Biden’s Economic War Playbook: Out of His Depth?

A top White House official says the world needs to understand how and when the U.S. will weaponize its economic might in global conflict — and offered a sneak peek of what such a doctrine might look like if President Biden wins another term.

Why it matters: Global policymakers warn we may be in the most fragile era in decades, with persistent conflict among world superpowers. There is already evidence that these battles will be waged with economic tools that could spill out across the globe.

What they're saying: "Barring catastrophic miscalculation, direct confrontations are more likely to play out in the theater of economics and technology than direct military conflict," Daleep Singh, who recently returned to the White House for a second stint as deputy national security adviser for international economics, said Tuesday during a panel at the Brookings Institution.

• "If that is correct, we have a lot of work to do to communicate to the world the guiding principles that constrain our use of these tools, that give them more comfort that we're not going to fire these weapons in a way that is arbitrary or reflexive," Singh said.
• "It has taken hundreds of years to craft and refine a doctrine for the use of military force and it's still evolving today," Singh said. "We've just started the process of thinking about how to design a doctrine of economic statecraft."

The big picture: Singh, who led the New York Fed's markets group at the height of the pandemic, said the Biden administration needs a "code of conduct" for economic tools, like sanctions — including when to use them and how to avoid global spillover effects.

• Singh said the U.S. should have more balance in its economic statecraft, meaning offering countries tools that would have "mutual economic gain," like debt relief, infrastructure financing and trade agreements.
• If that is the case, it would debunk the narrative that the nation solely designs "tools of economic pain."
• "There a number of moonshots that, if we had a chance to keep working beyond November, we should consider," Singh said, including more frequently guaranteeing the debt of struggling, poorer nations.

• "It would feel good to have maximal economic shock-and-awe all the time, spillover effects and second-order consequences be damned," but it wouldn't be the best strategy, Singh said.

Reality check: Biden is trailing former President Trump in major national and swing state polls, and prediction markets now put higher odds on a Trump victory than on Biden's re-election.

What to watch: In Italy last week, Treasury Secretary Janet Yellen and G7 allies said there was "progress" in discussions about whether and how to use Russian assets stored away at financial institutions, including in the U.S., to help Ukraine.

• Singh, in a speech before the panel, said using these assets to plug Ukraine's financing gaps would "deliver an unambiguous signal that we will not fatigue."

This article originally appeared on Axios