International Economics

Matthew P. Goodman, Director of the Greenberg Center for Geoeconomic Studies and Director of the RealEcon Initiative at the Council on Foreign Relations, testified on May 14, 2025, before the House Foreign Affairs Subcommittee on East Asia and the Pacific. The subject of the hearing was "National Economic Security, Advancing U.S. Interests Abroad." Other witnesses included Elaine Dezinski of the Foundation for Defense of Democracies, William Norris of Texas A&M University, and Wendy Cutler of the Asia Society Policy Institute. In his testimony, Goodman argued that at a tumultuous time, the United States has an enduring interest in engaging affirmatively in the global economy. Economically, the United States need fair and resilient trade and investment to tap into the three-quarters of the global economy and 95 percent of consumers located outside the United States. Strategically, U.S. allies and partners want the United States to complement its military presence around the world with economic engagement. And the United States has a "strategic economic" interest in championing U.S.-preferred rules, standards, and norms in the global economy, at a time when others are seeking to champion theirs. Against this backdrop, Goodman said, the United States needs smart economic statecraft—using its economic power to advance its strategic and foreign policy interests, and using diplomacy to advance its economic interests. Smart economic statecraft is both balanced—between defensive and offensive efforts, between costs and benefits, and between international and domestic policies—and leveraged, crowding in both the private sector and allies and partners to supplement U.S. capabilities. Goodman argued that carrying out smart economic statecraft requires a State Department that has the appropriate mandate, culture, and resources. The State Department's comparative advantage among U.S. government agencies is its reach: its presence in 175 countries around the world and ability to operate across government and society in those countries. The "E line"—where the departments economic bureaus are housed—works both to promote and protect U.S. international economic interests and needs leadership and resources to contribute effectively to smart, U.S. government-wide economic statecraft.