Global Macro Research
Macro BytesHow are the US and China weaponising the global economy?
We explore how economic chokepoints—from the dominance of the US dollar to China’s grip on rare earths—are reshaping global power, trade and the risks of economic warfare.
Authors
Paul Diggle
Chief Economist
Luke Bartholomew
Deputy Chief Economist
Duração: 51 Mins
Date: 04/11/2025
US export controls on high-end semiconductor chips and China’s control over rare earth supply, are just two examples of major economies weaponising chokepoints in the global economy.
In the latest episode, Paul and Luke speak to Edward Fishman, a former US State Department sanctions official, now Colombia University professor and author of Chokepoints: How the Global Economy Became a Weapon of War.
They discuss how financial and legal chokepoints arose out of the structure of the modern global economy, and how major powers use these chokepoints to pursue their geopolitical interests.
They discuss how financial and legal chokepoints arose out of the structure of the modern global economy, and how major powers use these chokepoints to pursue their geopolitical interests.
Some highlights:
- Economic power without military force. The US has used its control over the dollar-based financial system to impose sanctions on countries such as Iran and Russia, isolating them from global markets. While sanctions can inflict economic pain, converting that pain into political change is far from guaranteed.
- The rise of workarounds—and new risks. Overuse of chokepoints can backfire, prompting rivals to build alternatives. China is increasing trade settlement in its own currency, while Russia has built ‘shadow fleets’ to move its oil and circumvent Western control of maritime insurance markets. Yet, as the discussion highlights, the dollar’s dominance remains resilient and substitutes are hard to scale.
- A more fragmented, uncertain world. With both the US and China seeking control over critical supply chains—from semiconductors to rare earths—the risk of economic warfare is intensifying. These tensions could influence everything from inflation to the availability of everyday technology.
- Why it matters. Chokepoints aren’t just a concern for policymakers—they affect the prices we pay, the security of our jobs and the stability of the global system.
Listen to the latest episode of our Macro Bytes podcast for the full discussion.
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