Under the leadership of both Biden and Trump administrations, the United States has created strict rules about security. These rules limit the opportunities for trade and investments. It also stopped sharing controversial pieces of information. Political parties signed some agreements, resulting in more restrictions. This is because of the concerns arising due to China and Russia and issues like terrorism.
However, there is a problem with the government’s dealing with these rules. They do not closely examine the benefits and costs of these laws. There is not much strong evidence, but the report suggested that at the initial stage, these rules weakened US security instead of strengthening it.
To make progress in these rules, the US should have to change its strategy. It should pay attention to collecting data about how much these rules cost and what benefits they bring. This is similar to how data is gathered for rules about the environment and health. Using good data will help decide if these security rules are needed or if they should be changed or removed.
The US government needs to know that new rules show more benefits than costs. One can better understand it with this example. If cars cost more because of better emission standards, cleaner air, and lower health costs make it worth it.
In the case of national security, the government often neglects this analysis. It assumes that without focusing on cost, any action is good. The new proposed rules have limited investments with Chinese companies, particularly in technology areas. It includes semiconductors and artificial intelligence. This limitation has a great impact on US businesses, especially those that have Chinese investors, making it hard to know which companies will be restricted.
The government claims that national security benefits will outweigh the costs, but it hasn’t provided clear evidence to support this. Without a proper assessment, it’s unclear whether these rules truly help US interests or just raise costs for American companies without real benefits.
Currently, the United States is surging with many new national security rules. This strategy makes it hard for foreign companies to invest in US businesses. Many deals are being affected by these rules. All investors that belong to Europe are affected by it. However, there is an implementation of strict rules on American product exports that have led to many companies being banned from doing business.
Furthermore, business lobbyists have been inactive in passing any comments against these rules. Most government actions are confidential, so the public and courts never challenge these actions. Many companies are busy solving their own problems and don’t pay attention to taking any action against these rules.
According to recently explored data, these rules can be very expensive. Economists predicted that export control would cause billions of dollars in losses for United States suppliers. Many companies also faced different challenges in dealings due to the Committee on Foreign Investment in the US (CFIUS). It highlights that policymakers need to rethink the costs and corresponding security benefits.
The US penalty on Russia is decreasing the usage of the US dollar for international transactions worldwide, according to recent research by the French central bank. Approaching US financial institutions is usually necessary for major transactions, but penalties restrict this access and may cause targeted parties to become isolated. But if penalties are applied too frequently, they may lose their impact because nations may start looking for alternatives to the dollar.
The United States continues to apply penalties on many parties despite the failure to change certain behaviors, such as Cuba’s continued communism after more than 60 years of penalty.
The US government should judge the impact of its rules on alteration and commerce to remain competitive. Certain export hurdles may harm American companies more than those in other countries.
The government may make better judgments and stop overlooking the advantages and disadvantages of its national security measures by gathering information on these regulations. To determine if these regulations are beneficial or detrimental, data collection must be lobbied for.
