Geoeconomic Statecraft: Power Through Markets, Rules, and Infrastructure

Bonsoir à tous. That’s about the limit of my French — and I’m sure I mispronounced even that. [smile]
But what a joy to be here in Nice. The Riviera is famous for sunshine, the sea, and good wine — not tariffs, supply chains, or carbon border adjustments.

Yet maybe that makes it the perfect stage for this conversation. If we can’t find harmony here between the mountains and the Mediterranean, how can we hope to find it between Washington, Paris, and Brussels?

Nice itself has always been a place of convergence — Italian and French, Mediterranean and European, Roman history and modern Europe. It’s a reminder that the blending of cultures, ideas, and traditions can create something stronger, more enduring, more beautiful. That is exactly the kind of spirit democracies need if we are to succeed together.

This is my third talk in France in less than a year.
At Sciences Po in Paris, I spoke about how Colbert, Churchill, and John F. Kennedy still shape our political imagination.
At the AI Action Summit in Paris, I argued that the Enlightenment ideals born here — liberty, dignity, and reason — must guide the age of artificial intelligence.
And now, here in Nice, we turn to geoeconomics: how markets, rules, and infrastructure are shaping today’s strategic competition.

Why Geoeconomics, Why Now?

For thirty years after the Cold War, trade felt apolitical. Efficiency was the measure. Supply chains stretched around the globe. Globalization seemed benign.

But that era is behind us.

Today, every advanced chip, every LNG terminal, every undersea cable, every carbon border measure — all have become part of strategic competition.

The reason is clear: China’s rise. Since I cast my vote in Congress in 2001 to admit China into the World Trade Organization, Beijing has become the world’s largest trader, the dominant refiner of critical minerals, and a major force in batteries, EVs, telecom, and AI.

What was not clear when I voted was China’s resolve to bend global rules to embrace authoritarian rule.

For decades after 1945, America underwrote the world order as if it were a free gift: open markets, dollar stability, and security guarantees. That model worked when American dominance was unquestioned. With China’s rise as a peer competitor, sustaining leadership requires a new bargain: not that America does less, but that allies do more.

Though some in America don’t acknowledge it yet — and recent rhetoric may even suggest the opposite — the reality is unchanged: America has never needed allies more. U.S. power, no matter who is in the White House, is multiplied when it works hand-in-hand with Europe and other partners.

In this new era of strategic competition, geoeconomics take on new importance, as a supplement, not as a substitute for hard power. Geoeconomic statecraft in markets, rules, and infrastructure are today vital instruments of power. How are they best used?

France’s Lesson: Colbert and Bastiat

France’s history offers two lessons that still ring true.

Jean-Baptiste Colbert, Louis XIV’s finance minister, built Versailles with tariffs, subsidies, monopolies, and rigid control. The palace dazzled — but France was brittle. When the Seven Years’ War came, Britain’s openness and maritime dynamism gave it the edge. Britain gained Canada and India, commanded the seas, and became the world’s leading power. France, for all its glitter, was financially drained and strategically diminished.

A century later, Frédéric Bastiat reminded us that protectionism’s benefits are often illusions. What looks like gain usually hides greater loss. And he left us that timeless warning: “If goods don’t cross borders, soldiers will.”

So here’s the choice before us: Colbert’s rigidity, or Bastiat’s resilience?

With these contrasting approaches in mind, let us consider geoeconomics’ three battlegrounds.

The First Battleground: Markets

Markets are no longer neutral. They are contested ground.

• Semiconductors. In design, the U.S. seeks to leverage its dominant position through export controls. Yet more than 90 percent of the world’s most advanced chips are made on one island: Taiwan. One point of failure. A brilliant design means little if you can’t produce it at scale. Hence many countries deploying industrial policy to expand chip production.
• Energy. When Russia throttled gas to Europe, energy became a weapon. Germany and France scrambled to add LNG terminals. U.S. tankers helped neutralize Russia’s leverage to keep the lights on. Markets became weapons — but also lifelines.
• Critical minerals. Most refining of cobalt, lithium, and rare earths runs through China. Whoever refines, defines the pace of the clean-energy transition and controls key defense supply-lines. We must accelerate our joint efforts to reduce this shared vulnerability.

The lesson? Interdependence is fine. Over-reliance is not.

The Second Battleground: Rules

Rules are power. Whoever writes them, writes the future.

Take digital standards. At a salon dinner I co-hosted last night in Geneva, the question was: how do we collectively advance digital standards that ensure technology empowers citizens, instead of controlling them?

The inability of the U.S. and Europe to align on digital standards allows China to create facts on the ground that tie 85% of the world’s population to its surveillance and coercive technology, setting de facto standards by default.

At the AI Summit in Paris, I learned a new word: GAFAM — Google, Amazon, Facebook, Apple, Microsoft. I joked it was being used as a four-letter word. A Parisian lawyer replied, deadpan: “No, it is a five-letter word.”

Here’s the irony: when the EU points a finger at GAFAM with its regulations, it points three back at itself. Seeking to be a regulatory superpower penalizes Europe’s own innovators, driving them to build in America or the UK instead. Mario Draghi has warned of a “slow agony” if Europe continues regulations that smother competitiveness.

How do we unify to advance global standards? The answer is to recognize interoperability, but not as a universal entitlement. It should be shared freely among trusted democracies and partners, conditioned on reciprocity and export controls, and withheld from those who would exploit openness to erode liberty. Inside such a club, data would flow easily, identities would be portable, AI systems mutually certified. Outside, competitors find the gates closed.

And climate rules? A Singapore port executive once asked me about Europe’s Carbon Border Adjustment Mechanism saying, “Is the plan for decarbonization that poor countries pay rich countries tens of billions of dollars a year?” If CBAM is seen as fair, it helps. If seen as unfair, it fractures.

The lesson: rules must be fair, innovation-friendly, and interoperable through a club for good framework that builds trust.

The Third Battleground: Infrastructure

Ports, cables, clouds, grids — these are the Versailles of our age.

Chinese government-owned companies hold stakes in 120 ports outside China, including here in Europe, a huge point of leverage.
Huawei dominates telecom in Africa and Latin America. During a recent visit to Rome, I noted that the only billboard in Piazza Navona, amid Baroque fountains, wasn’t Italian — it was Huawei.

Digital infrastructure is more than leverage, it is data. Data flows are the new high ground. If most of the world’s data runs through authoritarian systems, Beijing wins control, surveillance, and advantages in AI that facilitate dominance in a wide range of markets.

And let’s be honest: the decisive battlegrounds won’t be Beijing, Brussels or Washington. They’ll be Lagos, Jakarta, São Paulo, Cairo, Riyadh, Nairobi. Whoever wires those cities will set the defaults of the future.

Our choice is simple: show up together with trusted, cost-competitive offers — or watch others set the rails the world runs on.

Where Strategy Falters

But here’s where democracies sometimes trip — on both sides of the Atlantic. Leaders can be tempted to reach for quick wins at home: tariffs that hit friends as well as rivals, subsidy races, or regulatory overreach. But let’s be candid: fragmentation among allies is the surest path to Beijing’s advantage. And while we argue, Beijing lays more fiber and installs more 5G.

Bastiat would tell us: the visible wins of protectionism often hide invisible costs — slower innovation, higher prices, brittle supply chains, and friction with friends.

The world is moving toward managed bifurcation — separate democratic and authoritarian ecosystems competing in chips, cloud, AI, and standards. Our task is to keep interoperability high among democracies, minimize risk across the divide, and avoid red-line dependencies that can be weaponized.

A Democratic Agenda for Geoeconomics

So what should we do?

First, make economics central to national security. Every administration in Washington publishes a National Security Strategy. None has produced a National Economic Strategy. That must change. In today’s world, economic resilience, supply chains, standards, and infrastructure are as decisive as ships and tanks. Security and economics must be written on the same page.

Second, build alliance autonomy, not illusions of national autonomy. Even the United States cannot stand alone. Fragmentation is failure, and failure would leave the world to Beijing’s defaults. The task is to lower barriers among allies and diversify supply chains across trusted partners for critical goods and services.

Third, make geoeconomics a team sport. Allies must co-design export and investment controls, industrial policies, and standards. Interoperability should be treated as a club good: open inside, guarded at the boundary, and tied to privileged access to democratic technology stacks. That is how we prevent China from writing the rules of the digital age and ensure our innovators have the scale to compete globally.

Closing: From Colbert to Bastiat

Colbert left us palaces. Bastiat left us principles. Colbert’s splendor made France brittle. Bastiat’s wisdom endures.

To neutralize authoritarian market distortions and counter coercion, we sometimes need Colbert’s firmness. But to remain resilient, innovative, and free, we must let Bastiat be our guide.

The old order—where one country carried the load—is gone. So too is the illusion that allies can simply wait out a political cycle in Washington. The new order must be built on shared responsibility and collaborative decision-making, anchored in structures that endure beyond partisan swings.

Together, we must ensure the dragon does not define the routes, write the rules, or own the rails of the global economy.

That is our task: to balance deterrence with dynamism, resilience with realism, and power with principle. The dragon must not write the rules of tomorrow. That charge, and that choice, belong to us.