Analysts from the Foundation for Defense of Democracies and the European University Institute are recommending that the U.S. State Department establish annual Economic Security Intelligence Reports to track global trade risks. The proposal suggests using U.S. diplomatic missions to map the economic vulnerabilities and strategic reliability of trading partners. This recommendation follows recent export restrictions by China on heavy rare earth elements, which are essential for manufacturing batteries and other industrial inputs.
The proposal comes as China currently produces 98 percent of the world’s eight heavy rare earth elements. The International Energy Agency (IEA), an intergovernmental organization that provides energy analysis, reported in July 2026 that full implementation of China’s rare earth export controls could impact $6.5 trillion in global downstream production. This figure represents approximately 7 percent of global Gross Domestic Product (GDP) when excluding China.
Advocates for the new reporting system, Josh Birenbaum and Antonia-Laura Pup, state that such intelligence is necessary because state-driven economies do not follow market-oriented rules. They noted that China has established market dominance in processed cobalt, copper, and lithium through state interventions, including subsidies and price manipulation. The proposed reports would evaluate whether partners possess the legal authority and political will to enforce U.S. sanctions, export controls, and anti-money-laundering laws.
The scale of the economic shift is reflected in projections that China is on pace to account for 45 percent of global industrial production by 2030. If the State Department adopts this framework, U.S. businesses would notice a shift in trade policy toward a "Near-Global Economy," which prioritizes integration with market-oriented allies over state-driven competitors. This would likely result in stricter enforcement of rules of origin and increased scrutiny of "pass-through" capital from adversaries disguised as domestic investment.
The knock-on effects would reach into the U.S. domestic legal system, as the proposal calls for the U.S. to apply these standards to itself by eliminating anonymous shell companies and opaque legal structures that could be used to bypass sanctions. This policy would set a precedent for treating economic data as a formal branch of national security intelligence, similar to military assessments. While Secretary of State Marco Rubio has already moved to place economic statecraft at the center of the department's mission, there is no set date for the formal adoption of these specific intelligence reports. Currently, the U.S. is responding through the Trump administration’s recent efforts to rebuild domestic mining and processing capacity.