‘Economic Defense Unit’: How the U.S. Military Wins in the ‘Gray Zone’

Mackenzie Eaglen

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Seven F-35 Lightning II aircraft wait to take off for a U.S. Air Force Weapons School training mission at Nellis Air Force Base, Nevada, Jan. 31, 2024. The U.S. Air Force Weapons School teaches graduate-level instructor courses that provide advanced training in weapons and tactics employment to officers and enlisted specialists of the combat and mobility air forces. (U.S. Air Force photo by William R. Lewis)

Economic Defense Unit: An Idea Whose Time Has Come

It is the Department of Defense’s job to think about war. It is also the Pentagon’s job to think about war avoidance. Military leaders use terms such as “the gray zone” to describe a state of operations that sits somewhere between peace and war.

Uncle Sam defines gray zone activities as “coercive or subversive actions to achieve objectives at the expense of others in contravention or in the absence of international norms.” These nefarious actions are undertaken by adversaries to strike at U.S. interests while avoiding direct conflict. Methods can include lawfare, political warfare, information and disinformation operations, debt trap diplomacy, sanctions evasion, economic coercion, cyber and space challenges, and support for proxy forces.

Congress has been worried about gray zone activities and competition for years—especially economic coercion by China against states, entities, and companies. One example of economic coercion, cited by the Council on Foreign Relations, took place when South Korea accepted the U.S.-made Terminal High Altitude Area Defense (THAAD) antiballistic missile system after various North Korean ballistic missiles launches and nuclear weapons tests in 2016–17. With THAAD too close for comfort, Beijing retaliated by forcing a major South Korean department store chain, Lotte, “which had provided some land for THAAD, to sell its stores in China for a fraction of its investment.”

Another example of China’s deeply damaging retaliation occurred after Lithuania allowed the Taiwanese representative office in Vilnius to call itself Taiwan, rather than Chinese Taipei, in 2021. According to CFR, Beijing “stranded shipments of Lithuanian goods to China and then publicly pressured global multinationals not to do business with Lithuania.” The result was an 80 percent drop in Lithuanian exports to China that year.