War on the Rocks

This article is the first in an 11-part series examining how the United States should organize, lead, and integrate economic statecraft into strategy, defense practice, and the broader national security ecosystem. This special series is brought to you by the Potomac Institute for Policy Studies and War on the Rocks. Prior installments can be found at the War by Other Ledgers page. 

The United States loses upwards of $225-$600 billion each year to stolen trade secrets, pirated software, and counterfeit goods, mostly through activities orchestrated by China’s government.

Right now, the two countries are locked in a struggle that looks nothing like the wars of the past. The stakes are existential with prosperity and national security on the line, not to mention global influence. This is an economic war, and it’s being fought according to principles that date back more than two millennia.

Economics is no longer just a lever of national power — it is an operational domain of warfare and economic statecraft provides an effective means to operate in that domain. Defined broadly, economic statecraft is the use of economic tools — trade policy, investment controls, and sanctions — to achieve strategic objectives.

The United States and China are engaged in a protracted economic conflict, and America’s approach to dealing with it is evolving. The Chinese Communist Party’s primary goal to stay in power drives its wielding of economic tools to sink U.S. industries and gain market advantages — a reality American policymakers are actively grappling with. Military commanders and national security professionals should understand the dynamics of economics if they expect to gain advantage, deter, and win, if necessary, on the modern battlefield.

Read the full article at War on the Rocks.

Tim Welter, Ph.D., is a senior research fellow at the Potomac Institute for Policy Studies where he started and leads the Global Competition Project. Leveraging experience from Capitol Hill, the Pentagon, industry, and academia, his research is primarily focused on national security policy development and implementation, and economic statecraft.

Margaret McWeeney, Ph.D., is a research analyst at the Potomac Institute for Policy Studies and International Center for Terrorism Studies. Her research focuses on hybrid warfare and nonstate actor security threats.