# The West needs an economic NATO to counter China > Three authors argue the US, Europe and Japan must form a formal alliance with collective defense against Chinese economic coercion, backed by binding legislation. - Title: The West needs an economic NATO to counter China | Shortify - Summary: Three authors argue the US, Europe and Japan must form a formal alliance with collective defense against Chinese economic coercion, backed by binding… - Keywords: china, united states, european union, japan, economic coercion, trade, rare-earth elements, tariffs, nato, alliance, economic security, world - Source: Foreign Affairs — https://foreignaffairs.com/japan/how-america-can-counter-chinese-coercion - Author: Theodore Bunzel - Published: 2026-11-02T09:00:00+00:00 - Read time: 4 min - Topics: china, united states, european union, japan, economic coercion, trade, rare-earth elements, tariffs, nato, alliance, economic security, world ## China weaponizes trade against the US In April 2025, Beijing retaliated against US tariffs by imposing matching levies and export controls on rare-earth elements, disrupting auto supply chains and rattling bond markets. ## Japan faces rare-earth restrictions After Japanese Prime Minister Sanae Takaichi called a potential Chinese naval blockade of Taiwan a survival-threatening situation in November 2025, Beijing imposed suffocating bans on rare-earth exports to Japan. ## Europe confronts Chinese trade surplus The EU explored new tariffs in May 2026 to counter Chinese overcapacity as the trade deficit reached one point one billion dollars per day, but Europe negotiated alone after the US declined to join. ## China divides the Western alliance Beijing has broken the Western alliance into manageable pieces through divide-and-conquer strategy, fighting actors one on one. Its market heft and control over critical minerals have been decisive. ## China escalates economic penalties In 2023 and 2024, Beijing added only five Western companies to its Unreliable Entity List. In 2025 alone, it added 76, exposing them to financial and legal penalties. ## The case for an economic alliance The authors propose a formal economic security alliance with collective defense against economic coercion, modeled on NATO's Article 5, which considers an attack on one as an attack on all. ## The West's collective economic strength The US, Europe and Japan produce around three times the economic output that China does and control critical inputs China depends on, including lithography machines, chemicals and aircraft engines. ## China's hidden economic weakness Despite an official five percent GDP growth rate last year, Rhodium Group estimated China's actual growth was two point five to three point zero percent. Exports now fuel more than half of China's growth. ## Western allies have coordinated before During the Cold War, Western states formed the Coordinating Committee for Multilateral Export Controls to restrict sales to the Soviet Union. After the 1973 Arab oil embargo, they established the International Energy Agency. ## Recent Western initiatives have failed The US-EU Trade and Technology Council created in 2021 largely devolved into a talk shop. The EU's Anti-Coercion Instrument established in 2023 has yet to be used. The G-7 Coordination Platform contained no binding commitments. ## Trump's policies damaged Western trust US tariffs and threats to annex Greenland rattled trust among American allies. Washington's trade truce with Beijing dispelled illusions of a united front and made European partners doubt US support. ## Europe finally sees the Chinese threat Chinese auto exports to Europe increased by twenty-nine percent in 2025 and over sixty percent year-over-year in 2026. Germany's auto industry alone lost fifty thousand jobs in 2025. ## Remove Trump's tariffs on allies first The most important step will be terminating every tariff issued during the second Trump administration against any ally. This would present a unilateral demonstration of good faith and an opening gambit for alliance negotiations. ## Pledge support for coerced allies The White House should pledge support to any ally facing Chinese coercion by providing targeted economic assistance or access to stockpiles, such as rare earths in the US Strategic Critical Minerals Reserve. ## Build a formal economic security treaty A treaty's foundation would include an economic mutual defense commitment mimicking NATO's Article 5. Members would commit to providing targeted allies with economic assistance, preferential market access and access to critical goods. ## Embed the alliance in US law A congressional-executive agreement backed by legislation would embed the alliance firmly in US law and make it harder to unwind. Legislation should restrict any additional duties on alliance members unless approved by Congress. ## Americans oppose Trump's tariffs In a February Harris Poll survey, seventy-two percent of Americans agreed Trump's tariffs have had more negative than positive impact.In an August Ipsos poll, Americans opposed additional tariffs on Canada by nearly three to one. ## The alliance could expand over time Over time, the alliance could adapt to address broader economic security challenges. Members could coordinate tariffs on sectors distorted by Chinese subsidies, harmonize export controls and cooperate on critical minerals and AI development. ## The US must constrain its own power The central wager of an economic security alliance is that the US can gain leverage over China by surrendering some leverage over its allies. Washington must tie itself to the mast to restore Western trust. > The central wager of an economic security alliance is that the United States can gain leverage over China by surrendering some leverage over its allies. ## Key takeaway Theodore Bunzel, Edward Fishman and Addar Levi argue the US, Europe and Japan should form an economic security alliance with mutual defense commitments to counter China's divide-and-conquer strategy of economic coercion.