President Donald Trump may be the only one who calls “tariff” the “most beautiful word in the dictionary,” but his exuberance reflects a broader reality: We are living in an age of economic warfare. Sanctions, tariffs and export controls are now the primary weapons great powers wield against one another. While the United States possesses the world’s most fearsome economic arsenal, China, the European Union and others are starting to catch up.
In this contest, the key to geopolitical power is control over chokepoints — critical nodes in the global economy where one nation holds a dominant position and alternatives are scarce or nonexistent. Countries that control these chokepoints command extraordinary leverage, as they can deny others’ access to them and devastate their economies.
The paradox of economic warfare is that sanctions and tariffs are only effective if you can first pull others in — and keep them there.
Today, the most important chokepoint is the U.S. financial system — encompassing the dollar itself and the network of banks and payment systems that facilitate global commerce. Other highly consequential chokepoints include the technologies underpinning advanced semiconductors, the beating heart of the digital world. Thanks to its control of these chokepoints, which solidified in the period of hyperglobalization following the Cold War, the United States no longer needs to commit to costly naval blockades or secure U.N. consensus to impose punishing sanctions on other countries — both of which it had to rely on to pressure Saddam Hussein’s Iraq as recently as the 1990s. Now, at the stroke of a pen, the U.S. president can impose economic penalties far more severe than the blockades and embargoes of old.
But as America has weaponized these chokepoints, the rest of the world has taken notice, threatening to undermine its commanding position. From Beijing to Brasília, governments are racing to construct alternative financial channels, determined to avoid the fate of heavily sanctioned U.S. adversaries like Iran and Russia. Meanwhile, emerging technologies — such as artificial intelligence, digital currencies and clean-energy systems — are creating new chokepoints, triggering an intense competition for control among global powers.
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