America’s New Way of Economic War
In a marked evolution of U.S. economic statecraft, the United States has begun pairing traditional financial sanctions and export controls with direct physical enforcement at sea. This hybrid approach—highlighted in a timely analysis by Peter E. Harrell in Foreign Affairs—signals a shift from purely economic pressure to one that incorporates naval and coast guard interdiction to restore effectiveness against sanctions evasion.
From Sanctions to Hybrid Enforcement
For decades, the U.S. has wielded powerful tools of economic coercion: secondary sanctions that leverage the dominance of the U.S. dollar and global financial system, and stringent export controls, particularly on advanced technologies like semiconductors. These measures have targeted adversaries such as Iran, Russia, Venezuela, and increasingly China, aiming to constrain their military capabilities, revenue streams, and technological ambitions without resorting to direct military conflict.
However, persistent evasion tactics have eroded their impact. Adversaries have developed “shadow fleets” of tankers, alternative payment systems, and routes facilitated by third countries, including China. Sanctions fatigue has set in after years of expansive use across multiple administrations. In response, the Trump administration has escalated by authorizing naval and Coast Guard actions to physically intercept vessels violating sanctions.
A pivotal example came in late 2025 when President Trump declared a “total and complete blockade” of sanctioned oil tankers entering or leaving Venezuela. The U.S. Navy and Coast Guard have since seized or detained at least ten tankers linked to Venezuelan oil operations, often citing connections to designated terrorist entities like Iran’s Islamic Revolutionary Guard Corps. Similar threats of tariffs backed by maritime interdictions have targeted oil shipments to Cuba. U.S. allies have echoed the approach: India has seized Iranian tankers, and France has detained Russian vessels.
This represents a fundamental change. Traditional sanctions freeze assets or deter transactions through financial penalties. The new hybrid model ensures that sanctioned goods—especially oil—cannot reach markets if vessels are physically prevented from sailing. As Harrell notes, adversaries “can’t sell oil to China if the tankers can’t get there.”
Drivers of the Shift
Several factors explain this evolution. First, the diminishing returns of standalone sanctions. Russia has rerouted energy exports despite sweeping measures following its invasion of Ukraine. Iran and Venezuela have adapted through complex evasion networks. China has expanded yuan-based trade and acted as a facilitator for sanctioned parties.
Second, great-power competition with China has intensified focus on “chokepoints” in critical technologies and supply chains. Export controls on chips and related equipment aim to slow Beijing’s military modernization and AI development, often described as a “small yard, high fence” strategy—though the fence has sometimes expanded.
Third, the administration views reinforced enforcement as essential to “maximum pressure” campaigns against regimes in Venezuela, Iran, and elsewhere, linking economic tools to broader national security goals, including counter-narcotics and counterterrorism designations.
Risks and the Absence of Doctrine
While this approach may enhance short-term leverage, Harrell warns of significant dangers stemming from the lack of a clear, consistent doctrine. Questions abound: When does financial pressure justify military interdiction? What legal authorities—such as terrorism designations or laws of war—will govern future seizures? How will the U.S. respond if adversaries or even allies mirror these tactics by targeting American or partner assets?
Potential downsides include escalation risks. Physical seizures blur the line between economic coercion and armed conflict, inviting retaliation that could range from cyber operations to maritime confrontations. Overreliance on force may accelerate global trends toward de-dollarization, parallel financial systems, and supply-chain decoupling as countries seek resilience against U.S. extraterritorial reach.
Humanitarian and alliance strains represent another concern. Broad enforcement can raise energy prices, harm third-country economies, and provoke accusations of overreach or “economic piracy.” Legal challenges in U.S. courts over vessel seizures could test the boundaries of executive power.
Moreover, history shows that sanctions alone rarely compel major policy reversals from determined adversaries. Russia has not withdrawn from Ukraine, and Iran’s nuclear activities have persisted despite pressure. Adding naval enforcement may raise costs for targets but does not guarantee compliance and could entangle the U.S. in prolonged maritime policing operations.
Broader Implications for Global Order
America’s new way of economic war reflects a pragmatic recognition of limits in traditional power projection amid nuclear deterrence and great-power rivalry. It treats the global economy as a contested domain where interdependence becomes a vector for influence. Yet it risks fragmenting the very international economic system the U.S. once championed, pushing toward regional blocs, friend-shoring, and heightened autarky.
Success will hinge on several factors: maintaining multilateral support where possible, ensuring proportionality and clear rules of engagement, and pairing enforcement with domestic economic resilience measures such as industrial policy and supply-chain diversification. For adversaries, the strategy is likely to spur further innovation in evasion technologies and alternative networks.
As Harrell argues, without a coherent doctrine to guide when and how economic tools escalate to physical force, the United States risks strategic drift, unintended consequences, and erosion of its long-term advantages. In an era of intensifying competition, economic warfare is becoming the primary mode of state rivalry—demanding careful calibration to avoid crossing into more dangerous territory.
This hybrid model is still unfolding, shaped by ongoing developments in Venezuela, Iran, Russia-China ties, and responses from the international community. Its ultimate effectiveness and sustainability remain open questions, but it undoubtedly marks a new chapter in how America projects power through economic means.
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