Economic Warfare
What it is. Steering choices through prices, access, and dependency instead of overt force. Tools include tariffs, export controls, strategic subsidies, supply-chain leverage, standards, and concessional finance. The aim is to shape incentives so targets choose what you want—even under stress.
Crisis Arbitrage
Domain: Economic Warfare · Stratagems: 5, 16, 24
Problem / betrayal. During shocks, rivals buy ports, minerals, and grids on the cheap.
How it happened. USTR’s Section 301 four-year review details tech-transfer coercion and cyber-enabled IP theft; tariff actions and updates track the response. United States Trade Representative.
The men behind it. State-linked firms, sovereign funds, “friendly” banks.
Consequences. Dependency by contract; policy leverage later.
Warning. If you sell the hinge, expect the door to swing.
Counter-Orders
- Audit: screen FDI at chokepoints; stress-test supply chains.
- Inoculate: golden-share rights; allied backstop buying.
- Isolate: align export controls with sectoral tariffs and §337 tools. United States Trade Representative.
Operating model
- Actors: states, SOEs, sovereign funds, regulators, standards bodies, keystone firms.
- Levers: market access, logistics chokepoints, commodity custody, financing terms, IP & standards.
- Mechanisms: create dependency → time the shock → extract concession → normalize the new baseline.
- Escalation ladder: price signals → licensing friction → targeted controls → systemic embargo.
- Success metrics: policy shifts secured, resilience gap widened, rival CAPEX diverted.
Tactic clusters (curated, non-repetitive)
1) Crisis Arbitrage
Exploit shocks to buy strategic assets and lock in long-term supply.
Stratagems: 5 Loot a Burning House, 24 Borrow the Road to Conquer Guo
Application: Acquire distressed logistics, ports, or mineral concessions during currency or debt crises; attach maintenance/finance terms that entrench influence.
Countermeasures: FDI screening, allied backstop buying, golden-share controls.
2) Dependency Design
Engineer reliance on your inputs or standards before changing the terms.
Stratagems: 1 Fool the Emperor to Cross the Sea, 16 To Catch Something, First Let It Go, 17 Toss Out a Brick to Attract Jade
Application: Offer generous licensing and subsidies to seed your tech stack; once embedded, shift to compliance and data-custody demands.
Countermeasures: Multi-vendor architectures, exit clauses, escrowed IP & interoperability mandates.
3) Indirect Coercion
Signal to small actors to discipline big ones—deterrence by example.
Stratagems: 26 Point at the Mulberry but Curse the Locust Tree, 10 Hide Your Dagger Behind a Smile
Application: Penalize a minor exporter over compliance to warn the entire sector; publicly keep tone cooperative to avoid coalition backlash.
Countermeasures: Collective defense funds, joint legal counsel, transparent compliance benchmarks.
4) Institutional Capture
Influence standards, boards, and gatekeepers to tilt the rules.
Stratagems: 25 Replace the Beams with Rotten Timbers, 30 Exchange the Role of Guest for that of Host
Application: Place aligned voices on standards committees; steer definitions that privilege your specifications and certifications.
Countermeasures: Open governance in SDOs, rotation rules, conflict-of-interest disclosures.
5) Chokepoint Management
Control or congest key nodes to reshape bargaining power.
Stratagems: 22 Shut the Door to Catch the Thief, 18 First Capture Their Leader
Application: License critical chemicals or EDA tools through a few firms; squeeze quietly via audits and quotas until policy concessions emerge.
Countermeasures: Stockpile buffers, on-shoring for single points of failure, shared licensing pools.
6) Narrative Hedging
Wrap coercion in cooperation so partners rationalize compliance.
Stratagems: 8 Repair the Walkway, March to Chencang, 14 Borrow a Corpse to Raise the Spirit
Application: Brand export controls as “safety” standards; cite prior international practices to frame restrictions as normal.
Countermeasures: Independent impact assessments, rival safety baselines, multilateral transparency.
Failure modes & risks
- Substitution: targets re-route via alternative suppliers and standards.
- Blowback: retaliation harms your own firms and innovation pipeline.
- Coalitions: overreach triggers balancing alliances and shared stockpiles.
Related: browse stratagem details by number on the site’s Stratagems section.