Focus Area 05

Economic Statecraft

Markets are also instruments of power when access, capital, technology and supply are strategically controlled.

Why this matters

Why Strategic Horizon studies this field

Trade rules, sanctions, subsidies, procurement, investment screening and export controls can alter strategic behaviour without the use of military force. They also create second-order effects for companies, investors and supply chains that are often poorly captured by purely economic analysis.

Strategic Horizon studies how economic tools convert into leverage, resilience or unintended vulnerability.

Strategic Perspective

Our analytical position

Economic interdependence is neither automatically stabilising nor automatically dangerous. Its strategic effect depends on concentration, substitutability, switching costs, legal authority and the distribution of pain. We focus on where commercial optimisation collides with national resilience and where industrial policy changes the underlying capability balance.

What we examine

Analytical scope

  • Sanctions, export controls and trade restrictions
  • Industrial subsidies and strategic procurement
  • Foreign investment screening and strategic capital
  • Critical raw materials and supply-chain policy
  • Energy pricing, market design and competitiveness
  • State-backed manufacturing capacity and technology ecosystems
Key questions

Questions that structure our work

  • When does interdependence become strategic vulnerability?
  • Which policy tools create durable capability rather than temporary protection?
  • Who can impose economic costs while absorbing retaliation?
  • Where do sanctions or controls accelerate substitution?
  • How do firms adapt when efficiency and resilience point in different directions?
What we monitor

Signals and signposts

  • Sanctions packages, waivers and enforcement
  • Export-control scope and technology thresholds
  • Industrial-support programmes and realised capacity
  • FDI screening and strategic acquisitions
  • Supply-chain relocation and friend-shoring
  • Trade disputes, tariffs and market-access restrictions
Decision implications

What the analysis is for

Economic-statecraft exposure affects sourcing, investment, technology choice, market entry and capital structure. Our analysis identifies where policy can change commercial assumptions and where private decisions can create or reduce strategic dependency.

Related Strategic Horizon Research

Selected work from the Research Library