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.
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 with 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.
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.
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.