

Peter Harrell: Well, look, Emily, you have been very generous with your time. One final question for you that I try to ask most of my guests who’ve been in and out of government. If you’re giving advice to someone, you know, maybe a student who’s listening to this or somebody who’s, you know, their first couple of years after finishing school and thinking about building a career around U.S. economic security, what advice would you have for them?

Emily Benson: It’s very important to talk to everyone. I take great pride in having good friends on both sides of the aisle. We don’t always agree on execution. I think we have the country’s best interest at heart at the end of the day, but having real, hard, challenging conversations is very important, and we’re taught growing up, don’t talk politics at the table.

Well, what else is there to talk about? This is impacting our very future, the future of our grandkids, and so get to know people. Challenge them on their ideas. Stay flexible in your own. Maybe you’re right one day, wrong the next. There’s no harm in learning. I think that’s all we can expect from each other, and read everything you can.

I try to read five newspapers a day that run various sides of political spectrums. Another very important newspaper addition for me is to read foreign news. That could be something like the BBC or Le Monde in France, but it’s very important to get that external perspective on what’s happening inside the United States.

It’s a good gut check on how we’re doing, how we’re being perceived, and it helps us think through some of the downsides that may be less obvious. For example, when we implemented the 2022 chip export controls, that was perceived in Europe as splitting a attempt to grow a single market much more deeply, and we kind of cleaved off the Netherlands from what had been an integration attempt.

And that’s not always obvious unless you have that exposure to other people, other ways of thinking, particularly in the foreign lens.

Peter Harrell: Well, I think that’s a great place to leave it. Emily Benson, thanks so much for joining.

Emily Benson: Thank you.

Peter Harrell: The Lawfare Podcast is produced by the Lawfare Institute. If you want to support the show and listen ad-free, you can become a Lawfare material supporter at lawfaremedia.org/support. Supporters also get access to special events and other bonus content we don’t share anywhere else. If you enjoy the podcast, please rate and review us wherever you listen. It really does help.

And be sure to check out our other shows, including Scaling Laws, Rational Security, Allies, The Aftermath, and Escalation, our latest Lawfare Presents podcast series about the war in Ukraine. You can also find all of our written work at lawfaremedia.org.

This podcast is edited by Jen Patja with audio engineering by me, Peter Harrell. Our theme song is from Alibi Music. And as always, thank you for listening.