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 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. 

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

Sep 17, 2021

Global Sanctions Dashboard: Summer Edition

By Julia Friedlander, Michael Albanese and Castellum.AI

The Global Sanctions Dashboard aims to inform economic statecraft policies by analyzing sanctions globally and identifying trends across lists in partnership with Castellum.AI.

Afghanistan Belarus

New Atlanticist

Sep 9, 2021

Sanctions alone won’t tame the Taliban

By Brian O’Toole

The United States and its allies will need to wield both existing and new sanctions as strategically as possible, but changing the regime's behavior will be difficult.

Afghanistan Economic Sanctions

New Atlanticist

Aug 23, 2021

They aren’t listed, but make no mistake: The UN has sanctions on the Taliban

By Brian O’Toole

As the militant group settles in to rule Afghanistan again, sanctions remain one of the only viable points of leverage for the international community. Here's what the UN's own rules say.

Afghanistan Economic Sanctions

New Atlanticist

Aug 10, 2021

Biden’s empty posts are a national security problem

By Brian O’Toole

The administration’s inaction on filling positions at the State and Treasury departments translates into real-world problems on everything from energy to rogue regimes to the US financial system.

Economic Sanctions National Security

EconoGraphics

Jun 29, 2021

Global Sanctions Dashboard: 5th Edition

By Julia Friedlander, Michael Albanese and Castellum.AI

The Global Sanctions Dashboard aims to inform economic statecraft policies by analyzing sanctions globally and identifying trends across lists in partnership with Castellum.AI.

Belarus China

Blog Post

Jun 28, 2021

China’s anti-foreign sanctions law: Companies in the crosshairs

By Hung Tran

On June 10, 2021, China’s National People’s Congress passed the Anti-Foreign Sanctions Law. This has raised the complexity and risk of doing business globally, especially as sanctions and counter-sanctions are likely to proliferate in the intensifying US-China strategic competition.

China Economic Sanctions

Blog Post

Jun 8, 2021

The growing global alignment in regulating Chinese trade and investment

By John Kabealo

The rapid revisions to US FDI and trade policy and the fast momentum the United States has helped to create in its diplomatic efforts reflect a near uniform consensus in the United States, and a growing consensus among our allies, that cross-border trade and investment are squarely issues of national security. Traditional US transatlantic allies appear to be serving US interests, and other countries with complex relations with China are adopting FDI screening processes that mimic CFIUS. The numerous efforts to revise statutory and regulatory regimes are an unmistakable signal that the view of China as a rival, and indeed a threat, to the established global order, is both widespread and likely to endure.

China Defense Technologies

EconoGraphics

May 14, 2021

Global Sanctions Dashboard: April

By Julia Friedlander, Michael Albanese and Castellum.AI

The Global Sanctions Dashboard aims to inform economic statecraft policies by analyzing sanctions globally and identifying trends across lists in partnership with Castellum.AI.

Economic Sanctions European Union

Blog Post

Apr 19, 2021

An EAR-evolution? What Commerce’s military intelligence end-user rule may foretell

By Annie Froehlich

Export controls have become an increasingly prominent tool in the US' foreign policy. However, a new rule that restricts the activities of US persons may foretell a shift in tactics.

Arms Control China

EconoGraphics

Apr 14, 2021

Global Sanctions Dashboard: March

By Julia Friedlander, Michael Albanese and Castellum.AI

The Global Sanctions Dashboard aims to inform economic statecraft policies by analyzing sanctions globally and identifying trends across lists in partnership with Castellum.AI.

China Economic Sanctions