HOUSE FOREIGN AFFAIRS COMMITTEE
SUBCOMMITTEE HEARING
For questions on the note below, please contact the Delta Strategy Group team.
On July 14, the House Foreign Affairs Committee Oversight and Intelligence Subcommittee held a hearing entitled “U.S. Economic Security and Investment Abroad: Assessing Economic Security Zones.” Witnesses in the hearing were:
- Erick Brimen, Founder and CEO, Prospera International
- Michael Hollomon, Chief Commercial Officer, US Strategic Metals
- Paul Sullivan, President of International Business, Acrow Bridge
- Clark Packard, Research Fellow, Herbert A. Stiefel Center for Trade Policy Studies, CATO Institute
Below are several key takeaways from the hearing prepared by Delta Strategy Group.
KEY TAKEAWAYS
- Representatives and witnesses outlined Economic Security Zones (ESZs) as a framework to strengthen trusted supply chains, attract U.S. investment, reinforce partnerships with allies, and provide a durable foundation for U.S. economic statecraft through coordinated governance, legal certainty, and political risk protections.
- Discussions highlighted trade agreements and enforcement, commercial diplomacy, export and development finance, and interagency coordination as complementary tools to strengthen economic partnerships, support U.S. companies abroad, reinforce allied supply chains, and advance ESZs.
- Representatives and witnesses contrasted China’s state-backed financing, infrastructure, diplomacy, and coordinated government support with U.S. efforts to strengthen economic partnerships, strategic supply chains, and competitiveness through trusted allies and existing government tools.
- Comments reiterated reducing dependence on China for critical minerals and strategic supply chains. Discussions highlighted refining and processing capacity, logistics corridors, infrastructure, strategic partnerships, and domestic production as key components of long-term economic security.
SUMMARY & DISCUSSION
Economic Security Zones
- Subcommittee Chairman Mills (R-FL) framed ESZs as industrial hubs to build a trusted ally network, secure critical industries and supply chains, reduce dependence on coercive trading regimes, and strengthen the Western Hemisphere through bilateral agreements. He praised Pax Silica and highlighted the Philippines as the first Economic Security Zone.
- Mills outlined that ESZs should ensure transparency, reliable contract enforcement, accountability, the rule of law, intellectual property protection, prevention of illicit trade, and high standards for public-private partnerships.
- Subcommittee Ranking Member Moskowitz (D-FL) described ESZs as a way to concentrate development in strategically important industries, reinforce trusted allies, and complement domestic investment.
- Brimen emphasized long-term stability, durable commitments across political transitions, immediate consequences for violations, political risk protections, fair dispute resolution, and a modern regulatory environment. He framed governance itself as infrastructure, asserting that credible legal frameworks, rather than subsidies, attract U.S. capital.
- Sullivan recommended making infrastructure a core ESZ component, alongside promoting procurement that rewards lifecycle value, technical integrity, durability, and local capacity. He also raised ensuring small and medium-sized U.S. exporters have a meaningful role in the Zone architecture.
- Hollomon said ESZs should complement existing tools such as the Export-Import Bank (EXIM), the U.S. International Development Finance Corporation (DFC), the Department of Commerce, and the Department of Defense (DoD). He contrasted this with China’s whole-of-government approach that combines financing, insurance, diplomacy, infrastructure, and state-backed institutions.
- Miller cited the Luzon Economic Corridor and asked where else the model could be expanded. Brimen identified the Western Hemisphere, including Panama and Honduras, as well positioned for ESZs.
- Mills asked how proposed ESZs compare to Honduras’ Zones for Employment and Economic Development (ZEDEs), alongside how political risk insurance and long-term governance commitments could strengthen investment. Brimen responded that ESZs seek to create predictable governance conditions for U.S. companies abroad and, with strong statutory foundations, would closely resemble ZEDEs.
Trade Agreements, Enforcement, & Tariffs
- Mills highlighted the Australia-United Kingdom-U.S. (AUKUS) security partnership and eased International Traffic in Arms Regulations (ITAR) restrictions for Five Eyes intelligence alliance partners as mechanisms to strengthen economic and security partnerships. He asked how the U.S. Foreign Trade Zone program could fit into the Economic Security Zone network.
- Packard said free trade agreements (FTAs) have historically been used to raise standards by encouraging investment-welcoming conditions and that they provide more stable, legally codified frameworks than ad hoc arrangements.
- Brimen and Packard agreed that FTAs are powerful legal tools that have not yet been used to anchor ESZs and that they could provide legal stability, help neutralize political risk, and create favorable conditions for U.S. enterprise abroad, particularly when coupled with political risk insurance.
- Packard said the U.S. should reengage on FTAs, citing the first Trump Administration’s negotiations with Kenya as a positive step, and he noted that the U.S. has not concluded a new trade agreement with a new country in fourteen years other than the U.S.-Mexico-Canada Agreement (USMCA). He said tariffs create incentives to circumvent trade barriers, while FTAs can be used strategically to strengthen cooperation with allies and improve enforcement.
- Mills asked how the U.S. and host countries should provide oversight for ESZs to prevent illicit trade activities. Packard pointed to stronger customs screening, enhanced technology, and coordination with allies to address trade fraud and transshipment.
- Moskowitz criticized broad-based tariffs for imposing significant costs, citing higher prices, greater business uncertainty, increased manufacturing costs, manufacturing job losses, and limited progress in reducing the trade imbalance.
Supply Chains, Logistics Corridors, & Infrastructure
- Sullivan highlighted infrastructure as a core component of economic security that determines how supply chains function and whether strategic dependencies are strengthened or reduced. He cited Acrow’s 186-bridge project in Angola as an example of how logistics corridor initiatives can catalyze broader infrastructure investment by fostering bilateral coordination, trust, and long-term partnerships.
- Sullivan outlined how ESZs should be built around trusted infrastructure, resilient supply chains, transparent procurement, diversified financing, and strong local capability, and he warned that infrastructure financed or built through opaque practices can create new dependencies and weaken local sovereignty.
- Davidson highlighted EXIM’s Vault initiative, efforts to establish parameters around the DPA, and capital formation in allied countries as mechanisms to de-risk critical supply chains.
- Mills asked how logistics corridors would operate within a network of ESZs. Hollomon described a logistics corridor as the transportation network connecting critical minerals from extraction through processing and shipment to end users. He cited the Lobito Corridor connecting the DRC, Rwanda, Burundi, and Angola through east-west rail infrastructure to reduce reliance on China-bound routes and support U.S. processing capacity.
Critical Minerals, Metals, & Rare Earths
- Mills called for reducing dependence on China for rare earths and critical minerals, expanding beyond China’s Africa strategy through deep seabed harvesting under the Law of the Sea, strengthening bilateral and trilateral agreements, and leveraging quantum entanglement and drone capabilities.
- Mills praised Nippon Steel’s $14.4 billion investment in U.S. Steel for preserving preferential treatment for U.S. Steel while incorporating protections that otherwise would have required review by the Committee on Foreign Investment in the U.S. (CFIUS).
- Moskowitz cited bipartisan concern regarding China’s role in critical minerals and emerging technologies. He stressed the importance of strengthening domestic production and educating the public on the national security implications of mineral supply chains.
- Representative Miller (R-OH) asked where critical-minerals-focused ESZs make the most sense given China’s extensive involvement in Africa. Hollomon responded that China has spent approximately 25 years and an estimated $8 trillion building its critical minerals position in Africa while prioritizing strategic rather than financial returns.
- Hollomon cited the U.S. Geological Survey’s (USGS) 2026 assessment that the U.S. relies on China as the leading import source for fourteen of 33 critical minerals. He referenced how the U.S. is 100 percent import-reliant for thirteen of them and more than fifty percent import-reliant for twenty others, underscored by how China holds an average global refining market share near seventy percent.
- Representative Davidson (R-OH) noted how China’s dominance in rare earth processing prevents normal price discovery and makes it difficult for U.S. companies to raise capital and develop domestic production. He discussed EXIM’s Vault initiative, which would establish a stockpile of sixty critical minerals with twenty percent private-sector participation, along with equity investments under the Defense Production Act (DPA) that require companies to deliver production capacity rather than reliance on repeated grant funding.
Financing & Commercial Diplomacy
- Brimen said the most important policy tool would be one focused on neutralizing political risk at scale, stating that other forms of financing are secondary and that existing protections, including treaty protections, contractual stabilization commitments, and arbitration, do not provide timely or effective remedies when governments change investment rules.
- Sullivan highlighted commercial diplomacy, official advocacy, export finance, and development finance as essential tools, particularly in emerging markets. He emphasized the roles of U.S. embassies, the Foreign Commercial Service, State, Commerce, interagency Deal Teams, EXIM, DFC, and the U.S. Trade and Development Agency (USTDA) in promoting fair procurement and helping U.S. firms compete.
- Sullivan discussed how financing is essential to competing in emerging and frontier markets, cautioning that the U.S. is within six months of EXIM lapsing. He warned that uncertainty surrounding EXIM’s authorization is already causing foreign governments to question whether the U.S. can reliably deliver projects on schedule.
China & Global Competitiveness
- Mills contrasted China’s use of economic coercion and resource exploitation with the quality, innovation, and capabilities of U.S. companies. He called for the U.S. to become an active participant in strategic markets rather than remaining on the sidelines.
- Davidson said the U.S. should compete with China without adopting a central planning or state-owned enterprise model, arguing that preserving private-sector demand signals is essential to long-term competitiveness and that China’s failure to compete on a level playing field and meet its World Trade Organization (WTO) commitments has distorted global markets.
- Hollomon said ESZs provide the U.S. with a market-based approach to compete more effectively against China’s state-backed model.
- Sullivan recommended expanding official advocacy and enabling U.S. agencies to operate at the pace of strategic competition, paired with strengthening coordination among State, Commerce, EXIM, DFC, and USTDA.
- Sullivan referenced how U.S. companies increasingly compete against foreign systems rather than individual firms, highlighting how Chinese state-owned and state-supported enterprises compete with subsidized finance, bundled construction and project packages, diplomatic and political backing, and coordinated government support. He noted similar coordinated national export strategies among some European competitors.