The intensifying U.S.-China Trade War has contributed to an immense loss of export markets for farmers. Meanwhile, the Iran War continues to heighten fuel and fertilizer costs. With farmers in jeopardy and midterms on the horizon, pundits and analysts alike are looking to assess how economic hardship may shape rural electoral engagement.

To cushion these mounting pressures, the Trump administration has relied on the 2025 Emergency Commodity Assistance Program (ECAP) to support the agricultural sector. ECAP provides large-scale direct payments to producers experiencing weak commodity prices and elevated input costs. Complementing this, the existing Agriculture Risk Coverage program (ARC) functions as a safety-net program that triggers payments when actual farm revenues fall below established benchmark guarantees. These programs matter not only as economic stabilizers, but also as political tools and in rural America. It is therefore important to understand whether this or future economic assistance can shore up farmer’s support for the Republican party.

This question sits at the center of Jake Jares and Neil Malhotra’s recent publication. Drawing on evidence from the first Trump Administration’s attempt to stem the cost of trade war, the Market Facilitation Program (MFP), the authors examine how exposure to trade shocks and subsequent government assistance influences farmers’ political participation and voting behavior. The authors leveraged variation in the MFP’s payment structure which, due to idiosyncrasies in program design, resulted in substantially different compensation levels across farmers based solely on their 2018 crop portfolios, with some producers undercompensated for tariff induced losses while others were significantly overcompensated. Using a sample of more than 165,000 affected voters, the authors link variation in net MFP benefits to two primary outcomes: turnout in the 2018 midterm elections and campaign contribution behavior in the months following the trade shock. This design allows for an assessment of how differential exposure to economic harm and subsequent federal relief translates into measurable changes in political participation and donor behavior.

Jares and Malhotra find that, contrary to expectations, variation in policy generosity had little to no meaningful effect on political participation. While improved compensation under the MFP, which provided direct payments to U.S. farmers to offset income losses caused by Chinese retaliatory tariffs, modestly increased farmers’ perceptions that the policy was helpful, it did not translate into statistically significant changes in turnout or campaign contributions. Among Republican farmers—the primary focus of the analysis—moving from the 25% to the 75% percentile of net benefits from the MFP resulted in only a 0.3 percentage point increase in turnout, a substantively negligible effect. Non-Republican farmers similarly showed no meaningful changes in political engagement if provided with more generous assistance, indicating that relief outcomes did not differentially mobilize or demobilize any partisan group.

Additionally, no evidence exemplifies that improved compensation influenced campaign contribution behavior in either direction, with effects on Republican and Democratic giving effectively indistinguishable from zero. Even when accounting for prior turnout history, the results remain stable, suggesting that ceiling effects are unlikely to explain the null findings.

The authors further examine how political engagement evolved over different phases of the trade war to better isolate the effects of exposure to both the trade war shock and ameliorative policies. First, comparing the voting patterns of farmers and demographically similar non-farmers, their results suggest that acute exposure to the trade war itself motivated farmers to vote in the 2018 midterm election. On average, Republican farmers’ turnout was 1.2 percentage points higher than comparable non-farmers who did not experience the trade war directly, while Democratic farmer’s turnout was 1.7 higher. Returning to campaign contributions, the authors find that in the early months of the trade war, before retaliatory tariffs were imposed on US agriculture, there were no statistically significant or substantively large differences in contribution behavior between farmers and comparable non-farmers. Following the June 15 tariff escalation and China’s retaliatory measures, crop futures prices fell sharply. However, this economic disruption did not immediately translate into changes in political contributions among either Republican or Democratic farmers. Similarly, the announcement of a $12 billion relief package on July 24 produced little observable response in donation behavior in the short run. More pronounced, though still modest, changes only emerge after MFP benefit rates are announced on August 27, and enrollment begins in early September. At that point, farmers with different political backgrounds show small but statistically significant increases in Republican-leaning contributions, while Democratic farmers show no meaningful shifts.

The largely null results are important because they suggest that even sizable variation in policy outcomes may have limited effects on political mobilization. Taken together, these findings advance two key strands of political science research: one on economic voting and responsiveness to government policy, and another on political mobilization through distributive benefits. The authors conclude that political engagement is shaped less by the magnitude of individual compensation and more by the broader visibility and salience of the policy environment, particularly the Trade War itself and the government’s response to it.

More broadly, the results challenge the idea that incumbent parties can reliably increase electoral participation among their base simply by delivering favorable economic policy outcomes by compensating economic losers. Instead, they suggest that the political effects of policy are more limited and contingent than often assumed.

Since the launch of Reform and Opening in the late 1970s, China has become deeply integrated into the international system and increasingly active within major international organizations (IOs). As China’s economic and political influence has expanded, scholars have debated whether Beijing seeks to revise the liberal international order or instead works pragmatically within existing institutions. One perspective argues that China aims to reshape or weaken liberal norms and institutions¹, while another contends that Chinese leaders view participation in international organizations as beneficial for advancing national interests2 without fundamentally overturning the existing order.

Despite extensive debate, there remains little consensus regarding how Chinese elites themselves view international organizations and China’s role within them. One reason is that most studies focus on China’s behavior in international institutions rather than how Chinese leaders publicly frame those institutions. Official media provides a useful window into these attitudes because it reflects the priorities and narratives promoted by the Chinese Communist Party (CCP).

This project builds on a dataset created by the Trade War Lab that tracks foreign coverage in People’s Daily articles3. Li et al (2025) finds that the newspaper functions as a source of information and as a mechanism for signaling leadership priorities and foreign policy narratives. As Chinese leaders consolidate power, foreign coverage becomes increasingly focused on articulating official policy positions rather than simply reporting events abroad. Figure 1 illustrates that mentions of major foreign powers, such as the United States, Japan, Russia, the United Kingdom, and France, remained relatively stable from the early 1990s through the mid-2010s. Beginning around 2016, however, coverage of all five countries declined sharply, with references to the United States falling particularly dramatically. This decline occurred despite growing geopolitical competition and China’s increasingly active role in international affairs, suggesting that changes in People’s Daily coverage may reflect shifts in propaganda priorities rather than the objective importance of foreign countries.

Building on these findings, this study examines how Chinese state media frames key international organizations, offering a window into elite understandings of global governance and China’s place within the international order. I conducted a preliminary textual analysis using Li et al.’s (2025) data to identify articles mentioning the United Nations (UN), World Trade Organization (WTO), International Monetary Fund (IMF), World Bank/ International Finance Corporation (IFC), and the World Health Organization and drew a small random sample of articles about each for qualitative content analysis. While limited in scope, this approach provides an initial assessment of how Chinese state media frames major international organizations.

Figure 2 places coverage of major international organizations (IOs) in comparative perspective. Unlike coverage of major foreign powers—which declined sharply after the mid-2010s—mentions of international organizations remained relatively stable. References to the United Nations consistently exceeded 1,200 annual mentions throughout the period, surpassing the coverage of every individual foreign country except the United States. Coverage of the IMF and WTO fluctuated substantially, peaking during the Asian Financial Crisis (1997) and China’s accession (2001) debates, but remained well above 1990s levels through much of the 2010s. This relative stability is notable because it contrasts sharply with the dramatic decline in People’s Daily coverage of major Western powers documented by Li et al. (2025). Coverage of major international organizations remained comparatively resilient and suggest that IOs continued to occupy an important place in official discourse during the Xi Jinping era.

A qualitative review of sampled articles helps explain this pattern. International organizations were generally framed positively and associated with themes of world peace, economic development, international cooperation, and multilateral governance. Discussions of reform focused on improving representation for developing countries, increasing institutional effectiveness, or strengthening global cooperation rather than questioning the legitimacy of the organizations themselves. When China’s interests were discussed, they were typically presented as compatible with broader international goals. Coverage of the World Bank and IFC, for example, frequently highlighted the role of development finance in promoting economic growth and shared prosperity.

Together, these findings provide preliminary evidence that Chinese state media does not portray the pillar IOs of the liberal international order as obstacles to China’s rise. Rather, they are generally depicted as useful platforms through which China can advance its interests in a multipolar world4. The findings also point to a broader narrative of growing Chinese confidence in its international role. Contrary to expectations that Beijing seeks to bypass or replace existing organizations through new institutions such as the Asian Infrastructure Investment Bank (AIIB), People’s Daily coverage suggests a strategy of engagement and influence within major IOs rather than seeking to dismantle them. At a time when the United States has become more skeptical of multilateralism, Chinese state media increasingly presents leadership in international organizations as both beneficial to China and essential for global governance.

While this exploratory analysis cannot resolve broader debates about China’s long-term intentions toward the liberal international order5, it is more consistent with interpretations that emphasize adaptation and engagement rather than outright rejection. More broadly, the findings illustrate the value of official media as a source of evidence about elite attitudes toward global governance.

In the fall of 2018, I and my co-authors were watching in fascination as President Donald Trump launched the most aggressive trade action against China that the U.S. had seen in decades. From our perspective as political economists, we wondered whether these new trade barriers would spur mobilization by businesses that saw increases in their supply costs. Given the enormous volume of trade with China, amounting to $505 billion of imports in 2017¹, we had ample reason to think that businesses would be upset. However, we did not know if the tariff costs would translate into real political action, especially for smaller companies that may not have the resources to stay up to date with rapidly changing tariff schedules but are nevertheless exposed to disruptions to overseas supplies chains.

To understand this dynamic, in 2019 we implemented an online experiment in which we provided business managers and employees with very specific information about tariffs that affected imports in their industries—such as increased aluminum costs and their effect on manufacturing inputs. Crucially, we provided this highly specific information only to a randomly selected treatment group, and to a control group we communicated only the very general impacts of the trade war. Following treatment, respondents were invited to consider taking political actions such as contacting Congressional representatives to either support or oppose the trade war.

To our surprise, we did not find much effect from providing this information on our respondent’s choices. Those who received this information and those who did not had roughly the same interest in political action. When we looked deeper, we found that the factor that best predicted their support for the trade war was not tariff input costs but rather their company’s political culture. Managers who worked at firms that had a largely conservative political culture tended to support the trade war and those who worked at left-leaning companies tended to oppose it. This finding helps bridge two previously disconnected literatures by showing that while partisan effects are well established in studies of individual trade attitudes, they are far more surprising when observed at the firm level, where international political economy models have long assumed that firms should care about the impacts to their business over anything else.

Since that time, tariff barriers have grown even higher2, and now cover imports from all around the world, not just China. Our analysis suggests part of the reason that companies have failed to mobilize against the trade war has to do with their political views, which apparently can prevent them from acting to advance the company’s best interest. Of course, our results also depend on the broader macroeconomic environment, and it could well be that a worsening U.S. economy leads to more widespread disapproval of tariffs among American firms and consumers3. In the end, partisan loyalty can be expensive for companies to maintain, and we do not know exactly when politics ends and corporate self-interest takes over.

The 2025 David P. Baron Award has been awarded to Lindsay R. Dolan, Robert M. Kubinec, Daniel L. Nielson and Jiakun Jack Zhang for their article "Tariffs and corporate political activity: a survey experiment on US businesses" (Volume 27, Issue 3)

Chinese designs on the Pacific are no secret. Ever since assuming power in 2012, Xi Jinping has directed the rapid militarization of various islands and shoals in the South China Sea. These developments are often paired with episodes of intrusion and harassment by Chinese vessels in the waters of its neighbors. Nations like the Philippines, Taiwan, and Japan have found their ships rammed, chased, or stalked by Chinese craft. China is unrelenting in mounting pressure for its claims in the Pacific, with no indication of subsiding.

China began asserting its claims to the South China Sea in the late 2000s and early 2010s. In response to exclusive economic zone (EEZ) filings by Malaysia and Vietnam in 2009, China issued notes verbales asserting jurisdiction over the relevant waters to these nations, while also publishing the “Nine-Dash Line.”¹ The EEZs of various nations and disputed landmasses lie within this Nine-Dash Line. Key focal points are the Paracel Islands, Spratly Islands, Scarborough Shoal, and Senkaku Islands.²³⁴⁵ China claims all of these areas, though maintains control in just the Paracel and Spratly Islands respectively.

Although sometimes violent, China’s attempts at asserting authority over these disputed territories has stopped short of invasion, instead involving what scholars call militarized interstate disputes (MIDs) and international crisis behavior (ICB). The former term comes from Douglas Gibler’s International Conflicts, 1816-2010: Militarized Interstate Dispute Narratives. In this work, an MID is defined as “a threat, display, or use of force by one state against another state.” For example, a Chinese naval vessel shadowing a Filipino craft within the EEZ of the Philippines would be an MID. An ICB, while similar, is a step above a simple threat or use of force. Rather, it is a specific incident that can be classified as an international crisis or diplomatic incident between two nations. While every Chinese incursion into Filipino waters is an MID, for example, only incursions that lead to some form of diplomatic incident or rupture between the two nations can be classified as an ICB. This term comes from Michael Brecher and Jonathan Wilkenfeld’s A Study of Crisis, which documents ICBs from 1918 to 2019.

Between 2018 to 2025, 7 ICBs have been documented between China and its neighbors. For context, A Study of Crisis documents 3 ICBs concerning China between 2010 to 2017. Of these seven, five consisted of Chinese incursions into the legal waters of its neighbors, often culminating in harassing or ramming foreign vessels. The remaining two consisted of the Chinese-Indian Skirmishes of 2020-2021, and the live-fire drill that the People’s Liberation Army-Navy (PLAN) conducted within the flight lanes of Australian commercial jets. These ICBs mark a clear increase in number compared to those recorded by A Study in Crisis prior to 2018. One possible explanation for this is the “Decision of the Standing Committee of the National People’s Congress on the Exercising of the Marine Right Safeguarding and Law Enforcement Functions and Powers by China Coast Guard.” Promulgated in 2018, this law vested the Chinese Coast Guard the authority to act as law enforcement within the Nine-Dash Line. However, this framework is often weaponized by Chinese authorities to justify their aggressive actions in the South China Sea, thus leading to an increase in incidents. One such example took place in 2020, where a Chinese naval craft rammed and sank a Vietnamese fishing vessel around the contested Paracel Islands. Chinese authorities justified the act by stating the Chinese Coast Guard were enforcing a fishing ban, a power that the aforementioned 2018 law had given them.

It is no surprise then that MIDs are also plentiful post-2018. In a project I undertook as a research assistant for the Trade War Lab, I recorded a comprehensive list of MIDs between 2018 and 2023. I documented over 200 specific cases of territorial incidents between China and another nation. Much like the ICBs, these incidents did not lead to any change in the status quo. Moreover, the vast majority of these MIDs concerned territorial issues in the South China Sea, often consisting of Chinese naval craft and or fishing vessels entering into and then harassing ships in foreign waters. Japan and the Philippines were the maritime neighbors of China with the most MIDs, at 47 and 33 respectively. Additionally, nations like Malaysia, Indonesia, and Vietnam were each involved in multiple incidents with China. Interestingly, many of these MIDs centered around oil survey ships passing through their EEZs, suggesting that China possesses economic interests in enforcing their Nine-Dash Line as much as they do territorial ones.

The dataset also records a number of US encounters with China. The reason for this is that US naval vessels often perform freedom of navigation operations (FONO) in international waters that China claims as part of the Nine-Dash Line. Germany, the UK, and Canada had their own run-ins with Chinese authorities for the same reason. These FONOs were typically protested in statements by China for violating their sovereignty. Lastly, it must be noted that this dataset did not record the often-daily airspace violations performed by the PLA against Taiwan. While these are certainly MIDs, these incidents were outside of the scope of a project that primarily focused on maritime MIDs (with the exception of China’s contested border with Bhutan and India) and frankly were too numerous to be recorded in detail.

Analyzing the MIDs and ICBs indicate two things. Firstly, it highlights the consistent pressure the PRC puts on its neighbors. Whether it be through oil surveys or harassing fishing vessels, there is a concentrated effort to bully and fatigue countries like Japan and the Philippines. Secondly, the increase of ICBs post-2018 indicates an escalation in these efforts. Based on the 2018 Chinese Coast Guard Law, China views the waterways and landmasses within the Nine Dash Line as integral to China, regardless of international conceptions of sovereignty. In a world where the stability of the United States and the post-WWII Global Order it supports are in doubt, it remains to be seen if these gray-zone pressures will increase as they had done after 2018.

Dear Reader:

Many of us at the Trade War Lab were skeptical when a group of ambitious new research assistants began talking about starting a Substack in April 2025. Partially responsible for the publication’s content as lab manager, I wondered what wisdom a group of twenty-somethings could add to the conversation about trade politics. At the same time, the lab had just lost federal funding. Launching a publication worth reading, among all the lab’s other projects, was going to be an uphill climb.

Looking back, launching the Substack is one of the achievements the lab is most proud of this year. Nearly every research assistant has contributed at least one article. In particular, Charlie Andrade’s role in pushing the lab to actually launch a Substack rather than just talk about it, and his excellent graphic design skills, were key to the publication’s success. Lance Lang, Maddie Doyle, and Stephen Zaken’s enthusiasm for taking assignments was also crucial. Editing the Substack and watching research assistants improve both their writing and their understanding of social science research has been the most rewarding part of my job.

Charlie, several RAs, and I are all moving on to new things with the end of the school year. The Substack will be left in good hands – more on that later – but first, I wanted to close out the year by pulling together the literature we’ve covered into a coherent (slightly editorialized) set of insights about firm politics and U.S.-China relations.

Background

After an amicable period during which many political elites believed open trade with China would liberalize their political system, two things became apparent. First, although it remains contested whether Beijing actively seeks to undermine the liberal international order, it has neither become a trusted democratic ally nor refrained from building its own capacity for economic coercion. Second, despite free trade’s national-level benefits, globalization produced isolated sets of “economic losers” in labor-intensive industries. For one reason or another (possibly some combination of voter backlash, elite security concerns, and political opportunism) these two outcomes preceded a sharp protectionist turn on both sides of the aisle.

The new politics of trade

Free trade is out, and something-short-of-autarky is in. America’s trade policy has been hawkish compared to other countries. For example, Japan’s approach to “de-risking” involves narrowly targeted legislation aiming to reduce dependence on China in industries key to national security, an initiative firms have responded to. In the U.S., policymakers’ approach to China has been broader, politicized, and, in the case of Trump’s most recent trade policy, dubiously legal.

Firm responses to the United States’ most high-profile strategy for disentangling Washington’s economy from Chinese supply chains – tariffs – vary significantly between companies. The first trade war did prompt a relatively small number of companies to exit China because of rising political risk, but corporations with large capital investments in China have largely stayed put. Some companies divert their supply chains in the face of economic barriers to trading with non-allies, but they only do so when there are safer third-country suppliers.

Even with some limited disinvestment from China, new supply chains are not necessarily more resilient to Chinese influence than previously. Countries that are highly interconnected with China have seen the fastest increase in trade with the United States since the first trade war. Although friend-shoring occurred, key determinants of which countries replaced Chinese suppliers were whether existing exports could function as substitutes and how quickly countries could ramp up production.

Where is the backlash?

Given that early evidence suggests American efforts to disentangle supply chains from Chinese influence were ineffective, why haven’t companies, faced with higher costs, protested? In our own survey of Kansas City–area firms the vast majority opposed tariffs. Indeed, trade restrictions were followed by a sharp increase in trade-related lobbying, but few companies have protested publicly. Conventional wisdom suggests that corporations should play a significant part in swinging political pressure back towards liberalization, especially considering American institutions are particularly amenable to special interests.

One answer might be that individual companies are avoiding public opposition to the trade war as a whole. Large companies appear to have successfully lobbied for tariff exclusions that benefit specific products they import, leaving smaller companies to fend for themselves if they do not use those products. Firms may also be lobbying as part of global supply chains, as opposed to collectively as industries, producing small carve-outs rather than more costly general opposition to tariffs. A political environment where companies may fear backlash if they publicly criticize tariffs and other trade barriers could also contribute to the use of quieter, narrower political influence tactics.

A second, possibly more concerning, reason could be political polarization. Corporations’ opinions on tariffs appear to be highly partisan. Even when firms are given information about the costs of tariffs, political culture outweighs knowledge of tariffs’ negative effects when determining which firms say they will reach out to representatives. This effect is not just talk: Farmers in more conservative areas were more likely to continue planting crops targeted by Chinese retaliatory tariffs in 2019, believing Trump’s assurances that these commodities’ plunging values would be temporary. If these studies are representative, the strength of business owners’ political loyalties could prevent them from organizing around what is best for their bottom lines.

Next steps for the Trade War Lab Substack

In sum, the politics of trade have changed rapidly in the past decade. Business interests have not mobilized to oppose these new trade restrictions to the extent scholars expected, despite the costs they impose. Further, broad tariffs seem unable to eliminate U.S.-Chinainterdependence.

These issues are the subject of a growing body of research in international political economy (IPE). With editing taken over by political science PhD student Callie Raacke, I am confident the Substack will identify and explain the best new research being produced. Under Callie’s guidance, the lab also plans to expand into covering classic works in IPE and showing how they can help us explain today’s trade politics. Finally, Masha Shirikov will be taking over our graphic design.

I am excited to see where the next group of editors and writers takes the Substack. There will be no shortage of important subjects to cover. If you are a University of Kansas undergraduate interested in contributing to IPE research and the Substack, look for the application for the fall internship in September. We’d love to have you!

The chaotic disruption of oil transportation through the Strait of Hormuz has strangled global energy markets. With Brent crude trading at $114 per barrel and U.S. gasoline prices averaging $4.45 per gallon, consumers, producers, and governments alike find themselves looking for pathways to minimize exposure.

This kind of disruption is severe, but not new, even in recent memory. The Russian invasion of Ukraine triggered a comparable disruption in global energy markets, driving oil prices from roughly $70 per barrel in early 2021 to $120 per barrel by mid-2022. Western economies were forced to draw on strategic reserves and accelerated efforts toward energy diversification.

The market volatility of the past few years, and, in particular, past few months, has reinvigorated political urgency globally surrounding the adoption of renewable energy. Green energy capacity and deployment have reached historically high levels,already accounting for 88% of new power generation in the United States and China both.1

As demand for alternatives to oil in the form of green energy accelerates, it feeds directly into the evolving economic competition between the United States and China. Control over green technology supply chains has become a central axis of the Trade War and presents an important long-term consideration: How do the United States and China currently compare in their green energy capabilities, and what does the balance imply for the next phase of their strategic and economic competition?

At the same time, both countries have deployed industrial policies to shape domestic green industries. Despite harsh cuts enacted by the Trump administration, the Inflation Reduction Act provides subsidies tied to domestic production and allied sourcing, aiming to build resilient supply chains.2 In addition, “friendshoring” strategies such as the 2023 U.S.–Japan critical minerals deal illustrates the intensifying effort to restructure green energy supply chains around trusted partners.3 China, by contrast, has pursued a long-term state-led strategy. By combining subsidies, low-cost financing, and industrial coordination, China now accounts for over 80% of global solar manufacturing capacity and roughly three-quarters of global battery production.4 More importantly, China’s dominance extends upstream. It refines approximately 60% of lithium, 70% of cobalt, and nearly 99% of battery-grade graphite, creating deep dependencies even for diversified supply chains.5 This upstream control ensures that relocation of final assembly does not eliminate reliance on Chinese inputs.

China’s pricing power further reinforces its position. Supported by economies of scale and state backing, Chinese solar and battery products are often 20–30% cheaper than competitors.6 This allows firms to capture global market share while pressuring Western producers. China accounts for more than half of global renewable energy capacity additions.7 Globally, China’s reach extends through exports and infrastructure development. As the largest exporter of solar panels and electric vehicles, it has established a strong presence across developing markets.8 Through the Belt and Road Initiative, China finances and builds energy infrastructure abroad, embedding its technology within long-term development pathways.9

Green energy has rapidly emerged as a core arena of U.S.–China competition, further extending the Trade War into advanced manufacturing and innovative technologies. The United States has increasingly relied on tariffs and trade restrictions to counter China’s position. In 2024, the U.S. imposed tariffs of up to 100% on Chinese electric vehicles, citing unfair subsidies and national security concerns.10 The tariffs escalated further following the Trump administration’s “Liberation Day” announcement, peaking at 135%.11 In tandem, the U.S. has maintained long-standing section 301 anti-dumping and countervailing duties on Chinese solar products through the U.S. Department of Commerce.12 More recently, this approach has broadened beyond finished goods to upstream inputs critical to the green transition, including expanded tariffs on lithium-ion batteries.13 These restrictions follow tightening restrictions on Chinese semiconductors and advanced technology exports used in electrical systems and computing.14

The two economic powerhouse’s positions on green energy expose a clear asymmetry: China dominates green energy manufacturing and upstream supply chains, while the United States is still working to buildout capacity and secure sourcing alternatives. Trump’s Iran policy, by contributing to oil market instability, is accelerating the global shift toward renewables—unintentionally strengthening demand in sectors where China has positioned itself as a leader. Ultimately, the political consequences of clean energy’s ascendance will depend on whether the United States can translate policy and alliances into scalable production before China’s advantage becomes too deeply entrenched.

Law & Geoeconomics (L&G) and the Trade War Lab are bringing together contributors to a forthcoming special issue on economic security agreements.

Thursday, May 14, 2026 @8:00-9:00am CDT (Zoom)

RSVP: https://forms.gle/2md4PFrGiHmdr6VN9

These arrangements have proliferated rapidly in recent years—spanning supply chains, critical technologies, export controls, and investment screening. Yet they resist easy categorization. They often resemble trade agreements in form but operate as security instruments in practice. Understanding them requires crossing disciplinary boundaries, which is exactly what this discussion aims to do.

This webinar brings together a set of perspectives from leading experts who will help map the emerging landscape of economic security cooperation and what this means for the future of global trade governance. Taken together, the discussion will highlight both the promise and the tension at the heart of economic security cooperation: the desire for deeper coordination in an era of geopolitical competition contributing to greater uncertainty about how far existing institutions can accommodate this shift.

The essays in this special issue also reflects the broader mission of Law & Geoeconomics: to serve as a platform for rigorous, double-blind peer-reviewed scholarship at the intersection of law and power politics in the global economy. We hope you’ll join us for what should be a wide-ranging and timely conversation.

Moderators:
Sarah Bauerle Danzman (Co-Editor-In-Chief Law & Geoeconomics and Associate Professor of International Studies, Indiana University, Bloomington)

Jack Zhang (Director of the Trade War Lab and Associate Professor of Political Science, University of Kansas)

Panelists:

Author: Daniel Drezner (Academic Dean and Distinguished Professor of International Politics at The Fletcher School at Tufts University)

Title: The Oxymoron of Economic Security Regimes

Abstract: As the open liberal economic order suffers from senescence, there has been a surge in economic security agreements—which now exceed 300 worldwide—as governments increasingly prioritize national security through policies like supply chain resilience, export controls, and critical mineral stockpiling. The paper considers the international relations theory underlying this shift – and the theoretical reasons for skepticism. While economic security is becoming a central organizing principle for international economic policy, its implementation faces significant obstacles. These include vague legal underpinnings, the risk of an economic security dilemma, and the lack of credible commitment from leading economies. Consequently, the long-term sustainability of economic security regimes remains highly uncertain.

Author(s): Mireya Solis (Philip Knight Chair in Japan Studies at the Brookings Institution) and Saori Katada (Louis G. Lancaster Chair of International Relations at the University of California, Santa Barbara)

Title: New Terms of U.S.-Japan Economic Security Cooperation: A Trump Reset?

Abstract: This commentary discusses how economic security has become a central issue-area in U.S.-Japan relations. The bilateral cooperation between these two large and technologically advanced economies constitutes a vital component of collective resilience. Facing the shifting geopolitical ground under the second Trump administration, Japan is actively retooling its economic security strategies, finding both areas to deepen its relationship with the United States and at the same time grappling with a less reliable partner. On the one hand, Japan’s build-up of strategic indispensability could help address U.S. needs and enhance Japan’s leverage. On the other hand, due to the Trump administration’s unilateral actions, the Japanese government faces greater challenges in building collective resilience amongst the “like- minded.” Japan has to aim for economic security in an ever more anarchic world, where the great powers are not willing to pitch in to provide (and abide by) a global economic order.

Author: Peter Harrell (Nonresident fellow at the Carnegie Endowment for International Peace American Statecraft Program)

Title: The Economic Security Elements Of America’s New Trade Deals: Economic Security With Hegemonic Characteristics

Abstract: In 2025, the United States began incorporating economic security provisions into the so-called trade agreements that President Trump signed with nearly 20 countries. These provisions cover both offensive tools, such as investments to boost U.S. and allied supply of critical materials, and defense provisions, such as export control cooperation and cooperation on tariffs. The deals are still in their early days and have yet to be implemented. This article provides an early assessment of the economic security provisions of the deals and makes policy recommendations as they move towards implementation.

Author: Maria Shagina (Diamond-Brown Senior Fellow for at the International Institute for Strategic Studies (IISS) Geoeconomics and Strategy Programme)

Title: Export Controls in US-led Trade Agreements

Abstract: Economic security trade agreements are emerging as the United States’ newest instrument for extending export-control enforcement beyond US borders. Rather than relying solely on domestic rules, extraterritorial licensing, and ex post interdiction, the second Trump administration is embedding anti-diversion and enforcement obligations directly into bilateral trade deals—explicitly linking tariff treatment and market access to partner action on export controls, customs enforcement, transaction screening, data sharing, end-use checks, and cooperation on investigations. In agreements, third countries are not merely encouraged to align; they are operationally folded into a US- anchored enforcement perimeter, turning trade partners into auxiliary nodes in the export-control ecosystem. That is what makes these agreements qualitatively distinctive: they are not traditional trade liberalisation instruments, nor are they standard export-control cooperation statements—they are trade contracts that condition preferential tariff treatment on measurable enforcement behaviour.

Author: Henry Gao (CIGI Senior Fellow and Law Professor at Singapore Management University)

Title: Decoding Trump’s Economic Security Agreements: It’s All About China

Abstract: This commentary examines the emergence of a new category of US trade agreements, beginning with the US–UK Economic Prosperity Deal and extending to recent arrangements with Southeast Asian and Latin American partners. Although these agreements fall short of traditional free trade agreements and are often dismissed as shallow because they do not liberalize substantially all trade, this paper argues that such assessments miss their strategic significance. Precisely because they depart from the FTA model, these agreements illuminate the evolving priorities of US trade policy: the elevation of economic security over liberalization, alignment over reciprocity, and control over efficiency. The commentary analyzes the structure and function of these arrangements, showing how they are designed to address the “China shock” indirectly through third countries, and assesses their implications for China, US partners, and the future trajectory of the global trading system.

Law & Geoeconomics (L&G) is a new double-blind peer-reviewed journal that aims to be at the forefront of the emerging interdisciplinary field of geoeconomics. The journal provides a platform for scholars to rigorously analyze:

1) The role of economic power politics in shaping the laws and norms that govern the global economy

2) The role of law in conditioning power politics by economic means

This is an excellent outlet for scholars working on topics such as economic statecraft, weaponized interdependence, economic diplomacy, economic security, economic warfare, or geoeconomics broadly, and we warmly invite you to join us for this event!

America’s current political upheaval surrounding free trade has brought trade policy preferences to the fore. While public discourse often focuses on the divide between labor and the C-suite, this debate misses another critical but overlooked cleavage: firms within the same industry are often divided over trade policy

This divide is rooted in firm-level differences. Large firms with greater capital resources and more competitive business models can pay the high fixed costs that offer them access to export markets and the ability to offshore production. Smaller firms, by contrast, tend to face intensified competition from imports without comparable market access.1 Not all industries rely on global trade: in these sectors, large firms do not benefit from lower trade barriers, producing unified preferences for protectionism among all firms within these sectors. However, in industries characterized by intra-industry trade (IIT) or global value chain (GVC) participation, whether firms are large enough to benefit from global integration divides companies, with large firms favoring liberalization and small firms preferring protectionism. As a result, globally integrated industries can be internally fragmented along pro-trade and anti-trade lines.

Existing scholarship has largely explained the policy consequences of these divisions through a collective action framework. Large firms, with greater resources and organization, are better positioned to influence policy. Smaller firms struggle to rally resources and coordinate. As a result, the preferences of large firms are expected to determine policy.

Sujin Cha’s and Ian Osgoods’ 2025 article centers on how special interest institutions (SIIs) — domestic political rules that increase the access or influence of interest groups over policy makers — mediate the relationship between corporate trade policy preferences and policy outcomes. These include campaign finance laws that allow corporate contributions, lobbying regulations, and formal mechanisms for policy feedback. Cha and Osgood hypothesize that the effect of special interest institutions on trade policy depends on the structure of the industry. In industries without intra-industry trade or GVC integration, stronger special interest institutions lead to higher trade barriers. Conversely, in industries with IIT or offshoring, they produce lower barriers. They further expect that the trade-liberalizing effects of IIT and GVCs will be strongest where special interest institutions are most developed.

To test their theory, Cha and Osgood combine extensive data on tariffs and trade flows across millions of product-country-year observations. They draw on the World Integrated Trade Solution and BACI datasets, documenting intra-industry trade and GVC participation as a measure of industry preferences. To capture global value chain participation, they incorporate data from the OECD. Their primary measure of SSIs is based on corporate political contribution rules compiled by the International Institute for Democracy and Electoral Assistance.

The paper’s findings show that the effect of special interest institutions on trade policy are highly contingent on the level of intra-industry trade. In industries with low IIT, where firms are more uniformly threatened by imports, increasing the influence of special interest institutions leads to higher tariffs. In these contexts, organized interests are aligned in favor of protectionism, and institutional access reinforces this outcome.

The impact of high IIT on tariffs is strongest in environments with robust special interest institutions. Where firms have greater political access, increases in IIT are associated with significantly lower trade barriers, reflecting the influence of globally integrated firms. Where such institutions are weak, the liberalizing effect of IIT is more limited.

The analysis of GVC integration yields parallel results. In industries with low GVC participation, increasing the influence of special interest institutions leads to higher tariffs, as firms are more uniformly protectionist. But as GVC integration increases, this effect diminishes and can reverse, with institutions instead facilitating lower trade barriers. At the same time, the trade-liberalizing impact of GVC integration is strongest in contexts where SSIs are well developed. When firms have greater access to policymakers, globally integrated firms are better able to translate their preferences into policy outcomes. Overall, the findings demonstrate that SSI’s play a moderating role: they amplify the preferences of the most powerful firms within an industry.

Cha and Osgood show that special interest institutions allow the most organized and well-resourced actors to exert outsized influence over trade policy. However, this influence does not produce uniform outcomes. Instead, its effects depend on the structure of the industry and the relationship to foreign competition of the industry.

As trade policy continues to shift in response to evolving global supply chains and economic tensions, this framework helps explain why countries and particular industries adopt different levels of protectionism or liberalization. By accounting for variation in both political institutions and industry structure, it shows how similar pressures can produce divergent trade outcomes across countries and sectors.

US China relations are at a precarious moment. The upcoming U.S. China summit may shape the future of this increasingly adversarial bilateral relationship. Against this backdrop, on April 7, 2026, former U.S. deputy secretary of state Stephen Biegun and former deputy chief of mission at the U.S. Embassy in Beijing and senior director for China and Taiwan affairs at the White House National Security Council Sarah Beran, joined the National Committee on U.S.-China Relations to discuss the state of the U.S.-China relationship and its future prospects.

The conversation began with an analysis of rising tensions in Iran and the upcoming Trump-Xi Summit. Biegun predicted that negotiations between the U.S. and Iran will continue before full-fledged escalation occurs. Although China benefits strategically from a distracted United States, the impact of energy disruptions makes this approach unappealing for China in the long-term. Both Biegun and Beran agreed that the collaboration between Trump and Xi is necessary to cool tensions in the Middle East and the Trump-Xi summit is a productive start to this collaboration. They also discussed Trump’s top-down, unpredictable approach to foreign policy, suggesting it keeps Chinese officials off-balance, undercutting their ability to create a long-term strategy.

The speakers also addressed the strategic standstill between China and the United States. They emphasized how the relationship between the two countries resembles a stalemate, with Trump opposing his own administration’s efforts to improve it. Trump aims to form agreements with Xi; however, his administration is focused on deterring Chinese influence. This results in muddled policy outcomes, despite the lofty stated goals of the Trump administration.

Economic competition was another focus of the Town Hall, most notably in areas like trade, EVs, and emerging technology. The speakers discussed the broad impact of tariffs on Chinese goods, noting that they reduced the U.S.-China trade deficit from $300 billionto $200 billion. This major drop was followed by a $1.2 trillion increase in Chinese exports globally, indicating Chinese goods have been redirected through other pathways to the United States. China’s domestic industries, like EVs have received increased media attention for their overproduction and subsidization. Other goods imported from China, like critical minerals, are vital to U.S. supply chains. This creates a national security risk, as dependency provides China with additional economic influence.

To conclude the CHINA Town Hall, both Biegun and Beran discussed their shared opinion that the U.S.-China relationship is stronger and more stable than the public perceives. Although their relationship is rooted in geopolitical tension, there exists an unescapabledegree of interconnectedness between the two economies that keep their relationship intact. They determined that the next few weeks would shape the future of the U.S.-China relationship in the short-term, but it is unlikely that core disagreements will be resolved immediately.

Global Value Chains (GVCs) are an integral part of the modern economy. A GVC is achieved when the production of a single good is broken down across countries before reaching its destination. From the textile mill to the rack at Macy’s, companies up and down these GVCs have a common interest in the entire system running smoothly: disruptions at any point can affect their business, even when the disturbance does not directly involve their own imports or exports. Despite this interdependence, most theories expect firms to organize at the industry level to oppose trade barriers, or, more recently, large firms lobby individually to protect their own products.

A recent article by Hao Zhang (Princeton University) seeks to explore how GVCs have fundamentally changed the way firms form trade coalitions and lobby. The author presents a new theoretical framework where GVC linkages serve as an important determinant of trade preferences and collective political action. This framework starts from the basis that industries and firms do not exist in isolation, instead they are interconnected through various production linkages.

Zhang’s theory begins with the idea that there are “upstream” producers who make input products (ie. textile mills), midstream producers who take those raw good from the upstream producer and shape them (ie. using textiles to manufacture clothes), and finally downstream producers who distribute the product produced by the midstream firm (ie. retailers selling clothes). Using the apparel example, one might assume that an upstream firm producing and selling textiles abroad is unaffected by tariffs downstream firms pay to import clothes. Except in the GVC model, they are. Zhang notes that the whole system is integrated, meaning upstream producers lose business if companies down the line face higher costs, and downstream companies are in trouble if their imports get more expensive. Thus, Zhang theorizes that we should expect to see companies across GVCs lobby for free trade. This is why we see textile manufactures lobby against tariffs on clothing imports. Further, coordination barriers should be lower for firms in integrated supply chains. These companies are already coordinating constantly, making it easier to organize across GVCs than within industries, where firms must cooperate with competitors.

The dataset compiled by the author to support this framework empirically is made up of firm-to-firm supply chain networks for public US firms from 2003 to 2020. This data was compiled using millions of public intercompany relationship records published on FactSet. Connecting this data with over 82,000 lobby reports on trade and tariff issues, Zhang shows that GVC firms tend to lobby together (that is, they lobby at the same times that their GVC partners are lobbying), lobby on the same bills, and hire the same lobbyists. In fact, the probability that a firm with an average number of GVC partners lobbying will also lobby is roughly double that of a firm with no GVC partners actively lobbying. The author also demonstrates that, in industries with high levels of GVC integration among leading firms, the probability of collective industry lobbying increased from almost 0% to 30%.

In addition, the author suggests that GVC linkages extend beyond coordinated lobbying to shaping actual policy. The author uses the case of preferential trade agreements (PTAs) to illustrate this effect. According to the data presented, two countries that exist withinthe top 10% of values in GVC linkages are over 50% more likely to form new PTAs than countries that exist within the bottom 10%. Zhang argues that this shows GVCs play a significant role in driving the demand for trade liberalization during the height of global production.

Companies do not exist in isolation, effected only by trade restrictions on products they buy and sell. Instead, firms are concerned with trade policy up and down their supply chains. Zhang’s evidence suggests that businesses coordinate along GVCs because they share common interests, and existing communication structures between firms on the supply chain makes it easier for them to organize. This theory provides a new way of thinking about coordinated corporate influence that goes beyond an individual firm’s or industry’s influence.

When Viktor Yushchenko was elected President of Ukraine in 2005, his government nationalized firms and sold them to new owners in a process it called “reprivatization.” The targeted companies had few connections to the incoming president but had been closely associated with former President Leonid Kuchma and his chosen successor Viktor Yanukovych. In Turkey, the AKP amended public procurement law over 150 times in a single decade, expanding government discretion over contracts and directing high-value awards to firms whose owners had political ties to the party.

A paper by Timm Betz and Amy Pond (Washington University in St. Louis) argues that episodes like these are extreme examples of a more routine consequence of political turnover. Political connections channel benefits to firm owners through favorable contracts and selective regulatory enforcement. When leadership changes, a new set of individuals gains those connections while the old set loses them. The owners who lose out value their firms less than they did before while newly connected buyers value those same firms more than the current owners do. That gap makes ownership transfers more likely, and Betz and Pond find that it happens frequently across non-OECD countries.

Betz and Pond build a formal model around this logic and use it to generate predictions about where the effect should be strongest. Firms that rely on immobile assets like plants and heavy equipment cannot credibly threaten to relocate when political conditions shift, which makes their owners especially vulnerable to political turnover and attractive to newly connected buyers. Firms with mobile assets can threaten to leave, giving them leverage no matter who holds office. Ownership clarity matters too. Some firms nest their ownership in shell companies based in tax havens, making it harder for governments or connected buyers to figure out who actually owns them, and consequently making it less likely ownership will change hands following a political transition. The strength of property rights in a given country also shapes the dynamic. In countries with impartial courts, owners who lose their political access can seek legal remedies, limiting the advantage that new connections provide. Where courts are unreliable, those advantages grow and ownership changes become more frequent after political transitions.

The authors test these predictions using Bureau van Dijk’s Orbis database to identify direct shareholders of up to the 5,000 largest firms in each of 87 non-OECD countries. They track changes in the identity of each firm’s controlling owner from 2008 to 2018, defining controlling owners as shareholders with at least a 50% stake. Political turnover is measured using the REIGN dataset, which records each instance of a new political leader coming to power. In a given year, 12.3% of firms in their sample experienced an ownership change, and 41% experienced at least one change over the full sample period. In the simplest regression, political turnover is associated with a 2.2 percentage point increase in the probability of ownership change, a 17.2% increase relative to the sample average. That result holds when the model is expanded to control for country-level attributes, as well as firm revenue, size, and industry. Ownership turnover following political change is larger among firms with immobile assets and publicly recorded owners, and in countries with weaker property rights.

Because political and economic disruptions often coincide, the authors run a separate analysis restricting the sample to presidential systems where executive elections follow fixed constitutional schedules and cannot be called early, ensuring that the timing of leadership change is not driven by economic conditions. This model’s estimates track the baseline findings closely. A new political leader produces a 2.5 percentage point increase in ownership turnover. The authors also run a model replacing ownership turnover with managerial turnover as the outcome variable. If general economic disruption were behind the results, managerial turnover should respond to political change in the same way. It shows no such response. Political turnover predicts changes in who owns firms but not changes in who manages them.

Betz and Pond also examine what these ownership changes mean for firm performance. They find evidence suggesting that owners who take control during periods of political turnover earn higher profits and pay lower taxes as a share of profits. The results are exploratory, but they gesture at the practical stakes of politically motivated ownership transfers and suggest that new owners benefit financially from their connections to incoming leadership.

The findings suggest that the consequences of political turnover extend well beyond changes in policy or government personnel. When leadership changes hands, the effects reach into the ownership structures of firms, and especially into firms with immobile assets, transparent ownership, and limited legal protections. Betz and Pond show that this process is not confined to the dramatic episodes of expropriation and reprivatization that make headlines in places like Ukraine and Turkey. Ownership turnover is a routine consequence of the way political connections shape who owns firms and how much those firms are worth to their owners.

In the midst of rising geopolitical tensions, multinational firms are increasingly caught between the government’s interests in national security and protecting their own bottom-line. Recent national security initiatives, like the 2026 Defense Authorization Act, impose restrictions on foreign investment in strategic technological sectors in China. The US is also strengthening its review of foreign direct investment, or FDI, through the Committee on Foreign Investment in the United States (CFIUS). Despite high economic stakes, firms have mounted little visible opposition to policies that appear detrimental to their interests. Why have multinational firms not pushed back against these restrictions on their investment?

Sarah Bauerle Danzman’s (Indiana University) 2025 article suggests securitization may reduce multinational firm’s ability to influence economic regulations. The author’s theory of “securitized political economy” argues this reduced opposition occurs because political securitization carries credibility and reputational risks for firms who choose to lobby, discouraging the act in the first place, and pushing firms toward quieter, more technical forms of influence. These quieter strategies, which often involve lobbying through business associations, are less effective than individual lobbying because they require companies to coordinate in the face of uncertain costs. If current trade politics is truly securitized, the theory implies that firms are unlikely to be able to curb increasingly protectionist trade policy.

Bauerle Danzman’s theory defines a securitized political economy as the process of transforming a policy into a security concern that is widely understood to pose an existential threat. She argues that, when economic policy is framed as a national security matter, firms lose their political influence, or lobbying power, which makes them less able to publicly oppose regulations. The article claims that securitization primarily affects behavior through fear of backlash or a loss of public credibility. Investors and clients of firms opposing national security legislation may believe that they are acting selfishly, unwilling to protect the greater good of the US during a security crisis, and take their business elsewhere. Business’ concerns about public backlash should be more acute in an era where politicians are willing to malign individual firms for political transgressions. The author also references institutional reputational risks. Opposition to security legislation, especially bipartisan initiatives, could alienate congressional allies and, as a result, firms’ influence in the future. Therefore, to avoid these risks, the author suggests that firms rely on backdoor, trade-association, and technical influence strategies that are less public. Although they are more discrete, since securitization can affect firms in dissimilar ways, associational lobbying can present a coordination problem. Some firms are unwilling to invest time and resources into lobbying against policies if the costs to their business are unclear. In sum, fear of lost credibility or backlash should reduce companies’ willingness to attempt policy influence. When they do try to shape policy, they will turn to associational lobbying as a means of mitigating reputational risk. This “quieter” strategy is less effective than direct lobbying because firms with heterogenous interest will struggle to effectively organize.

Danzman utilizes a case study of the US Foreign Investment Risk Review Modernization Act (FIRRMA); a bipartisan law passed in 2018, to articulate her theory. FIRRMA drastically expanded jurisdiction of CFIUS to have broad authority over investment concerns, much like their recent February 2026 initiative mentioned above. The Act allowed the Treasury Committee to review full acquisitions and smaller or indirect investments when national security concerns could be invoked. Her analysis of this process centered around elite interviews, lobbying data, and public comments on rulemaking regarding FIRRMA.

Table 3, ‘Lobbying expenditures by issue and type of lobby group’ in Bauerle Danzman’s Article referenced above. Source: Kim (2018), Industry classification of lobbying entity/client hand-checked for accuracy

Danzman found that business’s lobbying efforts were limited and largely ineffective. Firms spent about $582 million on FIRRMA-related lobbying from 2017-2022, a modest sum relative to other major economic policies during the same period. She also found FIRRMA lobbying relied more heavily on industry or trade associations, rather than direct firm engagement with institutions. To the extent businesses did attempt to shape the policy, they focused on niche technical adjustments to legislation as opposed to all-out opposition. This pattern reflects the credibility and reputational risks firms face when in opposition to legislation framed as pertinent to national security. This evidence supports the theory that securitization further constrains firm-influence by portraying opposition as contrary to national security, culminating in a chilling effect on firm lobbying. This securitized policy framing, amplified by US politicians’ new-found willingness to single-out individual firms that oppose government policies, often deterred firms from engaging in direct lobbying.

Despite FIRRMAs 2018 appearance on a legislative docket, a trigger-happy President and an increasingly national security focused new cycle illustrate that the idea of securitization prevents firms from effectively opposing policies hurting their bottom lines. By framing economic openness as a national security threat, policymakers constrain not only investment flows but also the political space for opposition. Firms accept narrower, less effective forms of influence at the risk of facing backlash resulting in a shift towards greater state control over economic policy. That brings to light a macroeconomic and governance concern regarding the future of democratic participation and eroding economic opposition to state control.

Following World War II, free trade became a foundational pillar in the international economic order. However, beginning in January 2025, the Trump administration has accelerated the more protectionist approach that began in the first Trump administration and continued during Biden’s term. In early 2025, the United States government announced a 25 percent tariff on both Canadian and Mexican goods, coupled with a 10 percent tariff on Chinese goods. Following their first round of tariffs, the White House declared “Liberation Day,” imposing a broad 10 percent tariff on all imports. This abrupt transition has generated a fear that the broader international trade system will collapse in the face of protectionist trade practices.

In their recent publication, authors Andreas Dür (University of Salzburg) and Alessia Invernizzi (ETH Zürich) argue that, contrary to prevailing wisdom, the international trade system is adaptable, resisting harms from shifting trade practices. Historical patterns suggest the United States has always combined free trade and protectionist policies. Consequently, they conclude, a terminal decline in global trade is far from guaranteed.

The authors aim to explain the United States’ trade policy using two core dimensions:

1. The pressure for protection measures versus free trade.

2. The extent of the linkage between trade and national security.

Public opinion, interest groups, and the political preferences of elites combine to push policy towards or away from trade liberalism over time. The authors suggest that when these pressures support free trade, countries tend to completely liberalize trade or trade with allies. When pressures turn protectionist, states will protect key industries or fully isolate themselves from the global economy.

Therefore, according to the author’s theory, liberalizing and protectionist pressures can each produce two distinct policy outcomes; which of the two is realized in each case depends on the trade–security linkage. A high salience of security link indicates a strong connection between national security and trade in the minds of the public and political elites. For example, trade security linkages could appear if a country is over reliant on geopolitical rivals for goods. On the other hand, a low salience on security link indicates there is no inherent view of trade through a geopolitical or security lens, rather, there is an emphasis on economic policy.

The authors suggest that the United States might be in a state of trade isolationism (quadrant 2), as the country is experiencing both protectionist trade pressures and a salient trade-security linkage. However, they also argue that protectionism is currently a far more crucial factor than security concerns, meaning recent US policy sits somewhere in the lower left of Figure 2’s third quadrant.

Based on their theory, the authors argue that there are several reasons to believe this period of restrictive trade policy will pass. First, public opinion is likely to turn against trade restrictions. A March 2026 poll shows that the majority of voters (72%) believe the recent tariffs have resulted in a negative impact. Considering the increasingly large amount of backlash, the isolationist measures have garnered trade protectionism may not remain politically viable for long.

Diminishing corporate support for tariffs may also prevent the US from sustaining near-isolationist policies. Some industries like steel benefit from issue-specific tariffs but are punished by across-the-board policies because it makes their input prices higher. At the point where trade policy no longer serves these specific business interests, support for them is likely to dry up.

The final reason trade policy will likely loosen is that restrictive trade policy creates economic losers, who should mobilize to oppose these policies. Companies that are dependent on foreign intermediate goods suffer from intense tariff policies. Most commonly, these firms respond by lobbying policymakers and supporting campaigns that align with trade liberalization. With increasing resistance, economic losers form organized opposition groups and champion new officials that promote trade liberalization.

Given the expected decrease in public and corporate support for tariffs, and the historical precedent of less-than-liberal trade policy, authors Dür and Invernizzi predict that the United States will eventually walk back most of the current policies. The culmination of decreasing public opinion and sensitive business interests leads them to believe the trade policies will shift back to their eclectic middle ground. The global system has proven resilient in the past, surviving major economic storms before, including COVID, the 2008 global financial crisis, and the protectionist turns of the 1970s and 80s. Further, important players such as the European Union and China continue to adhere to the World Trade Organization’s rules and form their own strategic partnerships to keep trade open. These countries remain dedicated to liberal trade practices, effectively absorbing short-term disruptions in hopes that domestic political pressure in the United States will subside. Despite a sharp turn against free trade, Americans and their allies have reason to hope the US will return to free trade soon.

Can a nation which is authoritarian at home be liberal abroad? This question is at the heart of a long-standing debate between scholars on whether China is a challenger to the liberal international order (LIO), or an insider working to reshape the order according to its interests.1 While many agree that the LIO was created and is largely adhered to by the United States, along with close allies in Europe such as the United Kingdom and France,2 fewer agree on China’s place within it.

Many scholars insist that China’s domestic authoritarianism must be incompatible with international liberalism. They emphasize that because a liberal order enables the US to have influence over China, China will always seek to shift or destroy this kind of international order.3 Other scholars caution against the narrative of China as a rising challenger to the LIO. Instead, they emphasize that China prefers to adopt a pragmatic approach, one which has more to do with selective adherence to the LIO than overall opposition. They argue that China is therefore a nation which is not fully a part of, but not against, the LIO.4

The legal enforcement of the LIO manifests itself most clearly in the United Nations Security Council (UNSC). In the UNSC, nations show their adherence to or antagonism towards the LIO by voting for or against cooperative sanctions on nations which have violated the LIO.5 The UNSC is the most coercive legal instrument available for three of its permanent members: the US, the UK, and France (the P3) to enforce liberal values internationally, yet they must avoid a veto by Russia or China, the two other permanent members, to successfully impose these sanctions. Thus, the P3 must decide either to include China in enforcing the LIO, or to exclude and work around China.

Dr. Jack Zhang and I looked into China’s adherence to the LIO from 1972 to 2024 using UNSC voting data from the Corpus of Resolutions: UN Security Council (CR-UNSC) dataset6 and from the Department of Political and Peacebuilding Affairs Security Council Vetoes (DPPA-SCVETOES) dataset.7 To find how much China’s voting pattern of “yes” votes, “no” votes, or abstentions adhered to the LIO, we used CR-UNSC voting data over imposed sanctions and DPPA-SCVETOES voting data over threatened sanctions, to construct a percentage measure of vote similarity based on that of Magu and Mateos (2017).8 We measured China as adhering to the LIO when it voted in agreement with the US, the UK, or France over sanctions enforcing the LIO. During the period of study, theP3 usually voted for sanctions enforcing the LIO and voted against sanctions going against the LIO.

We found that in general, considering voting over all UNSC sanctions threatened and imposed for a multitude of reasons, China is highly similar to the P3 nations. China votes with the US, the UK, and France 86% of the time, 87% of the time, and 88% of the time, respectively, in support of these sanctions. China votes with Russia 93% of the time in supporting or opposing these sanctions, making it most similar to Russia and least similar to the US. However, the difference is small: only around 7 percentage points.

Somewhat more tension can be found between China and the P3 over sanctions enforcing the LIO. To analyze this in greater detail, we divided the LIO into two main non-economic suborders: the security order, concerned with maintaining national sovereignty while upholding international law, and the human rights order, concerned with maintaining human dignity as outlined in The Universal Declaration of Human Rights adopted by the UN General Assembly. China votes with the US, the UK, and France 83% of the time in support of sanctions enforcing the security order, and 82-83% of the time in support of sanctions enforcing the human rights order. Meanwhile, the P3 are more similar to each other than they are to China, with 99-100% similarity between any pair of the US, the UK, and France over the security order and human rights order. As such, the US, the UK, and France form a closer-knit group of internationally-liberal nations, but China is arguably internationally-liberal as well.

China is undoubtedly authoritarian at home, but abroad, at least within the UNSC, it does not work to undermine international liberalism. It supported the vast majority of UNSC sanctions supported by liberal nations like the US, the UK, and France to protect the international rule of law and the dignity of human persons. There is no reason to conclude that this agreement shows a deep appreciation by China for liberal values. Rather, that China is not as closely aligned with the P3 nations as they are with each other suggests that its international liberalism is pragmatic. China is a nation which the P3 can, and potentially must, work with to further their liberal foreign policies.

Of course, enforcing the liberal international order breaks down regardless of China’s position if the US, the UK, or France become antagonistic to international liberalism. Considering the latest foreign policy pivot of the US away from liberalism, this is by no means an uncertain prospect.

Over the past half century, the United States and China’s relationship has evolved extensively. Beginning with the normalization of relations under Nixon, U.S. policymakers pursued economic engagement with China, believing that integration into global markets would encourage cooperation, stability, and mutual prosperity. Over time, however, engagement produced deep economic entanglements that inflamed anti-Chinese sentiment. In recent years, rising geopolitical tensions have transformed these sentiments into a desire for economic decoupling. Evidence suggests growing distance between the two countries, if not complete independence. China’s share of total U.S. imports fell from 21.6 percent in 2017 to 13.3 percent by 2023.1 China’s share of U.S. exports and investment also declined during the same timeframe.2

Against this backdrop, Ayse Eldes, Jieun Lee, and Iain Osgood’s paper, Allied Import Options Available? Finding Friendly Trade Partners Amidst Decoupling from China, investigates the conditions under which firms reduce reliance on Chinese markets. The authors argue that the feasibility of decoupling depends heavily on market conditions—specifically, the availability of viable alternative suppliers in geopolitically aligned countries. They find that US imports from China in the post-Trade War era decreased among products with alternative suppliers in allied nations, but not those where alternatives were primarily located in hostile states. For products without friendly suppliers, firms were more likely to request exemptions from tariffs.

The authors suggest decoupling presents several major challenges. Firms face substantial costs when switching suppliers or relocating production. More fundamentally, viable alternative suppliers may not exist. For some products, China accounts for the overwhelming majority of supply. Even if there are other producers, political considerations complicate relocation decisions, as moving production from China to another non-allied state may replicate similar geopolitical risks rather than reduce them. These challenges, the authors argue, mean firms will only remove China from their supply chains if there are suppliers who can provide equivalent products in significantly less risky countries.

To test their theory, the authors analyze product-level U.S. import data during the initial years of the trade war (2018–2020) and extend their analysis through the early years of the Biden administration (2021–2023). Their findings show products with numerous alternative markets experienced import declines of roughly 29–34 percent on average following the trade war’s onset, with reductions exceeding 40 percent in the 2021–2023 period. In contrast, imports declined far less for products with limited alternative suppliers.

Crucially, these effects are driven almost entirely by the availability of allied or friendly alternative markets. When the number of allied suppliers doubles, imports from China fall by roughly 11–14 percent more than products with fewer allied suppliers in the early trade war period, and 15–20 percent more in the Biden era. By contrast, the presence of economically viable but non-allied suppliers has no statistically significant effect on import reductions. Firms appear reluctant to substitute China with another potential strategic competitor. Overall, the evidence demonstrates that firms are more likely to exit China when they have access to diverse and politically secure supply options. Where such alternatives are unavailable, firms remain tied to Chinese production networks despite policy pressure.

To complement their trade analysis, the authors examine an alternative firms have to shifting supply chains: requests for products to be exempt from tariffs. The findings mirror the trade results. Products with greater availability of alternative suppliers—especially in allied or friendly markets—received significantly fewer exclusion requests. Conversely, when alternative markets were limited, firms sought regulatory relief in order to maintain existing supply relationships. The magnitude of these effects is substantial, but, as with import adjustments, the presence of non-allied suppliers has little effect. Firms are more likely to resist trade restrictions when allied alternatives are unavailable.

The paper makes several important contributions to the broader literature on international political economy. First, it develops a political theory of decoupling that emphasizes both motive and capacity: rising policy and geopolitical risk creates incentives to exit, but firms can only do so when viable alternatives exist in geopolitically aligned markets. Second, the availability of alternative suppliers reduces firm opposition to trade restrictions, contributing to research showing limited political mobilization among firms during the U.S.–China trade war. More broadly, the findings inform ongoing debates about the feasibility of large-scale economic decoupling. The research suggests that meaningful supply chain restructuring requires not only policy incentives, but also the development of reliable alternative production relationships in politically secure markets.

Conventional wisdom suggests hawkishness on China is a rare point of bipartisan consensus in today’s hyperpolarized America. In an era of Congressional gridlock, bills such as the Hong Kong Autonomy Act, which sanctioned individuals contributing to China’s diminishment of Hong Kong’s autonomy, receive bipartisan support. Yet not all China-related bills are so uniformly endorsed. For example, the Stop China’s IP Theft Act in 2021 only gained support from Republican lawmakers, and the Taiwan International Solidarity Act was cosponsored by primarily Democratic lawmakers.

An article by Guan Wang (University of Maryland) and Weifang Xu (Emory University) attempts to explain this puzzle. Using an original dataset of China-related congressional bills, the authors demonstrate that bipartisan support for anti-China bills depends on whether or not they address domestic political issues, and whether they relate to issues one or both parties identify as important to their brand. When a measure disproportionately benefits one party, bipartisanship gives way to partisan competition, even when national security is threatened. Their findings complicate the traditional argument that external threats remedy partisan division. In today’s hyperpolarized climate, partisanship may compromise the ability to rally around the flag.

The researchers argue that legislation addressing an issue that directly affects American citizens, such as Chinese investment in the U.S., is less likely to be bipartisan, as political elites strategically leverage domestic policy debates to meet their desired political ends. In contrast, a bill condemning Chinese human rights violations is independent of domestic political competition in the United States, making support for this kind of legislation less contentious and more likely to be bipartisan.They found that when a bill is purely about international affairs, it has a 47% chance of being partisan, which they define as having co-sponsors from only one party. On the other hand, if a bill touches on domestic issues, the chance it is partisan reaches 62%.

In addition, the authors suggest that, among domestically oriented anti-China-bills, legislation regarding issues either party (or both parties) “own” is less likely to receive bipartisan support. If an issue is owned by a party, it is considered to betraditionally important to Republicans or Democrats. For example, voters tend to associate Republicans with issues like national defense and border security, while Democrats are associated with healthcare and environmental protection. When legislation targets China, but includes issues that one party “owns,” lawmakers treat it as a bargaining chip. For instance, a bill that advocates for China to enhance its environmental protection initiatives falls into the category of a Democratic bill because it focuses on an issue many Republican lawmakers may not support and is therefore likely to be partisan.

Partisan ownership over domestic issues only covers conventional partisan issues, so the authors explore the impact of nonpartisan issues on China bills. They find that with domestic China bills which neither party owns, like science and technology, the chance it will receive only Republican or only Democratic co-sponsors is approximately 58%.

Bipartisanship falters when there is potential for political ‘wins’ and ‘losses.’ Domestic issues tend to spur political competition. When bills are about divisive issues, like the economy or healthcare, the probability they will be partisan is high, sitting at around 70%. Wang and Xu show that, contrary to what common narratives suggest, China-related bills do not always generate a bipartisan approach. This complicates the theory that foreign threats will necessarily create a unified government, rather, policymakers may prioritize electoral competitiveness over coordinated action.

Last Thursday, the Supreme Court ruled in a 6-3 decision that President Trump is not authorized to issue tariffs under the Interntaional Emergency Economic Powers Act (IEEPA) statute. This ruling blocks many of Trump’s signature tariff policies, including his February 1^st tariffs on Canada and Mexico, and his April 2^nd invocation of IEEPA otherwise known as “Liberation Day.” The latter announcement unleashed a universal flat 10% tariff on all imported goods, and tacked on reciprocal tariff rates topping out at upwards of 50% on some countries such as China, Vietnam, and Cambodia.

The Supreme Court’s ruling has numerous repercussions. First, the ruling raises questions about how to handle the series of trade deals that were negotiated after Liberation Day and rely on the now null IEEPA authority. The highest profile of these deals involves the European Union, which in late August committed to cut or eliminate tariff rates on U.S. seafood, agriculture, and industrial material exports and agreed to purchase a combined $1.3 trillion worth of U.S. energy products, semiconductors, and defense platforms. Japan is another example, pledging a total of $550 billion towards U.S. exports, and cutting tariff rates across the board. These deals are vast for good reason, as they were done in an effort to soften the Liberation Day blow. However, SCOTUS’s ruling leaves firms on the edge of their seats as it is unclear if negotiations will reopen.

It may take time for the future of Trump’s 2025 trade deals to become clear. However, the decision does raise one immediate question for US companies: are they entitled to reimbursement for profits lost to illegal tariffs? While Customs and Border Protection havean outlined protocol regarding refunds, SCOTUS did not weigh in on the potential idea of refunding those affected by the IEEPA framework. In total, experts estimate that close to $150 billion in duties has been collected by the U.S. due to IEEPA alone. This graph from the Cato Institute visualizes the impact IEEPA has had on U.S. importers.

The economic burden of these tariffs largely fell on U.S. firms, with the New York Fed and U.S. Census Bureau calculating that by January-August, 94% of all tariff incidences fell on U.S. importers. If refunds are issued, the importer of record would receive the money. Although the importer of record paid the tariff, these firms are not necessarily those bearing the brunt of increased taxes because they can raise prices and thus pass costs down the supply chain. The National Bureau of Economic Research indicates as much as 20% of IEEPA tariff costs were passed through to buyers, meaning consumers felt much of the pain. Certainly, consumers and buyers cannot count on a drop in prices in the wake of this ruling. Even if refunds are issued, companies will be reluctant to change prices given uncertainty surrounding future trade policy.

Since the early 2010s, multinational corporations operating in China have faced mounting political risk. Notable episodes include anti-Japanese protests erupted in China after the 2012 Senkaku-Diaoyu territorial dispute, a standoff between Japan and China over control of contested islands in the East China Sea, posing a threat to Japanese business in the country. The U.S.-China trade war raised supply chain concerns, and COVID-19 lockdowns disrupted operations across the board. Governments have encouraged companies to reduce their reliance on the Chinese market. But have firms actually followed this advice, and if so, how?

Using Japan as a case study, a recent paper by Timothy Cichanowicz (University of Kansas), Jiakun Jack Zhang (University of Kansas), and Samantha A. Vortherms (University of California, Irvine) finds that 81 percent of Japanese multinationals, a group of companies long exposed to rhetoric and policy incentivizing independence from China, adopted at least one de-risking strategy between 2012 and 2022. However, outright exit from China remained rare. Instead, most firms pursued “diversification,” expanding operations elsewhere while staying put in China. The authors argue that national security concerns, rather than firm-level exposure to China, best explain which companies took the most decisive action.

The researchers introduce a typology to categorize firm responses to geopolitical risk. “Decoupling” means exiting China entirely. “Diversifying” means expanding investment outside China without reducing operations there. “Diverting” (or friend-shoring) involves both leaving China and reinvesting in allied countries. Firms that did none of these were classified as “business as usual.”

To determine what de-risking strategies companies employ, researchers tracked 100 Japanese firms with operations in China using registration data from China’s Ministry of Commerce and the Toyo Keizai Japanese Overseas Investment Yearbook. They observedsubsidiary openings and closures across multiple years spanning two periods of heightened political risk. First, the Senkaku-Diaoyu dispute (2012-2016) and, second, the trade war and pandemic era (2018-2022).

The results show that diversifying was the most common strategy, adopted by 43 percent of firms. Decoupling and friend-shoring each accounted for about 18-20 percent. Only 19 percent of firms did nothing. Among the firms that exited China and subsequently expanded elsewhere, nearly all reinvested in countries aligned with Japan—particularly the United States, Canada, Australia, and several ASEAN nations.

The paper’s most striking finding is that firms designated by the Japanese government as relevant to national security were significantly more likely to pursue all three de-risking strategies. This suggests that for firms in strategic sectors, the flag is clearly being followed, while for most Japanese companies, politics played a secondary role in investment decisions. The authors also did not find evidence that standard firm-level predictors like fixed asset investment in China, years of experience in the country, or dependence on Chinese operations predicted whether a firm chose to decouple, diversify, or friend-shore.

Some firms with particular vulnerabilities may be actively de-risking, but the findings suggest this is far from a general trend. In the case of Japan and China, most companies have hedged their bets by expanding operations elsewhere while maintaining their presence in the Chinese market, and China remains the largest destination for Japanese overseas investment. More broadly, the paper underscores how uneven and uncertain the relationship between political risk and corporate behavior really is, even after a decade of sustained pressure from governments hoping to reshape global supply chains.

In recent years industrial policies, meaning tariffs and subsidies that governments use to shape economic development, have emerged as the predominant tool for major economic powers. For example, China announced a 500-billion-yuan subsidy for their semiconductor industry in late 2025. The United States’ analogue to Chinese chip manufacturing promotion, the Chips and Science Act, likewise uses subsidies to incentivize semiconductor production. These policy initiatives are indicative ofa broader shift from free market to interventionist economic policies. Industrial policy now serves as the backbone of national security strategies, rather than a bulwark of development policies.

A paper by University of Cambridge researchers Jostein Hauge, Bruno Houtzager, and Alessandro Julian Hörmann describes the recent national policy approach as neomercantilism, or the belief that national security depends on independent domestic production, especially in critical sectors such as semiconductors.1 This theory posits that governments should use economic tools such as tariffs, subsidies, or quotas to compete on the global stage. In their paper, the authors primarily analyze how the United States, China, and the European Union employ industrial policies to secure resilient supply chains and technological superiority. Although economic interventions aim to promote domestic interests, the authors found that this may limit opportunities for many poorer countries to enter security-related markets, apart from some “connector” countries, such as Vietnam or Mexico. Rather than being cut out of securitized markets, these countries benefit from the larger international rivalry by serving as a liaison between the superpowers.

The authors argue that the pivot away from unfettered international trade stems from a culmination of factors exposing the fragility of global security and revealing the risks of interconnectedness in global production. The article notes a series of shocks spurred the shift towards increasing domestic production: the 2008 Global Financial Crisis and the subsequent decline in the popularity of neoliberal orthodoxy, deindustrialization leading to lob losses in high-income countries, climate change, COVID-19 supply chain vulnerabilities, and geopolitical tensions coupled with economic nationalism. Moreover, the invasion of Ukraine demonstrated that economic integration does not necessarily produce political stability and can instead be weaponized. Most notably, when Russia leveraged its natural gas exports to Europe as a geopolitical tool, it inspired efforts to rethink supply-chain resilience in energy markets.

To support their arguments about neomercantilism, the researchers examined the growth in manufacturing output. The total manufacturing output of China, United States, and the EU made up approximately 61% of the total global manufacturing output in 2000, but in 2024, they made up 69%. This overall growth in the amount of concentration in manufacturing suggests that major powers have strengthened their economic dominance. This development crowds out other countries, preventing them from participating in global manufacturing output.

Shifting from a macro-analysis, the researchers also evaluate each superpower’s industrial policies individually. Although U.S. share of global manufacturing output has decreased in recent years, the authors still describe the national strategy as “hawkish.” Washington has utilized its economic toolbox to slow down Chinese production and engage in competition over economic dominance. Example of the United States’ policies include the extensive import and export controls and domestic subsidies in strategic sectors (like semiconductors and emerging technology). This “America First” approach is designed to facilitate the United States’ industrial capacity.

China has contributed the new wave of economic nationalism through its long-term persistence in industrial development. Policies such as the Made in China initiative, which supports key industries through subsidies and state-sponsored programs, grows China’s economic dominance. China has shifted from a labor-intensive and export-oriented economy to an innovation-led model. One notable policy that exemplifies their shift is China’s Fifteenth Five-Year Plan, an outline of China’s goals to rely on its own economy, enhance manufacturing, drive internal market growth, strengthen financial development, increase military capabilities, and boost long-term planning.2 These policies have increased China’s global manufacturing output byapproximately 25%.

The European Union has experienced increased competition internationally, with their global share of manufacturing decreasing from 30% to 22%. Instead of opting to restrict trade with China, they have taken a more cautious approach, maintainedtrade openness while also developed domestically. In 2024, EU-China trade has grown to approximately €213 billion, unlike other countries that have seen a significant decrease.3 Simultaneously, they have strengthened industrial policies, like the European Chips Act, an initiative to strengthen the semiconductor markets in the EU.

The authors conclude that national security and industrial policy have converged in recent years, transforming the global political economy. With China on a technological rise, powerful countries are competing for dominance in strategic industries. The increasing concentration of manufacturing power within China, the U.S., and the E.U. raises concerns about the ability for other nations to thrive economically, especially countries in the Global South. Returning to historical patterns, a modern paradigm of economic policy as national security has emerged.

China’s sanctioning practices have been an area of scholarly interest for some time but have taken on greater salience since a series of important policy changes. Following the pivotal creation of the Provisions on the Unreliable Entity List in 2020, the Ministry of Commerce of the People’s Republic of China introduced the Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation.1 Also in 2021, China enacted the Anti-Foreign Sanctions Law.2 These policies increased China’s capacity for formal economic coercion.3 Meanwhile, the country’s notorious usage of informal sanctions — sanctions not publicly acknowledged or legally recognized — has drawn the ire of foreign governments and businesses for decades. For example, after the 2021 opening of a Taiwanese (as opposed to Taipei) labeled representative office in Vilnius, Lithuania, a Chinese state-owned rail company indefinitely delayed Lithuanian goods without making any formal announcement explaining the decision.4

In Jiaying Xing’s 2025 paper on the subject, she investigates the conditions under which China opts for formal versus informal sanctions. Xing compares 67 cases where China utilized sanctions from January 2019 to December 2024. Her effort to understand the PRC’s decision-making process centers on four variables, two domestic and two external. The domestic factors are the political significance of the issue and the political cycle, defined by proximity to major events in the political calendar, such as elections. The external factors are China’s economic dependency on the target state and the perceived political backlash of sanctions.

Xing’s comparative analysis identifies issue significance as the necessary condition for determining China’s use of formal sanctions. Formal sanctions consistently appear when disputes involve politically sensitive and non-negotiable core interests, and they do not occur in cases where such issue significance is absent. All formal sanctions in the dataset are linked to challenges involving foreign interference in China’s internal affairs or threats to its sovereignty and territorial integrity, particularly with respect to Hong Kong, Xinjiang, and Taiwan.

At the same time, issue significance alone does not automatically result in formal sanctions. Economic dependency and geopolitical backlash emerge as critical influencing factors. Contrary to expectations that higher economic or strategic risks would discourage formal sanctions, the findings show that China is more likely to impose formal sanctions against large countries with which they are highly economically integrated. The most prevalent pathway to formal sanctions combines issue significance with high economic dependency and high geopolitical backlash. This counterintuitive finding is clarified by Xing’s examination of sanction intensity. Formal sanctions are typically very targeted but limited in severity, allowing China to signal strong resolve without incurring exuberant costs. Conversely, Beijing often employs informal sanctions against weaker countries, on which it can afford to impose higher costs.

Existing scholarship explains China’s sanctions behavior primarily through a rationalist cost–benefit framework, emphasizing tools such as informal consumer boycotts, plausible deniability, avoidance of legal and WTO challenges, and strategic signaling of resolve.5 Building on this work, Xing’s study shows how multiple interacting domestic and international conditions shape China’s choice between formal and informal sanctions.

Xing’s results show that China’s sanctions behavior reflects the formulation of a two-tiered sanctions strategy rather than a shift away from informal coercion. Formal sanctions are consistently associated with disputes involving China’s core interests, but their use is further shaped by China’s relationship with the target. Informal sanctions, by contrast, remain central when Beijing seeks to impose more substantial economic costs, particularly against smaller or less powerful actors. Overall, China’s two-tiered sanctions policy reflects a deliberate balancing strategy that integrates risk management and political necessity. This framework provides a clearer understanding of China’s evolving use of economic statecraft on the global stage.