Proposing New Metrics for Economic Security Policy

Why It Matters

By quantifying the labor consequences of economic statecraft, policymakers can avoid unintended job losses and preserve strategic industries, enhancing both economic resilience and national security.

Key Takeaways

• Economic tools increasingly used for national security.
• Current trade models miss sanctions and export controls impacts.
• RAND proposes Worker ROI scorecard for policy analysis.
• Scorecard integrates foreign response and strategic capacity effects.
• Aims to protect U.S. workers from hidden costs.

Pulse Analysis

The rise of economic statecraft marks a fundamental shift in how the United States pursues security goals. Sanctions, export controls, and targeted subsidies now complement traditional military tools, creating a complex web of incentives and penalties that ripple through global supply chains. This evolution reflects a broader strategic calculus: leveraging economic leverage to deter adversaries while simultaneously shaping domestic industrial capabilities. However, the rapid deployment of these instruments has outpaced the analytical frameworks traditionally used by trade economists, leaving policymakers with an incomplete picture of their broader socioeconomic repercussions.

Conventional trade models excel at simulating tariff impacts and estimating consumer price changes, but they are ill‑equipped to handle the nuanced dynamics of sanctions or export restrictions. These tools can trigger multi‑layered foreign responses—such as counter‑sanctions, supply‑chain rerouting, or investment pull‑backs—that compound costs for American workers beyond the immediate sector targeted. Moreover, existing assessments rarely factor in the erosion of domestic capacity in strategic industries, a critical vulnerability in an era of heightened geopolitical competition. The analytical blind spot risks policy decisions that protect national security objectives at the expense of labor markets and community stability.

RAND’s proposed Worker Return‑on‑Investment scorecard seeks to bridge this gap by integrating economic, security, and labor dimensions into a single evaluative framework. By quantifying expected job impacts, accounting for potential foreign retaliation, and measuring effects on strategic industrial capacity, the scorecard offers a more holistic view of policy trade‑offs. This tool could enable legislators and agency leaders to design economic security measures that balance deterrence with domestic prosperity, fostering a resilient workforce while safeguarding critical supply chains. As economic statecraft becomes a staple of U.S. strategy, such nuanced analysis will be essential for informed, sustainable decision‑making.