From American Enterprise Institute <[email protected]>
Subject Reassessing the US Alliance System
Date July 11, 2026 11:07 AM
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AEI This Week

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COUNTERING CHINA

Reassessing the US Alliance System

July 11, 2026

The Trump administration has attempted to rethink America’s global alliance system—deemphasizing liberal internationalism, demanding greater burden sharing, and intensifying competition against China. In a new AEI report, Colin Dueck evaluates ([link removed] ) these efforts and highlights the counterproductive effects of the administration’s trade and industrial policy.

china_us_relations_beijing ([link removed] )

In May, Eileen Wang, the mayor of Arcadia, California, pleaded guilty to acting as an illegal agent of the Chinese government. Audrye Wong, author of the newly released Subversion and Seduction: China’s Economic Statecraft, draws out ([link removed] ) lessons America needs to learn from this episode about Beijing’s influence operations.

Among the landmark decisions at the end of this term, the Supreme Court in Trump v. Slaughter ruled that restrictions on the president’s ability to fire heads of administrative agencies are unconstitutional. Administrative law expert Philip Hamburger explains ([link removed] ) how the decision vindicates the Constitution’s proper separation of powers and ultimately reduces presidential power.

Perhaps the most remarkable development this term was that the Supreme Court vindicated its authority as it ruled against many of the president’s most important priorities, including birthright citizenship, tariffs, and Federal Reserve independence. Jack Goldsmith explores ([link removed] ) how the justices, armed with only “judgment and words,” have secured compliance from an executive branch that seemed poised to defy the judiciary.

President Trump has reshaped the Republican Party—attracting millions of new voters but challenging GOP orthodoxy on trade, government intervention, and foreign policy. In an essay for AEI’s National Affairs, Ethics & Public Policy Center political analyst Henry Olsen offers ([link removed] ) a political agenda that can unite populists and conservatives.

Prices Versus Quantities Revisited

What information do policymakers need to properly address market failures with taxes or subsidies? Should they focus on the cost of the externality or the magnitude of the tax’s overall effects? In a new National Bureau of Economic Research working paper, Edward L. Glaeser and coauthors develop ([link removed] ) a model that predicts the kind of information a policymaker would need to develop optimal tax policy. They find that when the tax would require high administrative costs, generate broader economic distortions, or have significant distributional effects, policymakers should focus more on understanding how the tax will actually change behavior. Case studies including congestion pricing in London and New York and housing subsidies in Boston show why that information is essential to designing effective policies—and preventing expensive and ineffective taxes or subsidies.

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QUOTE OF THE WEEK

The challenge posed by AI is not whether schools should be ‘for’ or ‘against’ technology. It is whether we can learn to distinguish technologies that deepen competence from those that merely simulate it, technologies that extend human judgment from those that replace it, and technologies that strengthen the social and intellectual purposes of schooling from those that erode them.

—Robert Pondiscio ([link removed] )

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