Age of Economic Warfare Challenges U.S. Power

John West

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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 U.S. 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 U.S. 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 U.S. 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 U.S. technological leadership by restricting Chinese access to U.S. technology, including some produced outside the U.S.. A particular concern was that the 5G technology of Huawei could create a a chokepoint that China could grip.