North Korea’s growing use of offensive cyber capabilities to target the international financial system, China’s assertive efforts to undercut US interests in East Asia using its economic clout, and Iran’s continued attempts to undermine Middle East stability and corrupt the international financial system are just a few of the challenges the Trump administration and Congress must address to protect America’s economic national security.

These and others are included in a report issued today by the Foundation for Defense of Democracies’ (FDD) Center on Sanctions and Illicit Finance (CSIF).

The report, “Securing American Interests: A New Era of Economic Power,” describes how economic tools play an increasingly important role in US national security, and details how the United States can sharpen those tools to protect its interests at home and abroad.

“President Trump has powerful tools of economic statecraft at his disposal, yet he will also face a challenging environment where state and non-state adversaries are also learning to more effectively use those levers,” said Juan C. Zarate, former Deputy Assistant to the President and Deputy National Security Advisor for Combating Terrorism and current CSIF Chairman. “This report provides the administration and lawmakers with an overview of the national economic security issues we face, as well as recommendations for how we can better prepare to compete successfully in this complicated and evolving space.”

Drawing from their extensive expertise in economic statecraft, coercive diplomacy, international banking and financial integrity, positive economic power, and a deep knowledge of the United States government, CSIF’s experts identify in the report key threats and opportunities, and they recommend strategic and structural changes to prepare the United States for economic national security battles that could be just around the corner.

Lead author Eric B. Lorber, a CSIF senior advisor, details how, the United States in recent years has at its disposal an ever broadening set of economic tools to achieve its foreign policy objectives. This, of course, includes punitive measures like sanctions, but also includes positive economic power, including strategically deployed aid.

“The release of this report could not come at a more important time,” Lorber said. “New technologies and novel means of financial influence are enabling our adversaries to threaten US national economic security. China, Iran, North Korea, Russia and the Islamic State are among the key adversaries with which the United States must contend.”

CSIF’s experts detail five areas critical to US national economic security:

Sharpening US tools of economic coercion to achieve foreign policy goals,
Defensive economic approaches to protect America’s US economic national security,
Positive economic power to encourage financial transparency and economic growth,
Ensuring the integrity of the global financial system, and
The strategic and structural changes necessary to ensure US national economic security.

The CSIF report offers concrete policy recommendations for strengthening US economic security, including developing a National Economic Security Strategy, establishing an Office of Policy Planning within the United States Department of the Treasury, and creating an Economic Sanctions Advisory Board to ensure better coordination with the private sector.

“Until now, policy prescriptions have focused on specific components of national economic security,” said Mark Dubowitz, FDD CEO and CSIF director, “but none has fully explained how the disparate elements of US national security can be brought together to protect our vital interests. This report aims to fill that crucial void.”