What is Economic Statecraft?

Economic statecraft is the use of financial, regulatory, and economic tools to achieve foreign policy objectives. In the 21st century, many countries have proven less likely to use military force and instead rely on financial measures such as sanctions to influence other actors’ behavior. This trend deviates from traditional military and diplomatic ways of conducting foreign policy and marks an era where regulation and its implementation take center stage. 

Financial and economic measures may seem less costly than military engagement but can still create inefficiencies in the global economy and threaten economic growth. The key challenge is to design effective policies that minimize fallout for ourselves and our partners, and do not invite asymmetric retaliation.

The Economic Statecraft Initiative at the Atlantic Council will address this challenge – by acting as a convener for policymakers and private sector representatives, conducting in-depth research and analysis at the intersection of economics and foreign policy, and leveraging deep industry expertise. 

Programmatic structure

Sanctions and illicit finance: Our goal is to clarify the role sanctions can (and cannot) play in advancing policy objectives, harness the power of our allies, and promote options that minimize consequences for the private sector. On the illicit finance side, the health and soundness of our financial infrastructure can be as important as military deterrence, and that protecting our financial system from abuse by illicit financial actors goes hand in hand with prudential supervision.

Transatlantic trade and regulation: Our program will check assumptions that transatlantic trade “should be easy” when two equal sized market powers with two equally viable regulatory frameworks stand their ground. We will also analyze the potential reshoring of foreign direct investment in light of COVID and attempts on both sides of the Atlantic to secure supply chains and also bolster domestic competitiveness in research and development, technology, and high-end manufacturing.

Tariffs, investment screening, and export controls: By bringing together stakeholders from economic, regulatory, military, foreign policy, and business communities, we will take an objective look at how restrictions on the movement of capital have emerged as a national security tool. By surveying D10 governments, private sector participants, business associations and academia, we will drive consensus among allies on what sectors of our economies deserve government interference, and which do not. 

Featured work

China Economic Spotlight

China Economic Spotlight provides deep insight and analysis into the China policy – how the US and its partners are tackling critical issues ranging from markets and statecraft to technology and manufacturing.

Global Sanctions Dashboard

The Global Sanctions Dashboard provides a global overview of various sanctions regimes and lists. Each month you will find an update on the most recent listings and delistings and insights into the motivations behind them. This is the only sanctions resource where global sanctions list data are aggregated in one place.

Analysis and in-depth research

Report

Nov 30, 2021

Transatlantic tools: Harmonizing US and EU approaches to China

By Noah Barkin and Agatha Kratz

Cooperation between the US and the EU is essential if they are to develop effective responses to the challenges presented by China. However, there has been a lack of coordination in recent years. Nevertheless, this paper argues there is now an opportunity under the Biden Administration for the United States and Europe to learn from each other and harmonize some of their China-related efforts. 

China Economic Sanctions

Report

Nov 30, 2021

Economic statecraft: Finance and money

By Dr. Carla Norrlöf

Using economics to achieve non-economic foreign policy objectives has become a dominant strategy for great powers in the post 9/11 world. The economic statecraft kit now includes a wide range of practices such as financial sanctions, coercive policies and inducements to defensive policies.

Australia China

Upcoming events

Leadership

Experts

Content

EconoGraphics

Jun 30, 2022

Global Sanctions Dashboard: Russia default and China secondary sanctions

By Charles Lichfield, Maia Nikoladze and Castellum.AI

Russia's default on sovereign debt; EU oil ban; China secondary sanctions threat; Middle Eastern illicit networks

Africa China

In the News

Jun 24, 2022

Lichfield cited in La Stampa on the impact of sanctions on Russia’s economy

Read the full article here.

Economic Sanctions Economy & Business

In the News

Jun 16, 2022

Lipsky cited in Politico’s Global Insider on Russia’s economic contraction from sanctions vs. previous crises

Read the full article here.

Economic Sanctions Economy & Business

In the News

Jun 3, 2022

Lichfield interviewed on BBC’s The World Tonight on the already-evident impact of sanctions on Russia’s economy

Listen to the full interview here.

Economic Sanctions Economy & Business

In the News

Jun 3, 2022

O’Toole interviewed in Business Insider on Russian oligarch’s sources of wealth

Watch the full video here.

Economic Sanctions Economy & Business

In the News

Jun 3, 2022

Global Sanctions Dashboard cited in Politico’s Global Insider newsletter

Read the full newsletter here.

Economic Sanctions Economy & Business

In the News

May 17, 2022

Secretary Yellen’s remarks on the Bretton Woods institutions shaping international finance following WII from her special address featured in the Wall Street Journal

Read the full article here.

Economy & Business Financial Regulation

In the News

May 13, 2022

Mohseni-Cheraghlou interviewed by CBC News on Russia halting of gas exports to Poland and Bulgaria, and what it could mean for EU economies

Watch the full interview here.

Economic Sanctions Economy & Business

EconoGraphics

May 9, 2022

Global Sanctions Dashboard: Russia and beyond

By Charles Lichfield, Maia Nikoladze, Sophia Busch and Castellum.AI

Checking the pulse of the Russian economy; Africa’s illicit gold trade, North Korea’s missile tests, and recent cyber sanctions.

Africa Conflict

In the News

May 5, 2022

O’Toole quoted in S&P Global on the US imposing secondary sanctions to prevent Russia from selling oil elsewhere

Read the full article here.

Economic Sanctions Economy & Business