In this essay I address the question of whether economic instruments such as tariffs, embargoes, quotas, capital controls, financial sanctions, or asset freezes can achieve national security goals—economic, political, or military—and thereby help avoid international conflict, or even preclude war. The connection between economics and national security is an ancient issue about which people have debated for a long time. Thucydides wrote about the Athenians sending out ships to collect money to finance battles, but the very act of collecting money under force could be counterproductive and lead to war.
“Fluff.” That’s what Derek Scissors called the “very substantial phase one deal” President Trump announced on October 11, as Chinese trade negotiators, also in the Oval Office, looked on. Why would the leader of the world’s largest economy agree to an insubstantial arrangement? Scissors, a scholar at the American Enterprise Institute, gave this explanation to the Washington Post: “because no one in the administration really wants to go through with the tariffs anyway.”
Economic embargoes and targeted sanctions have a long but mixed legacy as tools of statecraft. The first major American attempt to employ sanctions dates back as far as the Embargo Act of 1807, which intended to punish Great Britain and France for interfering with American shipping during the Napoleonic phase of the wars of the French Revolution. Economic sanctions have become increasingly popular as a way of achieving a variety of goals—deterrence, coercion, the protection of human rights, raising the cost of aggression, bolstering allies, virtue-signaling or choosing the least bad means for addressing an international threat when the alternatives of doing nothing or resorting to force appear worse. The United States now employs sanctions of varying comprehensiveness and severity against more than thirty countries and terrorist entities, including Russia, Syria, Iran, Cuba, and North Korea.