Domestic terrorist groups make strategic choices regarding how and when to deploy violent and non-violent tactics. This means when status-quo conditions in their conflict with the state change, domestic terrorist groups can react to the resulting new opportunities and risks. In this paper, we theorize that when a country’s economic conditions change, specifically the emergence or worsening of economic turmoil, domestic terrorist groups must make a strategic decision to decrease their domestic attacks (strategic conflict avoidance) to avoid opportunistic counterterrorism (CT), increase their domestic attacks (strategic conflict seeking) to leverage the government’s weakness and add to it’s struggles, or shift their violence from domestic to international attacks (strategic conflict transference) to continue demonstrating threat and capability while limiting opportunistic CT. The latter choice does risk an international CT response or international support for the domestic government that could be leveraged to buy support in the face of turmoil. We test these competing hypotheses on a cross-national sample from 2002-2020 using unemployment, inflation, exchange rate, and terrorism event data. Our results contribute to terrorism studies and conflict processes research by identifying specific causal mechanisms that underlie domestic terrorist groups’ strategic decision making.