During the Helsinki Geoeconomics Week, I was given the opportunity to speak with academics, policymakers, as well as representatives of international companies. Together we discussed how organizations across the globe are coping with an increasingly complex geopolitical landscape. The constant flow of new measures, from adjusted US tariffs and export restrictions to ever-stricter Foreign Direct Investment (FDI) rules, have increasingly made long-term planning extremely difficult. After all, when making strategic decisions, companies tend to plan on a ten-year horizon, or even longer, explained by a senior director U.S. Public Affairs at Samsung. The persistent uncertainty makes it particularly challenging for sectors such as the semiconductor industry to make future-proof investments.

Companies use different strategies to deal with uncertainty, and a crucial first step, often underestimated, is to carefully map dependencies. Due to the long, complex and geographically dispersed supply chains that followed from an era of globalisation, companies are often dependent on a wide range of different suppliers. While it might sound logical to create an overview of your dependencies, in practice it proves extremely difficult for companies to gain this overview. Consequently, many companies hire specialized geopolitical analysts or professionals with similar expertise. Once potential bottlenecks are identified, companies try to diversify their suppliers so that they are not overly dependent on one single vendor. Yet in industries like semiconductors, where a few dominant players control critical stages of production due to the “winner-takes-most” dynamic, diversification is easier said than done. An alternative is vertical integration of critical parts of the supply chain, making companies less vulnerable to external disruptions. Take China’s flagship electric vehicle manufacturer, BYD, who has invested in its own ships for transporting its cars. But given the extreme specialization of companies in the semiconductor industry, making vertical integration a standard seems unrealistic.

Companies cannot tackle such challenges alone; they need an active government to reduce uncertainty. From small and medium-sized enterprises to multinationals, all voices in Helsinki emphasized the same need: stability. But what applies to business applies even more to government: it is essential to first develop a clear understanding of which companies are sensitive to which risks and from which countries these risks originate. Gaining a complete overview of supply chains is a first step toward genuinely reducing uncertainty. More extensive knowledge sharing and cooperation between businesses and ministries has potential, as ministries cannot do everything alone. Several people in Helsinki pointed to the potential of closer collaboration between the geopolitical analysts within companies and staff of relevant ministries. Another possibility would be greater collaboration between universities and ministries. For example, I was pointed to a study by the University of South Carolina that, at the request of the U.S. Department of Defence, mapped where all the components of drones come from and the extent to which the American drone industry heavily relies on China. These analyses represent an essential first step toward structurally reducing supply chain uncertainty.

Governments can learn a lot from countries in other parts of the world. Instead of focusing only on the U.S. and China, discussions in Helsinki often spotlighted the relevance of “smaller” countries such as South Korea and Japan. They demonstrate how a medium-sized economy can maintain strategic balance between the great powers. Japan, for example, was mentioned particularly often, as it has already experienced the use of penalising Chinese economic measures (as early as 2010 following a border conflict). Partly because of this wake-up call, Japan is now ahead of Europe in some respects, especially in terms of governance, as several speakers and participants noted. Japan has a ministry focused on economic security, centrally led by the Ministry of Economy, Trade and Industry (METI). With METI, the ministry coordinates policies to protect the economy from external shocks such as supply chain disruptions, technological theft and economic pressure from other countries. A special minister for economic security ensures cooperation between different ministries and coordination of measures, focussing on four pillars: strengthening and diversifying supply chains, protecting critical infrastructure, promoting strategic indispensability (for example a $65 billion investment in the chip industry) and international cooperation against economic coercion. 

That said, a description of Japanese policy says little about which lessons Europe can draw from it. The European Union, spearheaded by the European Commission, has in recent years also identified various objectives and set ambitious plans. But why has Europe remained unable to become more geoeconomically resilient, while a country like Japan succeeds? 

Throughout conversations in Helsinki, the case of ASML, the Dutch semiconductor manufacturing equipment giant, kept coming up. The question why the Netherlands (or the EU) has so far been unable to use ASML more forcefully to secure better conditions in international negotiations is one of great interest. Several reasons may be underlined, such as political fragmentation within Europe on economic security, which make EU negotiations on export restrictions particularly arduous. Eastern European countries, for example, feel especially threatened by Russia, and view the ASML case as a minor conflict on the side. This heavily contrasts with e.g. France, which would be much more comfortable to flex their economic leverage on America.  

Moreover, both Europe (e.g. in defence) and ASML itself (e.g. with its subsidiary Cymer in the US) depend on suppliers from the U.S, which further limits the Netherlands’ room for manoeuvre. These are both reasons why the Netherlands has not succeeded in putting the ASML case firmly on the European agenda.  

With the ASML case in mind, I approached American Political Scientist Abraham Newman to ask how he thinks the Netherlands/Europe could, through ASML, gain a better negotiating position. Newman pointed to the artificial separation between national security, the domain of the member states, and trade and market regulation, the domain of the European Commission (EC). This separation may have worked well during the period of globalisation and liberalisation, but today security and economy are increasingly intertwined, partly because an increasing amount of goods are being classified as dual use. As national interests do not always align with European interests (think of the ASML case), the European Commission may set many economic security goals, it simply lacks the necessary means to achieve them. 

This conflict of interests between the EC and its member states does not sound too promising. Questions like what are the purpose of setting goals to ensure economic security or why does the EC lack the measures to enforce them arise. Some possible answers can be found in Farrell and Newman’s latest article with Foreign Affairs. In their report, they argued that the European Commission lacks a central body with the authority and capacity to actually translate economic strategies into concrete actions. As mentioned earlier, Japan has already taken effective institutional measures here; the European Union could strengthen its own structures by using the Japanese model as an example. 

This conflicting interest between the EC and member states can only be resolved once the continent’s political divisions are addressed. Only then, a unified European voice can enact measures that allow the EC to enforce measures that ensure economic security. In conversation with a senior researcher at the Egmond Institute, the suggestion of greater Belgian-Dutch cooperation came up. This could place the issue more firmly on the European agenda, with Belgium (IMEC) and the Netherlands (Brainport Eindhoven/ASML) joining forces. The Semicon coalition launched earlier this year provides a platform for this. Closer cooperation between IMEC and ASML also creates opportunities to attract more European funds for further investment in the ecosystem. This could be seen as compensation for transferring a national competence to a European level. IMEC and ASML could also spread their investments more strategically across different European countries. For example, IMEC will soon expand with a new R&D facility in Spain. Further expansion into other European countries has the potential to align national interests more closely with shared European interests. 

The current period of uncertainty facing companies, governments, and citizens poses enormous challenges. Many dependencies have built up over decades and now suddenly appear to be used not only against U.S. adversaries, but even its partners are no longer safe. 

At first glance, this appears to give Trump considerable power: world leaders seem eager to win his favour, while companies pledge major investments in the United States. At the same time, one of the points emphasized repeatedly in Helsinki, among others by Eddie Fisherman (author of Chokepoints), is the structural damage that current U.S. policy causes in the long term. The phrase “chokepoints can be built or exploited, but not both at the same time” sums it up. Once chokepoints are deliberately weaponized, their leverage begins to erode. When countries recognize their reliance on something, and see that the controlling party is prepared to use that dependence against them, they will take steps to reduce those vulnerabilities. This argument aligns with the paper by Newman and Farrell in Foreign Affairs. They describe how the use of geoeconomic tools has changed over the years. For a long time the U.S. used economic weapons in the fight for “international legal objectives,” such as the fight against terrorism after 9/11 or sanctions against North Korea and Iran because of nuclear proliferation. But under Trump’s first term, the U.S. began using these tools to stop China’s rise (ZTE and Huawei), under the pretext of national security. Under Biden this process not only continued, it expanded in coordination with partners (including the Netherlands). In response, China has for years been working to reduce its dependence on the U.S. (or the West) and is rapidly developing its own chokepoints to strengthen its international position. In Helsinki, there was therefore significant focus on China’s dominant role in processing and exporting raw materials and critical minerals, a position that now lets it give the U.S. a taste of its own medicine.   

Despite all this uncertainty, I left Helsinki feeling hopeful. Not only is China working to reduce its dependence on the U.S., but Europe also arguably seems to have woken up. The current Trump administration is using geoeconomics for far more than national security (for example: extra high tariffs on Brazil and India, restricting and then suspending the export ban on Nvidia’s H20 chip, blocking ICC judges from Microsoft). In doing so, the U.S. is also increasingly distancing itself from its partners (including Europe). It will probably take Europe years, but the more the U.S. makes clear that it is willing to use dependencies against both adversaries and partners, the more isolated the U.S. will ultimately become, and the less power it will have as a result. How this will further develop remains an open question for me. Can Europe succeed in creating the necessary governance structures and, at the same time, in building its own tech stack (“Eurostack”)? Will the distance between the U.S. and its partners continue to grow, and what might be the consequences? These are questions for which I have not yet found the answer, but the discussions in Helsinki made clear that geoeconomics is no longer a niche topic but a defining framework for understanding today’s global economy and power relations.