The Nine Lives of Economic Nationalism – Part Three

Part one of this series discussed the roots of modern economic nationalism in anti-imperialism, then went on to consider how US-Chinese economic nationalism has scrambled established ideas about both empire and economics. Part two examined two cases in Africa: the first involved two formerly colonized countries (India and China) competing for dominance of resource extraction in other formerly colonized countries; the second focused on the successful import-substitution (oil refining, cement, fertilizer) companies of Nigeria’s Aliko Dongate and his new, $2.5 billion fertilizer-production deal with Ethiopia. In both posts, the through-line was the defense of national economic sovereignty in a world deeply interconnected through trade.

The third post in the series looks at the blowback created by US-China economic nationalism.

The first case of blowback must surely be the US reaction to Made in China 2025 itself. The original Chinese program was a sovereignty play. China did not want its economic future (green energy, smart manufacturing, biotech, etc.) to be dominated by US companies with massive first-mover and other advantages. Made in China 2025 was a project aimed at economic self-determination. It did not cause much concern at first in the US: President Barack Obama met China’s President Xi Jinping for positive talks in 2016, after the project had been launched, and visited him again in Beijing in 2017 after leaving office. But Trump’s signature economic nationalism, once he settled into the White House in 2017, gradually fastened onto Made in China 2025 as a legitimizing opponent. Much of corporate America and the Democratic Party went along with this, for reasons of their own. The economic nationalism of a still relatively poor country — Chinese GDP per capita in 2015 was less than a third of what it would be in 2025 — begat the economic nationalism of the dominant economy in the world.

The US elaboration of economic nationalism in reaction to, and often in imitation of, Chinese economic nationalism inspired similar reactions elsewhere, most notably in the world’s most populous nation, India. In May 2020, while Trump was still in office, Prime Minister Narendra Modi launched a Made in India campaign. He made free use of a term, swadeshi, deeply resonant of the anti-imperial movement a century before. It was probably Modi’s move, combined with the breakout of border conflict with China (also May 2020) and the ensuing expulsion of Chinese tech companies from the Indian networks they mostly built, that led China to reframe Made in China 2025 in a longer history of anti-imperialism and attempt to rival India as a leader of the Global South.

The die was cast. An economic nationalism, including import substitution and “food sovereignty,” that had seemingly left the world stage in the early 1970s was back, led by the two dominant economies in the world and its most populous nation.

At the same time, the US, China and India all knew that actual isolation from the global economy was impossible in any imaginable near term. Modi’s atmanirbhar (“self-reliance”) coincided with much closer relations with the US and US companies, for example, including military and tech cooperation, right up to Trump’s sudden and wrenching disenchantment with India in August of this year. US economic nationalism was also not just about autonomy in North America. It involved, for example, throttling Chinese export industries and doing whatever was necessary for “locking in dollar supremacy,” in Treasury Secretary Scott Bessent’s words, to preserve “extraterritorial power.” Similarly, Chinese self-reliance (zili gongsheng) developed alongside a lengthening list of quite internationalist projects, from the Belt and Road Initiative to promoting the Shanghai Cooperation Organization as a pseudo-NATO. Each of these large economic powers preached economic nationalism but also practiced internationalisms of various kinds and showed no actual desire to stay contentedly within its borders tending its own gardens.

Yet if major-economy economic nationalism in practice had a strong internationalist cast, it was nonetheless nationalistic in terms of the barriers erected against foreign participation in domestic economies. It was also exceedingly transactional, before Trump’s re-election and all the more so after. Friendly meetings at the beginning of September of this year among Modi, Putin, and Xi were often spun — not least by China — as evidence of an emerging international unity when faced with US trade and security policies. But there were no principles involved beyond sovereignty itself, and each of these actors, as well as Trump, has shown himself able to switch sides at will, and to switch back again.

So the sensible conclusion for countries in the rest of the world is to avoid alignment with any of these changeable states and to pursue their own self-sufficiency (“economic sovereignty”) — because you really never do know any more when your foreign supply chains will be reshaped by political policies over which you have no influence.

Economic nationalism fosters more economic nationalism. The unpredictability created by economic nationalism among major players — including the European Union with its quest for “autonomy” and resistance to becoming a US tech “colony” — has come to outweigh the profound efficiency costs. Better to slog through building your own fertilizer or cement industry or AI “stack” than give up what autonomy you have to politicized global markets.

The fourth and final post in this series will consider the future of economic nationalism.

The Nine Lives of Economic Nationalism – Part Two

Part one of this post discussed the roots of modern economic nationalism in anti-imperialism, then went on to consider how US and Chinese policies of economic nationalism over the past decade have scrambled established ideas about both empire and economics. The US-China model of economic nationalism, combining a desire for economic autonomy within the state’s borders and one for the projection of economic power outside them, has been embraced by powers both formerly imperial and formerly colonized. It is an episode in a very long history.

Two recent developments exemplify this. The first has to do with Indian-Chinese competition and Africa. India (and others ) now aims at securing African resources to compete with, and avoid dependence on, China. Writing in The Hindu, Samir Bhattacharya of the Observer Research Foundation argued, “African nations are growingly asserting their rights to value-added development. The old model of raw resource extraction in exchange for infrastructure or investments is no longer tenable in a region demanding agency, accountability, and economic sovereignty. … By challenging opaque contracts, enforcing environmental standards, and demanding value addition, they are redrawing the terms of engagement. If these trends continue, African countries are poised to reshape the global supply chain for minerals and their role within it, moving from exporters of raw materials to integral partners in the emerging green economy. This change would come at the expense of China’s long-standing dominance in the African mining sector.”

Bhattacharya neglected to mention that competing with China to secure African raw materials for Indian industries, with the goal of ending Chinese dominance of African mining, is Indian policy. And that policy is not solely motivated by a wish to help African nations achieve greater “agency” and economic sovereignty. Nurturing the economic sovereignty of Ghana or the Democratic Republic of Congo is not in itself a leading goal for Indian policy. Nonetheless, the language is important because it marks the enduring significance of anti-imperial politics when negotiating contracts with African states — and because it shows two former very large colonized nations competing to show which is less imperial in its motivations than the other. They would not be bothering to do that if it didn’t promise to improve business.

A century and a half ago, empires themselves competed in roughly this way, each claiming to be more liberal than its competitors — or, in the case of the Japanese empire circa 1910, claiming to be the champion of other non-white peoples, or at least Asian peoples, in rallying “the yellow races against the white as a common enemy,” as a Japanese professor put it in 1918. China and India in Africa today are marketing themselves in ways that stretch back to the late 19th century.

Of course, from an economic-nationalism perspective, on the ground in Lagos or Kinshasa, the key point is not to find more comrades for a united anti-imperialist front but to secure investment that can bring local production out of the raw-materials trap and advance it up the value chain. Just as Americans on both continents in 1800 did not want London, Lisbon or Madrid to keep them forever digging in the mines, felling the forests or laboring on export-oriented farms, the inhabitants of less-developed countries today do not want only to produce petroleum or cocoa or strategic minerals for refinement elsewhere. But actual transfers of intellectual capital, such as production methods, are not simple or easy. They often require a great deal of “agency” from local actors. Such actors will not always be loyal followers of mainstream economic theory.

A remarkable recent example is the deal struck at the end of August between Dangote Group, of Nigeria, and the government of Ethiopia. The story of Aliko Dangote, sometimes called the richest black man in the world, is well known, but in brief: Born in 1957 to a wealthy business family, Dangote was educated in a madrasa and public schools, then at Cairo’s celebrated Al-Azhar University. He began importing cement to Nigeria in the 1970s but his biggest business was in sugar refining. He formed the idea that he would lead in freeing Nigeria, and perhaps Africa, from dependence on imported refined materials — the classic post-imperial goal. When a friend became president of Nigeria, Dangote seized the moment. He acquired formerly state-owned cement plants and established a highly successful cement business, expanding to production elsewhere in Africa. His efforts were self-consciously mocking, in a gentle way, the Smithian economic doctrine that there was no point in Nigeria developing its own cement industry because it could import cement from countries that already excelled at cement production. Such “import substitution,” popular in the 1960s, had become deeply out of international favor. Dangote did it anyway and was hugely successful. By 2024 Nigeria was a net exporter of cement.

Petroleum is the biggest industry in Nigeria, but it has long been mainly a matter of exporting raw materials for refinement elsewhere. Dangote became a major player in oil refining, such that in 2024 Nigeria was a net exporter of petroleum products for the first time in decades. His other major sector has been fertilizer, which uses natural gas as its main input. Nigeria has immense natural-gas deposits. The $2.5 billion deal with Ethiopia last month involves Dangote (with a 60% share) developing Ethiopia’s fertilizer capacity using Ethiopian natural gas.

On X, Ethiopia’s prime minister, Abiy Ahmed, framed the deal as one ensuring “food sovereignty” and “food security.” Ethiopia currently enjoys neither, and the Trump administration’s cuts in food aid — Ethiopia had been the single largest recipient — made matters worse.

“Food sovereignty” has been a recurring issue in both US and, especially, Chinese economic nationalism. Now that their rivalry has so disrupted international markets, the reliability of food imports has gone down for everyone. The same is true of strategic-minerals imports, now such an important focus of Indian Africa policy. Indeed, one could say that US-China economic nationalism has created a world of economic nationalisms. The repudiated “import substitution” of yesteryear has returned, not from preference (or ideology) but from a necessity created principally, if unintentionally, by the policy decisions of the world’s two largest economies. One nearly certain result will be increased production outside of the US and China that will provide new competition to those dominant countries.

The next post in this series will look at how economic nationalism came to dominate the international scene.

The Nine Lives of Economic Nationalism – Part One of Four

To say that economists think poorly of US President Donald Trump’s economic policies is to understate matters. Most see him as an unhappy combination of a 19th-hole savant and that student — there is one in every classroom — who insists on the rationality and inevitability of socialism. President Trump differs from the student in that his own guiding star is economic nationalism rather than socialism.

But, as many have pointed out since the administration decided to take a 10 percent stake in Intel and cull 15 percent of Nvidia’s and AMD’s China revenues, economic nationalism and socialism are not so far apart. Each leans toward state self-sufficiency and tends to involve state control of the means of production. Both involve the state imposing its priorities on the market. Economists since Adam Smith in The Wealth of Nations (1776) have seen such state control as less efficient than market allocation of resources. Thus, in part, economists’ anxieties about Trump policy. 

This four-part series will look at how economic nationalism has persisted despite its theoretical irrationality. The question is significant for investors because investments are often based on assumptions about economic maximization in free markets. Economic nationalism confounds such assumptions and complicates investment. It might also make the global economy’s “weaponized interdependence,” in Henry Farrell and Abraham Newman’s phrase, exceptionally dangerous. This series tries to assess that threat.

Adam Smith argued that, whether inside a state or between states, producers should specialize in what they already do best. Trade would then ensure that the best products at the lowest prices would reach customers and the overall economy would produce the most and best for least. Restraining trade would by definition reduce efficiency.

That was a leading reason why Smith and most economists after him were anti-imperialist. To take over territory, people and resources and bend them to making things the imperial center wanted, rather than what they might do best, ran contrary to market economics. The American revolutions, from Buenos Aires to Haiti to Boston, were led by people who wanted to take control of production away from empires. Settler colonialism was, in this sense, a school for radicalism.

It was also, of course, a school for economic nationalism. Newly ex-colonial states like the US appreciated that their former masters had a head start in developing the most productive technologies and business methods. The point of anti-imperial revolution circa 1800 was not simply to exchange formal domination for informal subordination by superior economies. Economic nationalism was animated by the desire for sovereignty: the business of states, so to speak, rather than of businesses. Restraints on trade, in the service of economic nationalism, always operated alongside their opposite, namely free trade. This was true in the 18th century as it is today. It was a feature, not a bug, of modernity.

The first Trump administration, running contrary to modern economic theory, embraced such an economic nationalism and the restraints on trade designed to advance it. The proximate cause was China and its set of policies gathered under the name of Made in China 2025 (launched in 2015). If the state-controlled 18 percent of humanity known as China was going to structure its economy to further its own economic nationalism, then the US was going to do the same. Tellingly, in arriving at Made in China 2025, Chinese economic thought took the anti-imperial US economy of the late 19th century as one model in combining restraints on trade with a conditional embrace of free-market forces, both aimed at the political goal of economic sovereignty and the historical goal of catching up to the modern world’s first movers, which were primarily empires. (Industrializing, imperial Japan circa 1890, one of whose aims was unfortunately supremacy over imperial China, was a similar and powerful model, especially for non-Europeans.)

As Trump’s and then Joe Biden’s economic policies developed, it became clear that China and the US were jointly reconfiguring the global economy to advance their respective economic nationalisms. What neither the US nor China seems to have anticipated was that this dynamic would solidify among other large economies as well, from the European Union to India, to create the global economy we have now, raising up sovereignty and self-sufficiency at the sacrifice of overall economic efficiency. Such an economy is inherently conflictual as well as inefficient. Indeed Adam Smith’s economics was an important inspiration for 19th-century peace movements: a reduction in economic sovereignty was thought to create an interdependence and frequency of cross-border exchange that would tend to reduce interstate conflict. Smith would have seen today’s worldwide rise in military spending and investment as a dead weight on the economy. He would have seen today’s goal of economic self-sufficiency as hopeless and misguided. But the relationship between economic nationalism and economics is complicated. Businesses of many different kinds now find they have to negotiate both simultaneously.

The next post will look at two recent examples of how complicated, and unexpected, such negotiations can be.

What Is “Human” Intelligence?

By Dee Smith

The most common, and probably most important, type of intelligence is known as OSINT (Open Source Intelligence). It involves collecting information in the public domain and in “gray” sources that can be exploited legally but might not have been intended, by the originators of the information, for public access: subscriber-only databases with address and legal-action histories, for example; alumni websites; social media accounts; PDFs on personal websites; websites like Glass Door or RateMyProfessor; conference schedules, or materials on the dark web.

OSINT has always been important. Probably the single most significant intelligence-collection activity in World War I was acquiring, reading, and analyzing newspapers in enemy and neutral countries. After World War II, the new CIA took over the Foreign Broadcast Information Service (FBIS, pronounced “fibbis”), offering invaluable digests of radio and eventually television broadcasts around the world. The Internet transformed the OSINT world: CIA folded FBIS into a new Open Source Center in 2005, recognizing that the channels for OSINT were proliferating. OSINT has become more crucial than ever for both private intelligence agencies like SIG and for government intelligence services. It requires skill and knowledge to find and filter the most important data — “Googling” is only a start — and then know how to put the pieces together to reveal hidden patterns and indicators, the things people do not expect you to know or want you to know.

There are many other types of intelligence collection: IMINT (Imagery Intelligence), which includes airborne and space-borne imagery; ELINT (Electronic Intelligence): SIGINT (Signals Intelligence), including interception of electronic signals during transmissions; and MASINT (Measurement and Signature Intelligence), which analyzes “signatures,” such as the thermal signatures of particular weapons, or the distinctive electronic signals sent by particular technologies. At SIG, we employ any of these techniques that are needed for a specific project that can be legally deployed. SIGINT, for example, is generally not legally permitted in the private sector.

There is one important collection method I have left out, which is HUMINT, or Human Intelligence. Essentially, this means collecting information from people. Sometimes it is also called active intelligence, because it often involves interacting with people, as opposed to passive methods like OSINT or IMINT. Broadly speaking, HUMINT is another way to discover the information environment around a subject and also what is sometimes called their “pattern of life”. It is most useful in combination with OSINT and other intelligence techniques.

HUMINT practices range from discussions, interviews, and interrogations (not necessarily what that word implies in the Hollywood sense, but structured questioning of subjects of investigation using specific methods and techniques), to clandestine elicitation and observation. The latter includes everything from “secret shoppers” to private-eye-type surveillance on the ground to what is sometimes called “cloaked elicitation” — such as discovering and calling “off-sheet” references for a potential employee (that is, finding people they have worked with whom they did not volunteer as references). Surveillance intersects with HUMINT, ELINT, and other means, and is sometimes considered a separate technique, although many people categorically include it under HUMINT, as do I.

HUMINT is the oldest intelligence practice. It is becoming more important, but also more difficult. The reason it is becoming more important is that electronic information is becoming more and more sequestered — for reasons of privacy, security, and state concern for “data sovereignty” — and less and less dependable, due to data pollution.

The reader may wonder why such invasive techniques as HUMINT are used in private business contexts. The primary reason is to avoid costly or otherwise damaging mistakes. A pension plan, for example — investing, say, $100 million of other pensioners’ money into an operating company or fund — wants to know if the principals of that prospective investment have histories of deceptive business dealings, bankruptcies, litigation, or other negative indicators, as well as to understand their general operating characteristics (how they do business). HUMINT is one tool that can provide intelligence on these questions that cannot be obtained in any other way.

There are debates in the industry about what is and is not permissible, even if it is legal. For example, opinion and practice regarding intelligence on competitors can be divided into two camps: “competitive intelligence” and “competitor intelligence”. The latter uses any legal techniques to obtain information. The former places ethical guidelines around certain practices. Imagine that you happen to be sitting on a plane next to someone who works for a direct competitor. If you ask probing questions about their work without disclosing that you are working for one of their competitors, that would not be allowed under the generally accepted rules of competitive intelligence. However, those rules would generally allow some such questions, if you had disclosed your association before asking the questions.

The most confusing challenge is that laws, regulations, and policies and best practices surrounding intelligence vary widely from place to place and are constantly changing. A well-run private intelligence agency has to have one or more employees dedicated primarily to keeping up with these changes as well as other security and best-practices-related matters. Government intelligence operations, as arms of a sovereign state, are typically not so constrained, although in democratic societies there is usually legislative oversight.

HUMINT also includes espionage techniques, for example cultivating contacts (“assets” or confidential informants). These are individuals who knowingly provide information of various kinds for various reasons, including payment, personal beliefs and allegiances, blackmail, and coercion. They have inspired numberless fanciful novels and movies, but  have played important roles throughout history.

Such clandestine operations are becoming much more difficult, however, because of electronic surveillance and tracking. Recruiting and protecting assets is increasingly difficult to do. They have very limited roles in private intelligence, primarily in fraud investigations and when doing fraud prevention through deep dives on the reputations and practices of individuals and companies.

But however challenging HUMINT collection is, increased state control of data, among other factors, is fragmenting and siloing the OSINT data array, leaving HUMINT to rise once again in importance.

The US and Internationalism

A deadline has come and quietly gone for the US State Department’s mandated review of American overseas commitments. Presumably a report will be forthcoming soon. SIG’s view is that the report will be mild in substance, for two main reasons: the political force of the Trump administration’s January attack on the “globalist” agenda within the US government and in multilateral organizations has reached a limit; and the lack of pushback against that attack (by allies and foreign partners, the Democratic Party, or the American people) has revealed the lack of any effective pro-globalist or even internationalist lobby. 

Within days of taking office, the Trump administration issued several executive orders withdrawing from certain international bodies (the World Health Organization, Unesco, the UN Office of the High Commissioner for Human Rights) and putting the whole of US commitments to international organizations under review with a report from State due Aug. 4. Some of this was less dramatic than it sounded. Withdrawing from the WHO is a year-long process and funding remains through the end of the fiscal year (Sept. 30). President Trump in his first term also withdrew from the WHO but the clock ran out before it happened and President Biden reversed the order. Unesco withdrawal would not be effective until July 2026. But the White House’s intentions are crystal clear and were reflected in its fiscal-year 2026 proposal to Congress, submitted at the end of May. This is the “National Security, Department of State, and Related Programs” bill, known as the NSRP. The House Appropriations Committee’s markup of it in mid-July was consistent with the president’s priorities and reduced the previous year’s total spend by 22%.

De-funding of international organizations was consistent with the de-funding of the State Department and the elimination of the US Agency for International Development. The handling of the World Trade Organization is interestingly different. President Trump in his first term wanted to withdraw from the WTO as he believed it unfairly favored China. He embraced and escalated the Obama administration’s blocking of appointments to the WTO’s appellate body. (The Biden administration also did nothing to get the appellate-body issue out of deadlock.) But the EU initiated a workaround, the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), which effectively could do the work of the old appellate body. By June 2025, when Britain joined, the MPIA included 57 WTO members (out of 166) covering 57.6% of world trade. All of the US’s traditional allies are in the MPIA, including Canada and Mexico, as is China. The most important countries staying outside the MPIA are the US, with about 15% of world trade, and, as a political actor, India. (India has long taken a special interest in global trade negotiations.) The WTO provides a valuable measure of stability and rule of law to international trade. The success of the MPIA in attracting most of the world’s biggest national economies is striking, as it is a very curious and jerry-rigged body.

The second Trump administration, rather than attacking the WTO, has sent one of its leading economic advisors, Jennifer Nordquist, to serve as one of four deputy directors-general. (She has been a counselor to the White House Council of Economic Advisors and was Trump’s appointee in his first administration as US executive director at the World Bank.) Trump has also nominated Joseph Barloon, general counsel for the US Trade Representative in his first administration and a former law partner at Skadden, Arps, as ambassador to the WTO in Geneva. In his confirmation testimony to the Senate, Barloon stressed the importance of not accepting large non-market economies, by which he means China, as equal players at the WTO.

President Trump’s tariff policies have been advanced in both his administrations without much reference to WTO rules and practices. They go against the basic idea of the WTO and before it the General Agreement on Tariffs and Trade (GATT), which began chipping away at tariff barriers in 1947. Nonetheless the WTO, as seen in the strange career of the WPIA, does have a purpose in the estimation of most of the world’s industrialized economies. IT also has a place in the struggle between the US and China. And it cannot be accused of wokeness (as was the case in White House criticism of USAID), “ideological” manipulation of science (WHO), or enmity toward Israel (as is the case with the UN Human Rights Council and other UN bodies facing defunding). Of course in one sense the WTO can certainly be described as “globalist” — theorists of neoliberal globalization often root it in economic policy more than politics — but it is not, in the Trump perspective, ideologically or culturally globalist. It is not part of the America First global culture war. And it serves a purpose for US corporations as well as for every other nation’s corporations.

The WTO (along with the International Telecommunications Union and some others) may simply be the exception that proves the rule: the US is nonetheless withdrawing from and de-funding previous long-term commitments to the institutions of multilateral diplomacy and international governance. But the leisurely pace of State’s mandated review, the compliance of the House Appropriations Committee, the uninterest of Democratic leaders, and the almost complete lack of any public or media attention to this US withdrawal suggest that the administration’s anti-globalist fervor has weakened. It might return in the fall for the UN General Assembly, an occasion Trump has used before to attack globalization and defend economic nationalism. But he might also take the moment to declare victory and seize some credit for the reform and whittling down of the UN, which has been going on for many years now but quickened after January. Either way, the anti-internationalist momentum is likely to wane after UNGA closes shop in October. On the US political scene, it is an issue that no one is motivated to fight over. This will leave the next moves in multilateral diplomacy and governance up to other actors.