Strategic Capital:
Reclaiming U.S. Influence Through Smarter Economic Engagement
In the global race for influence, economic engagement has become a key instrument of power. China is leveraging infrastructure financing, digital dominance, and state-backed investment to expand its global footprint. Ports, highways, and telecom networks are not just economic assets. They are expressions of political alignment. The United States, by contrast, has struggled to bring its economic tools into the center of its foreign policy strategy. This disconnect must change.
The People’s Republic of China is offering a model that merges finance with influence. Over 150 countries have signed onto Belt and Road projects. The scale is impressive. The terms are often opaque. Without a strategic response, the United States risks losing global market share, supply chain resilience, and geopolitical leverage. A recalibration of U.S. foreign assistance and investment is overdue.
Economic Engagement as Foreign Policy
For decades, the United States has separated its development assistance from its trade and finance policy. This fragmentation has weakened U.S. influence in emerging markets. Tools like the Development Finance Corporation (DFC), the Export-Import Bank (EXIM), and the Millennium Challenge Corporation (MCC) have not been used to their full potential. These agencies are designed to mitigate risk, catalyze private investment, and expand market access. They are underutilized.
Development is no longer about poverty reduction. It is about securing supply chains. It is about creating markets for American businesses. It is about reducing the appeal of authoritarian alternatives. A stronger strategy is required.
Strategic Gaps that Undermine U.S. Presence
Several sectors illustrate the erosion of U.S. leadership.
2. Digital Infrastructure and Governance: Chinese telecom firms dominate 4G and fiber networks in the Global South. U.S. firms are constrained by regulatory gaps, limited government backing, and low visibility. A secure and open internet cannot be assumed.
3. Strategic Minerals and Manufacturing: The PRC controls over 65 percent of global cobalt refining. Investments in Zambia and the Democratic Republic of the Congo are encouraging. The scale remains limited.
4. Small and Medium Enterprise (SME) Finance: Local businesses in emerging markets face persistent credit constraints. U.S. finance tools are complex, inflexible, and often slow to deploy. The private sector is sidelined.
A Smarter Path Forward
The United States does not need to match China dollar for dollar. It must use its tools with discipline and intent. Five priorities should guide a more strategic approach.
1. Modernize and Extend AGOA: The African Growth and Opportunity Act expired in September 2025. It should be renewed with updated criteria that promote value-added production, digital trade, and regional value chains. AGOA can become a platform for investment, not just market access.
2. Deploy DFC and EXIM with Greater Speed: Risk-sharing tools must be used to support U.S. investment in green tech, logistics, financial services, and agribusiness. The private sector must become a frontline actor in U.S. foreign policy.
3. Refocus on Local Job Creation: U.S. programs often emphasize financial inputs. Results should be measured in long-term employment, skill development, and business growth. Strategic competition will be won by countries that help build sustainable economies.
4. Lead on Digital Rules and Infrastructure: Investments in secure digital networks and clear regulatory standards can differentiate the United States from closed digital systems. Data privacy, e-commerce standards, and cybersecurity must be part of the U.S. engagement strategy.
5. Invest in Economic Resilience, Not Dependency: Transparency, local capacity, and fiscal sustainability must be core elements of U.S. projects. Countries need durable partners. The United States must be seen as a reliable choice.
The Migration Imperative
Migration pressures are rising. The Western Hemisphere faces persistent displacement, violence, and economic stagnation. Irregular migration cannot be solved at the border. It must be addressed upstream. U.S. assistance should invest in job creation, access to services, and governance in countries that are major sources of migration. These efforts serve American interests. They enhance regional stability. They reduce the burden on domestic systems.
A Defining Choice
Economic competition is now central to geopolitical leadership. The United States must decide whether to be a market-shaping leader or a reactive observer. Strategic capital is not a theory. It is a set of tools. The goal is influence that aligns with American values. The path is partnership, not extraction.
U.S. leadership will not depend on spending the most. It will depend on investing with purpose. The tools exist. The moment demands their full use.
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