NATO must be restructured to make economic security its core

The battlefield is shifting from troops and trenches to critical minerals, maritime insurance and export controls, and China, Russia, Iran and North Korea are all increasingly locked in an economic battle, as is the United States.

In order for the North Atlantic Treaty Organization (NATO) to remain an effective element, leaders need to use the upcoming summit, which will be held in the Turkish capital, Ankara, on the seventh and eighth of this July, to begin restructuring “NATO” so that its core is economic security, according to economic analysts Josh Birnbaum and Antonia Laura Pope.

Analyst Birnbaum, deputy director of the Center for Economic and Financial Power at the Foundation for Defense of Democracies, and analyst Laura Pope, a Fulbright researcher and teaching assistant at the Walsh School of Foreign Service at Georgetown University, said in a report published by the American magazine “National Interest” that at last year’s summit, military spending topped the agenda, and each member state except Spain pledged to spend 5% of its national income on defense.

But only 3.5% is scheduled to go to conventional defense, and the remaining 1.5% of GDP is allocated to crisis response and recovery efforts, which is required for economic security.

Last June, the administration of US President Donald Trump pressured NATO allies to remove communications equipment from the Chinese company Huawei due to the risks of cyberattacks and espionage. However, this weakness is only one of many. Over the past year, China has restricted and even banned exports of rare earth elements, critical minerals, magnets and battery technology, all of which are vital to the Western defense industrial base, and Europe’s aerospace and defense industry has warned that production could halt while orders increase.

NATO has identified 12 vital raw materials in the defense sector, from “gallium” to “titanium,” without which ammunition, radars, and modern aircraft cannot be manufactured, and China controls the supply of most of these materials.

If NATO is to rearm, its industrial base must be defended against enemies, and large defense budgets are meaningless when potential military adversaries control the supply chains that turn money into military power.

The danger is systematic and increasing. In 2024, China produced about 30% of the world’s manufactured goods, and by 2030, Beijing is expected to control a shocking 45% of all industrial production, which constitutes nearly half of the materials on which supply chains are built.

China’s practices of dumping in the export sector and stealing intellectual property represent a type of economic warfare that NATO countries lack good defenses to confront.

On the other hand, the EU is slow to act, consensus-driven, and painfully indecisive, and EU economic policy relies on inadequate tools such as an underused anti-coercion tool and a vital raw materials law that continues to leave defense companies struggling in the face of China’s export controls.

An economic NATO could fill that gap without the need for a new charter or a huge bureaucratic system.

At the July summit, NATO should prioritize two tasks. First: NATO should require that member states collectively map their defense supply chains to see where an export control could block a pan-European production line or leave soldiers with weapons and no ammunition.

Secondly: NATO must work to create a joint reserve of the vital minerals already mentioned. The Allies stockpile fuel and ammunition, and in an age when supply chains are weaponised, gallium and tungsten are ammunition.

The two analysts concluded their report by saying that NATO is a defensive alliance, but the meaning of defense is changing, and collective defense must extend to the economic foundations that support it.