Dodge or Defend: Third-Party Responses to Economic Warfare

• In Event: Economic Statecraft and War

Abstract

Economic sanctions have long been amongst Western policymakers preferred tools to influence other states. As the Western sanctions campaign against Russia and discussions of using economic tools to respond to potential Chinese aggression against Taiwan demonstrate, policymakers see economic sanctions as complements to, as well as substitutes for, armed action. Strong economic sanctions have effects beyond the target. Third-party states with strong economic ties to the target can also suffer significantly. How do states that suffer such economic “collateral damage” respond? Twice, in 1812 and 1917, the United States went to war, in part, because of collateral damage from economic warfare campaigns targeting other states. How common is this response? Using historical case studies, this paper develops a typology of third-party state strategies for responding to economic warfare and seeks to explain what causes choices between those strategies.

Author

• Erik Sand, Naval War College