Key Takeaways
- •Jacob Helberg announced the State Department is prioritizing commercial diplomacy to counter Chinese economic coercion by leveraging private sector investment and multilateral frameworks like the Indo-Pacific Economic Framework.
- •Jacob Helberg (Under Secretary of State for Economic Growth, Energy, and Environment) testified that the U.S. must provide transparent, market-based alternatives to China's predatory lending in the Global South.
- •Rep. Christopher Smith (R-NJ-4) pressed Helberg on preventing dual-use technology transfers to China, leading Helberg to describe a "small yard, high fence" strategy for protecting foundational technologies.
- •Rep. Brian Mast (R-FL-21) and Rep. Gregory Meeks (D-NY-5) agreed on countering Chinese economic influence, though Meeks emphasized aligning commercial engagements with human rights and labor standards.
- •The State Department will continue expanding the Mineral Security Partnership and IPEF to secure critical mineral supply chains and establish 21st-century digital trade rules with global partners.
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Hearing Analysis
Overview
The House Foreign Affairs Committee held a hearing on February 24, 2026, titled "Advancing National Security through Commercial Diplomacy" to examine how the U.S. Department of State integrates economic statecraft into broader foreign policy. Chairman Brian Mast (R-FL-21) opened the session by arguing that economic tools are as vital as military ones in an era of global competition, specifically citing the need to counter the Chinese Communist Party’s (CCP) use of predatory lending and state-subsidized industries. Ranking Member Gregory Meeks (D-NY-5) echoed these sentiments, emphasizing that commercial diplomacy must align with American values, including human rights and labor standards, while advocating for a multilateral approach with allies to address non-market economies.
Key Testimony
The sole witness, Jacob Helberg, Under Secretary of State for Economic Growth, Energy, and Environment, testified that "economic security is national security." He outlined a strategy focused on three pillars: securing critical supply chains, promoting American innovation in emerging technologies like AI and quantum computing, and providing a transparent economic alternative to adversarial coercive practices. Helberg highlighted several key initiatives, including the Indo-Pacific Economic Framework (IPEF), the Americas Partnership for Economic Prosperity (APEP), and the Partnership for Global Infrastructure and Investment (PGI).
Overview
A significant portion of the hearing focused on countering the People's Republic of China (China). Helberg described China’s "debt-trap diplomacy" in Africa and Latin America, where opaque loans for infrastructure lead to the seizure of strategic assets. To counter this, he pointed to the Lobito Corridor project—a rail line connecting the Democratic Republic of the Congo (DRC) and Zambia to the Port of Lobito in Angola—as a model for high-quality, sustainable investment. Members also discussed the "Rip and Replace" programs intended to transition developing nations away from "untrusted vendors" like Huawei Technologies Co., Ltd. (Huawei) and ZTE Corporation (ZTE) toward "trusted vendors" such as Nokia Corporation (Nokia), Ericsson, and Samsung Electronics (Samsung).
Policy Proposals
Policy discussions touched on the "small yard, high fence" approach to technology protection. Rep. Christopher Smith (R-NJ-4) and Rep. Darrell Issa (R-CA-48) raised concerns about intellectual property (IP) theft and the diversion of dual-use technology to the Chinese military. Helberg explained that the State Department works closely with the Bureau of Industry and Security (BIS) at the United States Department of Commerce (Commerce) to tighten export controls on foundational technologies like advanced semiconductors. He also noted that the State Department coordinates with the United States Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI) to identify entities involved in state-sponsored IP theft and has implemented tighter visa screenings for certain researchers.
Overview
Energy security was another major theme. Rep. Joe Wilson (R-SC-2) discussed the strategic importance of U.S. Liquefied Natural Gas (LNG) exports to the European Union (EU) following the Russian Federation's (Russia) invasion of Ukraine. Helberg detailed efforts to promote U.S. Small Modular Reactor (SMR) technology through the FIRST program to build long-term energy partnerships. Furthermore, the hearing addressed the Mineral Security Partnership (MSP), a coalition of 14 countries and the EU designed to secure supply chains for critical minerals like lithium and cobalt, ensuring the U.S. does not trade dependence on Russian gas for dependence on Chinese minerals.
The hearing demonstrated strong bipartisan consensus regarding the threat posed by China’s economic influence. Both parties supported the use of the United States International Development Finance Corporation (DFC) and the Export-Import Bank of the United States (EXIM) to de-risk private capital for international projects. However, Rep. Brad Sherman (D-CA-32) questioned whether these agencies move fast enough to compete with state-backed Chinese firms. Sherman also raised concerns about the primacy of the U.S. dollar, asking how commercial diplomacy can counter the rise of Central Bank Digital Currencies (CBDCs) like China's digital yuan. Helberg responded that the United States Department of the Treasury (Treasury) is leading technical efforts to modernize cross-border payments to ensure dollar-based transactions remain the most efficient global option.
The following organizations were identified and discussed: - United States Department of State (State Department): The lead agency for commercial diplomacy, tasked with integrating economic statecraft into foreign policy. - People's Republic of China (China): Identified as the primary strategic adversary using "debt-trap diplomacy" and IP theft to expand global influence. - United States International Development Finance Corporation (DFC): Discussed as a critical tool for providing financing alternatives to Chinese infrastructure loans. - European Union (EU): Mentioned as a key partner in the Mineral Security Partnership and the Trade and Technology Council (TTC) to align export controls. - Russian Federation (Russia): Referenced regarding its weaponization of energy against Europe and the subsequent U.S. effort to provide LNG alternatives. - Export-Import Bank of the United States (EXIM): Cited as a financing mechanism to help American companies compete against state-subsidized foreign firms. - Huawei Technologies Co., Ltd. (Huawei): Labeled an "untrusted vendor" in telecommunications that the U.S. seeks to exclude from global 5G networks. - United States Department of Commerce (Commerce): Mentioned regarding its Bureau of Industry and Security (BIS) and its role in managing export controls. - Group of Seven (G7): Identified as a primary multilateral forum for coordinating economic security and infrastructure investment through the PGI. - Socialist Republic of Vietnam (Vietnam): Noted as a key partner in the IPEF and a destination for "friend-shoring" manufacturing. - United States Department of the Treasury (Treasury): Referenced as the lead agency on the technical aspects of Central Bank Digital Currencies and financial standards. - Samsung Electronics (Samsung), Nokia Corporation (Nokia), and Ericsson: Praised as "trusted vendors" for telecommunications infrastructure. - ZTE Corporation (ZTE): Identified alongside Huawei as a security-risk vendor in the digital ecosystem. - Canada and Australia: Mentioned as partners in the Mineral Security Partnership to diversify critical mineral supply chains. - Republic of Indonesia (Indonesia): Referenced as a member of IPEF and a potential partner for clean energy technology. - Republic of Zambia, Democratic Republic of the Congo (DRC), and Republic of Angola: Discussed in the context of the Lobito Corridor infrastructure project. - Ukraine: Mentioned regarding the impact of the Russian invasion on global energy security. - Committee on Foreign Investment in the United States (CFIUS): Referenced as a model for investment screening that the U.S. is helping allies implement. - United States Department of Labor (Labor): Mentioned as a collaborator with the State Department on aligning diplomatic efforts with domestic workforce development. - United States Department of Justice (DOJ) and Federal Bureau of Investigation (FBI): Identified as partners in investigating and enforcing actions against state-sponsored intellectual property theft.
Transcript
[Gavel sounds.] The committee will come to order. The Chair is authorized to declare a recess of the committee at any time and without objection is directed to provide a 24-hour notice of any markup. I now recognize myself for an opening statement. Today, we are here to discuss a critical, yet often overlooked, pillar of our foreign policy: commercial diplomacy. In an era of intensifying global competition, our economic tools are just as vital as our military and traditional diplomatic ones. For too long, we have allowed our adversaries, particularly the Chinese Communist Party, to weaponize trade and investment to expand their influence and undermine the rules-based international order. They use predatory lending, forced technology transfers, and state-subsidized industries to gain a foothold in strategic markets around the world. To counter this, the United States must be more proactive. We must leverage our greatest strength: our private sector. Commercial diplomacy is about more than just helping American companies sell products abroad; it is about advancing our national security interests by building resilient supply chains, promoting high standards, and offering a transparent alternative to the CCP's model. I am pleased to welcome our witness today, Under Secretary Jacob Helberg, who has been at the forefront of these efforts at the State Department. I look forward to hearing about how the Department is integrating economic statecraft into our broader foreign policy strategy. With that, I recognize the Ranking Member, Mr. Meeks, for his opening statement.
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