ASIA
08 September 2025
Age of economic warfare challenges US power
We have left behind the hyperglobalisation of the 1990s, and since 2006 moved into the age of economic warfare
We have left behind the hyperglobalisation of the 1990s, and since 2006 moved into the age of economic warfare, according to Edward Fishman in his book Chokepoints: American Power in the Age of Economic Warfare. After working on economic warfare issues at the US departments of State, Defence and Treasury, Fishman is currently based at Columbia University.
Economic warfare refers to the use of economic instruments such as sanctions, export controls or tariffs against foreign governments, companies or people, rather than employing military power. It has become an important way in which great powers including the United States and China compete with one another today.
Countries often conduct economic warfare by exploiting what Fishman calls ‘chokepoints’. One such chokepoint in ancient Greece was the Bosphorus canal, which could be easily blocked to restrict trade between the Black Sea and the Mediterranean. In the modern world, access to the dollar, finance and technology can act as ‘novel chokepoints’.
Fishman argues that under the presidency of Barack Obama, Iran was pushed into negotiating a nuclear deal by restrictions on use of the dollar, the currency of oil trade. However, during his first presidency, Donald Trump withdrew the US from this deal.
The West’s response to Russia’s occupation of Crimea in 2014 was complicated because Russia was a more important player in world energy markets, and Europe was highly dependent on Russian energy. The result was less ambitious sanctions which only confirmed President Putin’s belief of weakness of the West.
Following Russia’s invasion of Ukraine, the West devised complex sanctions, while at the same time minimising the risk of increasing US energy prices. However, the effect of those sanctions was mitigated by purchases of Russian energy by China, India and Turkey, along with other assistance. Economic warfare against China has been implemented to maintain US technological leadership by restricting Chinese access to US technology, including some produced outside the US. A particular concern was that the 5G technology of Huawei could create a a chokepoint that China could grip.
Fishman sees the rise in economic warfare since 2006 as being motivated by three factors. First, the hyperglobalisation of the 1990s saw dramatic increase in international trade and finance, the integration of emerging economies—notably China and Russia—into the global economy, and growing use of semiconductors in everything from cars to computers. This enabled the US to weaponise use of the dollar (the currency of international trade), access to its financial system, and purchase of semiconductors, for which the US controls much of the intellectual property.
Eroding support for deploying military power following wars in Afghanistan and Iraq has also made economic warfare appealing. The final driver is the return of great power competition with China and Russia, as hopes for their democratisation and adherence to the US-led world order faded from view. These countries’ possession of nuclear weapons also acts as a deterrent to kinetic warfare and enhances the attractiveness of economic warfare.
Fishman argues that chokepoints can lose their potency over time. China has been encouraging the use of the yuan to reduce its dependence on the dollar, although this is limited by its lack of convertibility. And restricted access to semiconductors has only spurred innovation in China.
While the US may have led the world in economic warfare, China is in a strong position to implement export controls on minerals for which it dominates production and refining. Indeed, in response to Trump’s tariffs this year, China restricted exports of minerals including gallium, germanium, antimony and tungsten, which are crucial for various high-tech industries such as semiconductors.
Fishman theorises that governments now must deal with an ‘impossible trinity’ where they can enjoy only two of three factors—economic interdependence, economic security and geopolitical competition—at the same time. The Cold War era was characterised by geopolitical competition and economic security but no economic interdependence.
During the hyperglobalisation period, the US could enjoy both interdependence and economic security, because China and Russia seemed to be budding friends. But with the return of geopolitical competition, economic security can be threatened by interdependence. The Covid-19 pandemic highlighted the costs of overreliance on China for medical and pharmaceutical products. But repatriating manufacturing to the US will often not be the solution. Fishman favours strengthening supply chains with close allies, known as ‘friendshoring’.
Fishman sees little likelihood of a return to the days of hyperglobalisation, as great power competition persists. One scenario is of the world economy splitting into two blocs, led by the US and China. Another disturbing and plausible scenario is the world descending into autarky as business reverts to investing at home in response to Trump’s tariffs.
Economic warfare refers to the use of economic instruments such as sanctions, export controls or tariffs against foreign governments, companies or people, rather than employing military power. It has become an important way in which great powers including the United States and China compete with one another today.
Countries often conduct economic warfare by exploiting what Fishman calls ‘chokepoints’. One such chokepoint in ancient Greece was the Bosphorus canal, which could be easily blocked to restrict trade between the Black Sea and the Mediterranean. In the modern world, access to the dollar, finance and technology can act as ‘novel chokepoints’.
Fishman argues that under the presidency of Barack Obama, Iran was pushed into negotiating a nuclear deal by restrictions on use of the dollar, the currency of oil trade. However, during his first presidency, Donald Trump withdrew the US from this deal.
The West’s response to Russia’s occupation of Crimea in 2014 was complicated because Russia was a more important player in world energy markets, and Europe was highly dependent on Russian energy. The result was less ambitious sanctions which only confirmed President Putin’s belief of weakness of the West.
Following Russia’s invasion of Ukraine, the West devised complex sanctions, while at the same time minimising the risk of increasing US energy prices. However, the effect of those sanctions was mitigated by purchases of Russian energy by China, India and Turkey, along with other assistance. Economic warfare against China has been implemented to maintain US technological leadership by restricting Chinese access to US technology, including some produced outside the US. A particular concern was that the 5G technology of Huawei could create a a chokepoint that China could grip.
Fishman sees the rise in economic warfare since 2006 as being motivated by three factors. First, the hyperglobalisation of the 1990s saw dramatic increase in international trade and finance, the integration of emerging economies—notably China and Russia—into the global economy, and growing use of semiconductors in everything from cars to computers. This enabled the US to weaponise use of the dollar (the currency of international trade), access to its financial system, and purchase of semiconductors, for which the US controls much of the intellectual property.
Eroding support for deploying military power following wars in Afghanistan and Iraq has also made economic warfare appealing. The final driver is the return of great power competition with China and Russia, as hopes for their democratisation and adherence to the US-led world order faded from view. These countries’ possession of nuclear weapons also acts as a deterrent to kinetic warfare and enhances the attractiveness of economic warfare.
Fishman argues that chokepoints can lose their potency over time. China has been encouraging the use of the yuan to reduce its dependence on the dollar, although this is limited by its lack of convertibility. And restricted access to semiconductors has only spurred innovation in China.
While the US may have led the world in economic warfare, China is in a strong position to implement export controls on minerals for which it dominates production and refining. Indeed, in response to Trump’s tariffs this year, China restricted exports of minerals including gallium, germanium, antimony and tungsten, which are crucial for various high-tech industries such as semiconductors.
Fishman theorises that governments now must deal with an ‘impossible trinity’ where they can enjoy only two of three factors—economic interdependence, economic security and geopolitical competition—at the same time. The Cold War era was characterised by geopolitical competition and economic security but no economic interdependence.
During the hyperglobalisation period, the US could enjoy both interdependence and economic security, because China and Russia seemed to be budding friends. But with the return of geopolitical competition, economic security can be threatened by interdependence. The Covid-19 pandemic highlighted the costs of overreliance on China for medical and pharmaceutical products. But repatriating manufacturing to the US will often not be the solution. Fishman favours strengthening supply chains with close allies, known as ‘friendshoring’.
Fishman sees little likelihood of a return to the days of hyperglobalisation, as great power competition persists. One scenario is of the world economy splitting into two blocs, led by the US and China. Another disturbing and plausible scenario is the world descending into autarky as business reverts to investing at home in response to Trump’s tariffs.