by Natasha Puri
Junior Staffwriter
This week at Carnegie Mellon, around 30 students gathered for a talk and discussion with the Former U.S. Treasury Assistant Secretary and Former Director of International Finance at the National Security Council, Mr. Clay Lowery, a guest speaker at Carnegie Mellon’s Alexander Hamilton Society.
Mr. Lowery, who currently serves as the Executive Vice President of Research and Policy at the Institute of International Finance (IIF), gave his insights on sovereign debt and the changing face of traditional diplomacy. Afterward, he opened the floor for an interactive discussion with students.
Lowery began his talk by discussing the growing intersection of foreign policy and economics, explaining how financial tools — both positive (“carrots”) and
negative (“sticks”) — play pivotal roles in shaping global relations. Drawing from his experience, Lowery highlighted the power of the U.S. economy and the influence of its large markets, emphasizing how the country’s economic
stability and dynamism remain key to international partnerships and influence.
He further explored examples of U.S. involvement in global crises, such as the Mexican financial crisis, and explained the role of financial institutions like the IMF and World Bank in offering assistance and leveraging U.S. influence to stabilize economies worldwide.
Lowery explored the possibility that President Trump was attempting to build leverage for negotiations by announcing his recent tariffs. He referenced the recent tariff threats made against Colombia for blocking flights carrying undocumented immigrants from the U.S. President Trump also threatened both Canada and Mexico with 25 percent tariffs, these tariffs have not been imposed but rather framed as achieving significant negotiations. In Mexico and Canada, Trump pushed for measures to stop fentanyl and undocumented immigrants from crossing the border.
However, Lowery noted that Canadian leadership may have found Trump’s fentanyl-related concerns puzzling, as the issue is more prevalent from the U.S. into Canada. He noted that while some leverage tactics work, others risk economic harm. For example, imposing tariffs on Canada and Mexico could impact U.S. GDP and cause harm to farmers, with the U.S. being a major importer of energy from Canada.
Ultimately, Lowery questioned whether these tactics would lead to meaningful results, particularly in the context of trade deals like the one with China, which he characterized as a purchasing agreement rather than as a comprehensive trade resolution.
Lowery, former head of the Committee on Foreign Investment in the United States (CFIUS), discussed its role in assessing foreign investments for potential national security risks. He highlighted the U.S. government’s decision to block Japanese company Nippon Steel from acquiring U.S. Steel, noting this as a potential loss given Nippon Steel’s strong management compared to that of U.S. Steel’s current struggles.
Under the second Trump administration, CFIUS has expanded its scope to restrict U.S. investments in critical technologies abroad, particularly in China. “Investment controls have evolved into a leverage tool,” Lowery explained, especially in high-tech sectors such as AI and quantum computing. Another
key tool in U.S. economic policy is export controls, originally created during the Cold War to limit Soviet access to critical technologies. Lowery noted that the U.S. has revived export controls, particularly targeting China’s access to advanced technologies like semiconductors and AI. However, he pointed out that while export controls may slow down foreign technological progress, they can also spur innovation in the countries they target. He discussed how Nvidia’s semiconductor chips’ once-assumed strategic importance in national security was recently challenged by the emergence of China’s DeepSeek AI, despite U.S. restrictions.
In conclusion, Lowery emphasized the importance of understanding economic leverage in a competitive world. Whether one favors the use of negative tools like tariffs and sanctions or supports positive economic cooperation, Lowery believes that knowledge of these issues will be essential for future leaders. Lowery hosts a podcast called “Current Account with Clay Lowery”. The podcast offers analysis of “current issues in international finance and economics” for those interested.
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