Policy Brief No. 199 — March 2025
Canada at Economic War: The 360-Degree Threat Raquel Garbers
Key Points → Hostile states have undercut the power advantage that secured the United States and its allies by amassing coercive military and economic power. Economic warfare has been central to their success. → With deterrence failing, the United States is readying itself for the prospect of today’s economic war sliding into hot war between major powers. To secure itself, it will act unilaterally in defence of its own national interests, including at the expense of its allies/partners (see Box 1). → Insofar as Canada’s place in the emerging global order will depend in large measure on its ability to build strategic leverage and contribute power to the pushback against Russia and China, developing a Canadian Defence Industrial Strategy (CDIS) is an urgent national priority.
Introduction: Understanding the 360-Degree Threat The conduct of war has changed. In addition to contesting traditional military threats, the United States and its allies/partners must now also contend with incessant below-threshold attacks1 targeting their societies and economies. The hostile states are using all instruments of national power in these attacks — diplomatic, information, military and economic (DIME). Among other activities, their attacks include interfering in foreign elections to promote preferred policies and politicians (diplomatic); spreading propaganda to discredit critics (information); disguising military operations as civilian activities to gather intelligence and harass weaker states with physical force (military); and using economic tools to coerce foreign governments and to steal industrial/military secrets (economic). Hostile states are especially active in their economic attacks as they understand the symbiotic relationship between economic and military power: in today’s highly integrated global order, economic activities give them easy access to the technologies and industrial power
1
That is, attacks that are calibrated to fall below the threshold at which a targeted state would take effective action to defend itself.