Author Description

Economic statecraft, or leveraging economic power to achieve foreign policy and national security objectives, dates back to Greco-Roman times. Viewed as more than diplomacy, but short of military intervention, economic statecraft has become the West’s tool of first resort to address national security threats and change an adversary’s behavior. Sanctions are used to disrupt terrorist groups, transnational criminal organizations, and illegal traffickers as well as deny regimes access to the international financial system and restrict their ability to move funds. Economic statecraft has gained significant attention over the past year and a half as a result of the Group of Seven (G7) and broader coalition’s economic response to Russia’s invasion of Ukraine. G7 and coalition partners levied significant coordinated sanctions and export controls on Russia to freeze Russian assets, reduce their economic dependency on Russia, and degrade Russia’s ability to import military grade components needed to pursue its war. The economic statecraft landscape is becoming more complex as transatlantic partners increasingly leverage the tools to counter transnational threats. There is a growing need to understand how these tools are used, by whom, and when, as well as their intended and real impacts worldwide. This report offers the first step in developing a common operating picture on economic statecraft and how it is used in practice by transatlantic partners. The first half of the report focuses on coercive and positive tools of economic statecraft. The second half is organized around the effects and potential implications of export controls and financial sanctions.