Eddie Fishman, a senior research scholar at the Center on Global Energy Policy and adjunct professor at Columbia University, discusses the rise of economic warfare. He explores how recent U.S. tariffs and sanctions against countries like China and Russia have reshaped global relations. The conversation also touches on the evolution of economic strategies from the War on Terror to today's geopolitical tensions, the impact of the shale revolution on oil markets, and the potential decline of the U.S. dollar amid emerging currency systems.
The rise of economic warfare reflects a shift from global integration to using sanctions and tariffs as geopolitical tools.
Historic actions, such as tariffs imposed by the Trump administration, highlight the increasing use of coercive economic measures with potential isolation effects.
The concept of choke points in supply chains illustrates how specific sectors can leverage significant influence in the context of economic security.
Deep dives
Economic Warfare Dynamics
The emergence of economic warfare as a critical component of international relations showcases the increasing trend of using sanctions and tariffs as tools for geopolitical leverage. Historical context highlights that this evolution can be traced back to events such as the Iraq War and the less predominant military interventions, which led to escalating sanctions against adversaries. The U.S. has employed numerous tactics, from oil price caps to sanctions against nations like Iran and Russia, signifying a shift in how countries interact in a competitive global economy. Moreover, current dynamics suggest that continued use of coercive economic measures without clear diplomatic objectives may lead to greater isolation for the U.S.
Trump's Tariff Strategy
The recent use of tariffs by the Trump administration against traditional allies like Canada and Mexico marks a significant escalation in economic tactics, drawing concerns over potential isolations. Trump's perspective positions tariffs as both a tool for coercion and a means to address trade deficits, reflecting a dual purpose that complicates the international trade landscape. The distinction between leveraging tariffs for negotiation and imposing them as a permanent fixture raises questions about the implications for global economic relationships. The potential for long-term estrangement from key allies emerges if such aggressive strategies persist without clearly articulated goals.
Secondary Sanctions and Global Implications
The discussion surrounding secondary sanctions reveals the complex nature of modern economic warfare where U.S. policies affect global financial systems. This strategy emphasizes the dominance of the U.S. financial system, leveraging the threat of secondary sanctions to isolate targeted countries economically. Such actions not only impact the nations directly targeted but also affect allied nations and multinational corporations that engage with them. The risk of over-application of these sanctions unilaterally could lead to unintended consequences, including diminished cooperation from allies and an increase in parallel financial systems that could undermine U.S. influence.
Emerging Choke Points in the Global Economy
Choke points in the global economy illustrate how specific sectors and services hold significant leverage in critical supply chains. As countries seek to reinforce their economic security, the concept of choke points reflects vulnerabilities that can be exploited through targeted sanctions or tariffs. Historical examples, such as the use of sanctions to constrain Iranian oil, draw attention to the evolving landscape where financial and material monopolies become focal points. However, as global dependencies shift, particularly among major economies like China, there is a pressing need for the U.S. to innovate and fortify its own strategic positions in these critical supply chains.
Long-term Outlook of Economic Tools
The future of economic warfare is ambiguous, hinging on how countries navigate their interdependencies and emerging power dynamics. The ongoing rivalry, particularly with China, signals a potential bifurcation of global economic relations. A defensive strategy that diversifies supply chains and mitigates vulnerabilities comprising national interests is necessary, particularly in sectors like technology and clean energy. The fear of reverting to autarky or engaging in more aggressive tactics due to perceived threats underscores the importance of strategic foresight in shaping a resilient global economic landscape.
At the start of February, President Trump launched a trade war.
The president announced sweeping tariffs on goods imported from China, Canada, and Mexico. Although he temporarily backed away from the highest penalties, Trump clearly indicated that tariffs will be central to his policy agenda. This follows the Biden administration’s embrace of steep tariffs on electric vehicle imports from China, and sanctions against Russia aimed at stifling its energy sector.
These economic chokepoints are part of a broader shift of the global economy. Countries are weaponizing economic power through sanctions, tariffs, and export controls — reflecting a shift away from decades of global economic integration.
So how did we get here? What does this new age of economic warfare mean for global stability and the global economy? And how might these tools reshape everything from energy markets to global banking systems in the years ahead?
This week, Jason Bordoff talks to Eddie Fishman about his upcoming book "Chokepoints: American Power in the Age of Economic Warfare," which comes out on February 25th. The book traces the evolution of economic warfare from the “War on Terror” to today's great power competition.
Eddie is a senior research scholar at the Center on Global Energy Policy and an adjunct professor at Columbia University. He also serves as an adjunct senior fellow at the Center for a New American Security and a nonresident senior fellow at the Atlantic Council.
Credits: Hosted by Jason Bordoff and Bill Loveless. Produced by Erin Hardick, Mary Catherine O’Connor, Caroline Pitman, and Kyu Lee. Engineering by Sean Marquand. Stephen Lacey is executive producer.
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