Hit It with Your Best Shot

Economic pressure is economic statecraft that is conducted in an adversarial manner toward a target nation, either by the United States alone or in cooperation with other aligned nations. This report arrives at an economic pressure doctrine based on the analysis of 20 prior and ongoing cases of U.S. economic pressure, including legacy embargo cases (Chapter 1), modern sanctions cases (Chapter 2), technology denial cases (Chapter 3), and trade coercion cases (Chapter 4). Rather than attempting an exhaustive review, the cases were chosen to be a representative sampling of major instances of economic pressure deployed in the context of a state-to-state dispute, including a variety of economic pressure instruments, time periods, and effectiveness. Each case study is assessed on a set of 11 criteria commonly associated with the successful application of economic pressure, with key insights from a comparative analysis of each criterion across all 20 cases used as the building blocks for an economic pressure doctrine (Chapter 5). This iterative analytic approach builds to the articulation of a precise set of doctrinal principles for American economic pressure, set forth below and further explored in the conclusion of the paper.

Nine Principles of American Economic Pressure

Nine principles of American economic pressure emerged from the case study review. These principles can form the foundation of an American economic pressure doctrine.

Strategic Principles: Theories of Victory, Failure, and Restraint

At the strategic level, policymakers should set forth three theories: a theory of victory that articulates how economic pressure may aggregate into political effect, a theory of failure that determines when an economic pressure campaign has failed, and a theory of restraint that sets limits on the use of economic pressure for strategic, practical, or moral reasons. The three theories are conceptualized to work in tandem, with each on equal footing. Each, and all three together, must be continually assessed throughout the course of an economic pressure effort.

Principle 1

A theory of victory sets a clearly defined foreign policy or national security goal, articulates the role that economic pressure can play in achieving that goal, and establishes conditions to determine when the foreign policy or national security goal and the economic pressure goal have been achieved.

Economic pressure is not a strategy. It is deployed in service of a clearly articulated foreign policy or national security goal, with a clear sense of how it fits with other instruments of national power and with defined conditions for success. The guiding question in determining the theory of victory is how economic pressure may aggregate into political effect.

Principle 2

A theory of failure sets conditions under which an economic pressure campaign will be deemed to be failing to meet its objectives.

Economic pressure can fail. Conditions are set in advance to determine when an economic pressure campaign has failed to meet its objectives or when it has failed to translate into political effect and the achievement of the broader foreign policy or national security goal it is designed to support.

Principle 3

A theory of restraint sets limits to determine what the United States should not do as part of its economic pressure campaign.

Restraint on the use of economic pressure may be warranted for strategic, practical, or moral reasons. This includes the potential for systemic effects on the future ability to leverage economic pressure, as well as restraint justified for the purpose of maintaining the strategic value of America’s alliance structures. A theory of restraint assesses how restraint will impact the amount of economic pressure that can be brought to bear in service of the stated foreign policy or national security goal.

Operational Principles: Building Economic Pressure

At the operational level, policymakers should design economic pressure campaigns based on a holistic assessment of the economic leverage that the United States possesses relative to the target, accounting for each’s position in the global economy and for the target’s likely adaptation.

Principle 4

Structural leverage is the center of gravity for economic pressure.

The ability to apply economic pressure effectively relies on the overall balance of coercive leverage between the United States and its target, including each’s relative position in the global economy. Individual chokepoints are less important than a holistic assessment of relative economic power and leverage.

Principle 5

Allies and adversaries are equally important for building economic pressure.

Effectively building economic pressure requires broad control over the economic activity that the United States seeks to deny the target, regardless of whether the other countries that share this control are U.S. allies or U.S. adversaries. A failure to account for the sanctions spoiler role that any country, whether ally or adversary, may play will undermine the ability to apply economic pressure.

Principle Six

Target adaptation is inevitable and strategically consequential.

Targets of economic pressure should be expected to evade and otherwise adapt to economic pressure. At scale, this adaptation can have negative and systemic effects on the ability of the United States to deploy economic pressure successfully now and in the future.

Principle Seven

Economic pressure is designed and executed as a campaign.

Economic pressure is iterative and dynamic. An economic pressure campaign defines a desired economic and political end state and continuously calibrates the application of economic pressure in response to changes in target behavior, market conditions, and geopolitical conditions to remain on a trajectory to that end state.

Principle Eight

Economic pressure is calibrated to be productive rather than counterproductive.

Economic pressure is applied with enough force to achieve political effect but is calibrated to avoid becoming counterproductive through hardening the resolve of the target, leading to negative systemic effects, or causing serious civilian harm.

Principle Nine

Economic pressure requires substantial government resources, efficient administration, and bureaucratic structures that facilitate integrated planning efforts.

It is a myth that sanctions or other forms of economic pressure are costless for the United States. Effective economic pressure requires a substantial government investment of resources and political capital, both domestically and for U.S. partners aligned with U.S. economic pressure goals.

Next Steps

An economic pressure doctrine is not effective if it is just words on paper. U.S. policymakers must commit to the idea of a doctrine that truly shapes and disciplines the wielding of U.S. economic pressure. Specific actions that U.S. policymakers could take to implement an economic pressure doctrine include:

• Develop an economic pressure strategy that outlines how they intend to use economic pressure in furtherance of U.S. foreign policy and national security goals.
• Align legislation and appropriations with economic pressure doctrine so that economic pressure operations have a doctrinally based legal framework and sufficient resources for robust implementation.
• Mandate annual reviews of economic pressure campaigns to assess their status relative to the three strategic principles regarding theories of victory, failure, and restraint and to enable adjustments (including removal of economic pressure) where warranted.
• Strengthen strategic planning for economic pressure to enable long-term, deliberative efforts to build economic pressure operations, including allowing time to address structural economic constraints that may impede the ability to build economic pressure.
• Expand economic pressure doctrine to go beyond the high-level principles outlined in this report and develop detailed doctrine at the operational and tactical levels for major areas of economic pressure.

America’s ability to persuasively leverage its economic power is at an important inflection point. Years of accumulating economic pressure campaigns, development of adversarial adaptation capabilities, and ongoing shifts in the geopolitical environment mean that building economic pressure is harder than ever. At the same time, the goals of American economic pressure are becoming more expansive, including the controversial use of trade coercion targeted at U.S. allies. Doctrine can guide the future use of economic pressure with the goal of ensuring that the deployment of economic pressure is in America’s long term strategic interests.