February 13, 2025

ALI Perspective

The threats and imposition of tariffs, combined with the dismantling of USAID, represent a significant abdication of U.S. global leadership. The effective use of economic engagement including through trade, development assistance and financing, create smart power for America and are an essential compliment to military power.

USAID has been a leading purveyor of American smart power over the past 60 years. By supporting education and fighting disease and hunger globally, the U.S. has created allies throughout the developing world. In addition to the important moral arguments, the U.S. benefits by supporting global healthcare, since when diseases spread, they eventually make their way to the U.S. The U.S. benefits from providing food aid since it creates more economic opportunity and security the recipient countries, reducing the likelihood of political instability, which, in turn, can result in terrorism and migration.

Another key tool of U.S. smart power has been its creation and support for the international trading system. While the trading system needs to be updated to reflect current realities, the U.S. has always been a trusted partner, working constructively with its allies to resolve disputes as they arise. The U.S. should instead partner with our allies to negotiate agreements in new areas such as digital, AI, biopharma and critical minerals.

Unfortunately, the shift to trade disruption rather than setting new rules, together with the dismantling of USAID, makes America weaker and less able to advance U.S. interests and shared values. Other countries, like China will move in to fill the vacuum.

The U.S. has spent generations building good will around the world, which is being rapidly squandered, the consequence of which may take generations to rebuild.

ICYMI

ALI hosted a conversation on "The Path Forward for U.S.-China Relations with Reps. Ami Bera and Val Hoyle, as well as a diverse group of experts and stakeholders. Participants noted that China is watching America’s current chaos and dysfunction, which it views as an opportunity to fill the void in global leadership

The conversation highlighted the need to continuing the small garden and high fence approach to protecting U.S. technology, as opposed to further decoupling, as well as the importance for the U.S. to continue to invest in education and technology to run faster and compete.

Tariff Training for Hill Staff: ALI hosted a training for 40 Capitol Hill staff, covering the basics of tariff history and authorities, a deep dive into the Administration's tariffs initiatives to date and foreign retaliation, as well as a conversation on how tariffs are scored in the budget and the "Department of External Revenue." The staff also had a useful conversation on the role of Congress.

Check out ALI's New Paper: America's Technology Lead Depends on High Skilled Workers

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Coming Up

ALI has a robust agenda for the Spring:

Upcoming programs on AI governance and USMCA
Paper on U.S.-EU digital regulation
ALI's May Summit exploring President Trump's first 100 days

What We're Reading

Center for American Progress: How Trump's Attacks on USAID Undermines American Leadership and Security

"Slashing the U.S. foreign assistance budget is a textbook example of penny-wise, pound-foolish. In fiscal year 2023, USAID managed a budget of $43 billion, comprising about 0.7 percent of the total U.S. budget."

Council on Foreign Relations: The Costs of Tariffs

"The best evidence suggests that tariffs are paid largely by domestic consumers and manufacturers, not foreign producers. They effectively act as a tax on Americans, and a particularly regressive one at that, given that the lower a household’s income, the greater a proportion of its income it spends on imported household goods."

Center for a New American Security: Biopower

"The biorevolution is upon us. Converging breakthroughs in biological sequencing, engineering biology, and machine learning are ushering in an almost science fiction–like world in which humans can manipulate and even design the building blocks of life with increasing sophistication—for good or ill."

Providing a new vision for American global leadership