The Four Types of Economic Coercion
And how they can inform the US-China Trade War
In a war or even a battle, many accept that there are multiple factors that affect the outcome. What are the fronts the battle is being fought on? How many soldiers does one side have? Even more fundamentally, what are the air, sea, ground, and increasingly cyber capabilities of the two (or more) sides of the conflict.
This is true in a trade war as well. There are multiple fronts. At any given time the United States is imposing tariffs or sanctions on multiple countries at a time. The number of imports, foreign direct investment, or foreign aid can impact how much economic pressure a country can exert on the country they are trying to impact. Finally, the capabilities are the four fundamental types of economic coercion.
Much like in a military conflict, in a trade conflict the advantage can be split between the parties engaging in the conflict. Each side will try to “fight” based on their advantage, and limit exposure to their weakness. For this reason, it is important to understand the four types of economic coercion.
There is nothing new here. Indeed, the levers of economic coercive potential are fairly well known and studied. The four types of economic coercion are laid out by Jonathan Kirshner in his book Currency and Coercion: The Political Economy of…
