The United States has spent the past year shoring up its economic defenses – stockpiling critical minerals, offering financial support to domestic mining and semiconductor firms, and erecting tariff walls around strategic manufacturing industries. These are prudent moves for an age of rivalry. But defense alone won’t win the competition now unfolding for influence over the world economy.

The decisive battles for economic and technological leadership will be fought abroad – where copper, lithium and rare earths are mined, where digital infrastructure is deployed and where standards for AI are being written. America cannot simply build walls around its domestic economy and hope for the best. It must project power through investment, innovation and influence.

That’s why the reauthorization of the U.S. International Development Finance Corporation (DFC) is more than a routine congressional review. It is a test of whether Washington can play offense. The DFC is already equipped to be the tip of the spear for U.S. economic statecraft, but with the right mandate and reforms it will more effectively mobilize private capital to secure America’s interests in the world’s most consequential industries.

Young, With Untapped Potential

Launched in 2019, the DFC was designed to replace the old Overseas Private Investment Corporation and modernize America’s development finance tools. But it has barely begun to use the full scope of its authority. Many of its early projects followed the familiar pattern of traditional development lending. To compete in a far more contested landscape, the agency must now evolve from a cautious financier into a strategic investor – one capable of building platforms that embed U.S. priorities directly into global supply chains.

A reauthorized DFC, backed by bipartisan momentum in Congress, could finally realize that vision. By expanding its equity authority, lifting outdated recipient country-income restrictions and streamlining approvals, the agency could do what no other instrument in the U.S. toolkit can: translate foreign policy goals into profitable, scalable investment vehicles that crowd in private capital in line with national security priorities.

From Defense to Offense

America has spent years on defense, trying to reduce its vulnerabilities to rivals. It has poured money into domestic chip plants, advanced manufacturing and AI research. But the resources that power those industries – critical minerals, digital infrastructure and frontier technologies – are global. Influence over them will determine who leads the next century.

• In critical minerals, the United States has taken significant steps to reactivate its domestic mining industry. However, it cannot completely solve its supply chain vulnerabilities alone – the richest deposits of copper, cobalt and graphite are abroad, while foreign competitors dominate processing.
• In emerging technology, the global AI race will be won not in Silicon Valley or Beijing alone, but in markets outside China and the U.S., where four-fifths of the world’s population live and where governance models and standards are still up for grabs.
• In digital infrastructure, data centers, undersea cables and cloud services are expanding in emerging markets. If the U.S. doesn’t finance that build-out using American hardware and software, someone else will take on the task – and they’ll have enormous influence over the rules adopted for the digital economy in the process.

To compete, Washington needs more than defensive subsidies. It needs an offensive investment strategy – and the DFC is the only instrument with the flexibility, equity authority and credibility to deliver it.

Full Speed Ahead

Congress’s reauthorization bill should focus on turning the DFC into a strategic capital platform, not just a development lender. That means three things.

First, give it global reach. Current income restrictions prevent DFC from investing in several of the world’s most strategic hubs – Panama, Chile and Palau – because they’re classified as “high income.” Those rules make little sense in a world where national interest, not income per capita, determines strategic value.

Second, expand and accelerate its equity authority. Equity gives the U.S. a seat at the table in companies and funds that shape future industries. It crowds in private investors and lets DFC bake policy goals – goals ranging from ensuring U.S. access to minerals to adoption of transparent AI governance standards – into ownership structures.

Third, cut the red tape. Streamlined certification and higher thresholds for congressional notifications would let DFC move at market speed. As many U.S. foreign policy practitioners have complained, it is difficult to win a global competition when every deal requires a congressional hearing. 

Where America Leads

Unlike its competitors, the United States doesn’t need to run state-owned conglomerates to project influence. Its strength lies in deep capital markets and a vibrant private sector. And when the U.S. government partners with private investors, it multiplies the impact. A single DFC-backed dollar can unlock 10 from pension funds, sovereign wealth funds and corporations that would otherwise stay on the sidelines.

A reauthorized DFC could turn U.S. strategy into action by creating bespoke, profit-driven investment platforms that align national security with market forces. Through equity stakes, DFC could embed U.S. priorities directly into each deal, move at private-sector speed, and mitigate political risk while signaling high-standard American partnership in critical sectors like mining and technology. For example, a DFC-led critical mineral financing platform in Latin America could channel capital from the Inter-American Development Bank, a Detroit automaker and a Persian Gulf sovereign wealth fund to secure critical mineral flows that anchor a new copper smelter in Louisiana. 

Why It Matters

The industries that define this century – AI, advanced manufacturing, resilient energy – are built on global supply chains. America’s competitors are already shaping those supply chains to their advantage. Properly equipped, a reauthorized DFC could ensure that the next generation of industrial development aligns with the U.S. innovation economy.

If the U.S. fails to act, others will. But if Washington moves now, mobilizing its financial firepower, modernizing the DFC and putting private capital to work in the world’s strategic frontiers, it could restore American leadership in the global economy. Defense may keep America in the game. Offense is how it wins.