Abstract: Despite the long existing literature Liberal scholars have offered on the relationship between economic interdependence and security, recent trends in U.S. foreign policy has emphasized the need for American economic independence. Although there are certain vulnerabilities that have emerged from extreme dependence on China for materials needed for weapon production, the role of interdependence as an inhibitor of peace should not be completely disregarded.
In the 2025 National Security Strategy report, it declared that, “Going forward, we will rebalance America’s economic relationship with China, prioritizing reciprocity and fairness to restore American economic independence.”1 In recent years, many have begun to fear that interdependence has created dependence, and thus weakness. Liberalist international relations theory has traditionally posited that interdependence offers a medium for peace. Even so, recent developments have raised doubts about the underlying assumptions behind the theory of economic interdependence, as advocated for in the U.S. National Security Strategy. Rather than pursuing complete economic independence, the U.S should strategically manage interdependence by diversifying critical supply chains and decreasing asymmetric interdependence that could be exploited.
Popular liberalist international relations theory hinges on the idea that trade and conflict have a negative relationship. Consequently, “trading countries with significant trade relations would thus engage in less conflict, because they are most threatened by welfare losses associated with lost trade.”2 However, more recent literature has questioned this relationship, and argued that the relationship between trade and conflict is much more complex than simply being an inverse relationship. Farrell, for example, argues that “asymmetric network structures create the potential for “weaponized interdependence,” in which some states are able to leverage interdependent relations to coerce others.”3 In other words, interdependence alone is not the solution for peace, but interdependence must be deliberately and strategically managed.
Asymmetric interdependence has been a key source of worry for the U.S. Different assessments have been conducted to determine just how dependent the U.S. is on other countries. Specifically, the Government Accountability Office in a 2024 report found that “critical materials—like rare earths, tantalum, and tungsten—are materials needed to supply U.S. military…Most of these materials are mined and processed in China, which makes DOD’s weapon system programs vulnerable to supply chain disruptions by an adversary nation.”4 This aligns with Farrell’s findings of how interdependence can create channels of vulnerability.
The realization of the deep asymmetric economic interdependence that the U.S has with China has increased fears that complete economic decoupling is necessary to protect U.S. national security. For example, in July of 2025, the Department of Defense invested $400 million in MP Materials, demonstrating a leap into the goal to decrease dependence on China for rare earth minerals.5 While complete independence may seem the ideal choice, economic interdependence has proven to remain effective, and de-coupling would also eradicate the benefits of America’s relationship with China. Indeed, while “China’s autonomy has grown as its wealth has increased—but like every other actor in the international system, it remains constrained by its reliance on the global economy.”6 In other words, interdependence continues to be an effective means of constraining power. Similarly, academic literature posits that “The greatest hope for peace appears to arise from symmetrical trading relationships.”7
Echoing this sentiment, former Secretary of the Treasury, Janet L. Yellen, in a 2023 press release argued that “A full separation of our economies would be disastrous for both countries. It would be destabilizing for the rest of the world.”8 This view in particular considers the logistical hardships behind aiming to completely become economically independent. Similarly, a 2021 report by the CSIS considers the immense closeness between the economies and in the end, argues for “targeted decoupling,” as opposed to full and comprehensive decoupling.9
In the end, while there is an increasing sentiment that the US should seek to become independent as a means to cut the channels of vulnerabilities that asymmetric interdependence has created, especially in relation to the immense dependence that US has on certain materials needed for weapon production, complete decoupling should not be the answer. Interdependence so far has proven to have a relation to decreasing conflict when used strategically, and complete decoupling would create further problems considering the close relationship that the U.S. economy holds with others. As such, the U.S instead focuses on repositioning its independence to maximize its utility.
- National Security Strategy of the United States of America November 2025. Accessed September 30, 2026. https://www.whitehouse.gov/wp-content/uploads/2025/12/2025-National-Security-Strategy.pdf. ↩︎
- Polachek, S. W. (1980). Conflict and Trade. Journal of Conflict Resolution, 24(1), 55-78. https://doi.org/10.1177/002200278002400103 ↩︎
- Farrell, Henry, and Abraham L. Newman. “Weaponized Interdependence: How Global Economic Networks Shape State Coercion.” International Security 44, no. 1 (2019): 42–79. ↩︎
- Office, U.S. Government Accountability. “U.S. Gao.” Critical Materials: Action Needed to Implement Requirements That Reduce Supply Chain Risks, September 12, 2024. https://www.gao.gov/products/gao-24-107176. ↩︎
- Office, U.S. Government Accountability. “U.S. Gao.” Critical Materials: Action Needed to Implement Requirements That Reduce Supply Chain Risks, September 12, 2024. https://www.gao.gov/products/gao-24-107176. ↩︎
- “Remarks by Secretary of the Treasury Janet L. Yellen on the U.S. – China Economic Relationship at Johns Hopkins School of Advanced International Studies.” U.S. Department of the Treasury, April 20, 2023. https://home.treasury.gov/news/press-releases/jy1425. ↩︎
- The dangers of misunderstanding economic interdependence | Cato Institute. https://www.cato.org/publications/dangers-misunderstanding-economic-interdependence. ↩︎
- Barbieri, Katherine. “Economic Interdependence: A Path to Peace or a Source of Interstate Conflict?” Journal of Peace Research 33, no. 1 (1996): 29–49. http://www.jstor.org/stable/425132. ↩︎
- Segal, Stephanie, and Dylan Gerstel. “Degrees of Separation: A Targeted Approach to U.S.-China Decoupling – Interim Report.” CSIS. Accessed October 1, 2026. https://www.csis.org/analysis/degrees-separation-targeted-approach-us-china-decoupling-interim-report. ↩︎