Emerging Tech & American Isolationism: Consequences for AI, Drone, and Space Launch Technologies

Introduction

President Donald Trump’s return to the White House has brought sweeping changes to American foreign policy that have fundamentally altered the status quo in international relations. By wielding tariffs as a broad negotiating tool against allies and adversaries alike, the Trump Administration has forced longstanding trade partners to reevaluate their economic reliance on the U.S. As the U.S. pressures its allies to contribute more to NATO and, in a significant policy shift, pay for past and future American military aid to Ukraine, partner nations are also pursuing greater defense autonomy. Meanwhile, the U.S. has severely reduced its foreign aid and diplomatic initiatives, including the total shutdown of USAID and widespread layoffs across the State Department.

This whirlwind of changes has led many of America’s closest partners to consider turning elsewhere for economic and military stability. The European Union (EU) is moving to decrease its dependence on U.S. military equipment as it seeks to build up its own defense industry. Japan and South Korea are seeking a trilateral free trade agreement with China to hedge against the growing trade war with the United States. Members of the Five Eyes alliance, comprised of the U.S., United Kingdom, Canada, Australia, and New Zealand, are reportedly considering scaling back the intelligence they share with the U.S. because of growing levels of distrust.

These developments are occurring at a time of rapid change in the very nature of national defense, as emerging technologies advance at a dizzying pace. The U.S. is racing against China to develop and deploy Artificial Intelligence (AI) capabilities and wielding an array of policy tools like export controls in an attempt to maintain its vulnerable lead. Autonomous systems like air, sea, and land-based drones are ubiquitous on the battlefield in Ukraine, the largest war in Europe since World War II. And nations all over the world are exploring space as the final economic and military frontier.

A common thread across these emerging technologies is that they require a level of industrial capacity and scale that the U.S. has not prioritized for decades. Establishing and maintaining a technological edge is not just about funding breakthrough R&D; it hinges on producing advanced systems at volumes that unlock experience curves and network effects. It also requires striking a delicate balance between protecting domestic industry and partnering with nations whose industrial and technology capabilities complement America’s own.

It is still unclear how self-sufficient the Trump administration intends the U.S. to be in onshoring the production of advanced technology. For example, a White House press release boasted of Nvidia’s plans to “manufacture its AI supercomputers entirely in the U.S.,” proudly declaring it “the Trump Effect in action.” Yet the U.S. excluded Taiwanese semiconductors from its new tariffs, perhaps an acknowledgment that no U.S. facility (including TSMC’s in Arizona) can yet match Taiwan’s most advanced chips. One thing that is clear is that the Administration aims to sway partners with sticks, not carrots. President Trump has called on Congress to end the CHIPS and Science Act, the bipartisan bill passed in 2022 to subsidize domestic and foreign investment into America’s techno-industrial base, and has suggested that tariffs of up to 100% will instead force companies like TSMC to manufacture in the U.S.

Given the decades of global supply chain specialization that have reshaped its economy, it is far from clear whether the United States can now repatriate every stage of advanced technology production—and what complementary strengths from allies it would sacrifice by trying. Accordingly, maintaining and extending America’s technological edge is certain to be impacted by the strengths of its partnerships, at a time when many of those partnerships are on precarious grounds.

To better understand the relationship between America’s technological edge and its international partnerships, this paper seeks to do the following.

1. Analyze the importance of three critical emerging technologies to U.S. national security

• AI chips
• Drones
• Space Launch Technology

2. Discuss the key international players for these technologies, the strengths of the U.S. position in the broader ecosystem, and the need for international coordination

Finally, we will conclude with the following recommendations for how the U.S. can leverage the strengths of its partners to ensure it maintains a technological and industrial edge in its competition with China and other potential adversaries, across each emerging technology.

AI Chips

• Formalize and activate a Silicon Seven alliance of AI powers
• Prioritize talent circulation among partner countries
• Appoint a Dedicated U.S. Special Representative for Artificial Intelligence

Drones

• Establish a partnership with Ukrainian drone industry
• Build an international coalition for free trade of drone tech between allies
• Achieve allied consensus on restricting imports of Chinese made drones
• Use economic policies to incentivize cheap drone production in the U.S.

Space Launch Technology

• Promote U.S. market competition for reusable rockets
• Expand international space partnerships via the Artemis Accords
• Protect key rocket technology via a diffusion framework