Policymakers used to ignore chokepoints. Now they have trouble seeing anything else. Across the globe, governments are increasingly obsessed with mastering the critical nodes of international trade, finance, and technology, viewing global interdependence not as a source of mutual prosperity, but as a battlefield of strategic vulnerabilities.
The administration of U.S. President Donald Trump has actively warned allies against becoming dependent on China, even as it simultaneously searches for ways to exploit those same allies’ reliance on the United States. This leverage spans the American market, cutting-edge technologies, the global financial system, and the U.S. security umbrella. Beijing, meanwhile, routinely accuses Washington of economic coercion while leveraging its own dominance over critical supply chains to press the United States and Europe. In Europe, leaders nurse ambitions of building the euro into an alternative global currency to evade the dollar’s iron grip. Even smaller players have joined the fray; Iran, for instance, has repeatedly sought to leverage its geographical control over the Strait of Hormuz to exert a stranglehold on the global oil trade.
This fixation on wielding and countering chokepoint power may feel sudden, but it has evolved over the past quarter-century as a direct byproduct of globalization itself. As global economies integrated, chokepoints naturally proliferated. Manufacturers extended supply chains across borders, banks routed transactions through the U.S. dollar system to minimize costs and delays, and digital services took advantage of economies of scale, leading the modern market to become dominated by a handful of massive platforms.
In the wake of the September 11, 2001, terrorist attacks, the United States combined its traditional advocacy for free markets with an increasingly ambitious effort to exploit its dominant position in these networks. Washington began surveilling global communications and using its immense influence over international banks to cut off financial flows to its perceived adversaries. Yet, even as these security mechanisms expanded, most politicians and business leaders continued to focus squarely on globalization’s economic efficiencies.
Major shifts occurred during Trump’s first term, causing world leaders to take a much closer look at structural vulnerabilities. The subsequent COVID-19 pandemic heightened national fears of external dependence. Later, during Trump’s second administration, Beijing discovered that an effective way to counter American pressure was to squeeze a critical chokepoint. The erosion of basic norms of constraint by the United States also emboldened smaller nations, such as Iran, to explore aggressive economic and geopolitical options they had never previously dared to exploit.
While viewing the world economy as a system of chokepoints may seem savvy compared to an overly rosy vision of globalization, this perspective harbors a deadly blind spot. It is driving policymakers to focus heavily on capabilities rather than overarching strategy—fixating obsessively on what leverage they hold, and what leverage others hold over them, rather than considering the destabilizing consequences of multiple nations building up chokepoint power simultaneously.
The result is a familiar yet dangerous dynamic: the security dilemma, a phenomenon where one country’s efforts to secure itself make others feel inherently threatened and prompt them to respond in kind, ultimately leaving everyone less safe. As economic scholars like David Bulman and Matt Ferchen have pointed out, each country’s individual defensive actions contribute to the construction of a collective trap.
American efforts to hamstring Chinese technology firms, for example, directly led China to accelerate its domestic technological development. This acceleration, in turn, spurred fresh American fears of Chinese market and technological domination in a self-peruating spiral. Each side’s attempt to become safer makes rivals feel less secure, driving further international escalation.
Escaping this chokepoint trap is exceptionally difficult precisely because it is collective. Any government that exercises unilateral restraint risks becoming a victim of its competitors. While the chokepoint trap resembles the classic security dilemma, during the Cold War the measures that ultimately contained runaway military provocations were implemented only after the existential threat of the Cuban missile crisis forced leaders to pay attention. An obsessive focus on economic chokepoints might lead to collective disaster, but states will find it remarkably hard to jump off the escalator, balance credible threats with credible assurances, and seek genuine collective understandings. The most likely outcome is a fragmented global order in which governments and private actors alike face increased volatility and the looming risk of economic shocks, cascading disruptions, and even outright war.
One Way Ratchet
In the traditional security dilemma, a defensive move by one country can easily appear offensive to another. A state may seek peaceful relations with a neighbor but worry that a hostile leader could eventually come to power next door. To hedge against that risk, it might invest in a new weapons system or modestly increase the size of its military. The neighbor could reasonably become alarmed, wondering if the buildup is preparation for an invasion, and respond by ramping up its own defense spending. This sets off a classic escalatory spiral.
Sometimes governments do harbor genuinely belligerent intentions. But even if all countries genuinely desire peace, they can end up deeply distrusting each other and fielding massive armies. In such a mistrustful atmosphere, innocent mistakes are routinely misinterpreted. In a classic 1978 essay on the security dilemma, political scientist Robert Jervis argued that countries can mitigate the risk of misinterpretation by ensuring that the acts they undertake to enhance security are obviously defensive rather than offensive—such as investing in fortifications deep within their own territory rather than deploying troops to forward bases. However, even passive defenses can heighten tensions: if a country feels better protected against retaliation, rivals may fear that it will find future aggression less risky.
In later writings, Jervis suggested that similar ambiguities could undermine economic and technological security. Economic warfare, however, is even likelier to generate unintended escalation than the traditional military security dilemma. Unlike military investments, economic policies can be notoriously difficult to classify as strictly offensive or defensive.
When China builds up its semiconductor sector, for instance, is it merely protecting its domestic economy or augmenting its capacity to coerce others? Industrial policy can be enacted for a purely defensive reason—to establish resilience against geopolitical shocks. But if such a policy succeeds in building dominant economies of scale, other states will reasonably fear that this industrial dominance can be rapidly converted into coercive tools.
Economic security officials are typically far more interested in building state capacity than in exercising restraint, whereas traditional economic policymakers are more accustomed to soothing domestic markets than assuaging the concerns of foreign competitors. Defense bureaucracies maintain strong command-and-control structures for a reason, as ill-disciplined communications can have disastrous consequences. Economic policy institutions, by contrast—including central banks and commerce departments—are rarely set up to speak with one voice.
Many are weakly coordinated, and significant authority is often delegated to local-level investment and trade agencies. Central banks, for their part, protect their autonomy deliberately. While military units on discrete missions cannot act without explicit authorization, most economic agencies enjoy wide freedom to act without accusations of going rogue. As recent disagreements between the U.S. Department of the Treasury and the Federal Reserve over bond yields illustrate, standard bureaucratic infighting can easily shade into visible international conflict.
When governments pursue chokepoint warfare, these institutional ambiguities are severely magnified. In September 2025, following a series of high-level economic negotiations between top U.S. and Chinese officials aimed at stabilizing bilateral ties, the U.S. Commerce Department’s Bureau of Industry and Security enacted the so-called affiliates rule. This policy expanded export controls to cover more subsidiaries owned by entities on two U.S. government watch lists.
The bureau publicly described the measure as an effort to close a loophole and lighten administrative burdens, and it has since suspended the rule. Yet the timing left outside observers unsure of its broader strategic meaning. Was the Commerce Department merely tightening enforcement of existing export controls as part of routine bureaucratic processes, or was the United States engaging in maximum pressure tactics between rounds of bilateral talks, as Chinese officials asserted?
Discerning intent is even harder with autocracies, whose policymakers are heavily insulated from public scrutiny. For example, even after China promised to relax restrictions on rare-earth mineral and magnet exports in July 2025, companies applying for export licenses experienced unexplained delays. It remained unclear whether Beijing was deliberately signaling its capacity to control critical supply chains or simply struggling to process requests through a newly created export-control bureaucracy.
Governments engaging in economic warfare frequently write or enforce regulations ambiguously to prompt private actors to overcomply. This behavior makes others far more likely to interpret even mundane bureaucratic mistakes, delays, and unintentional overreach as deliberate, malign plotting. Such mistakes deepen mistrust among great powers that are already inherently inclined to overrate external threats.
Conversely, leaders are often excessively optimistic about their ability to surgically inflict economic pain on target countries. Commerce cannot be steered as carefully as a precision-guided missile. Even targeted measures, such as placing specific firms on export-control lists, can prove ineffective because controlled goods often end up in the hands of subsidiaries or clandestine intermediaries. Broad attempts to close loopholes can go too far, putting thousands of firms with complex ownership ties in the crosshairs of the economic security state.
In October 2025, China expanded its own rare-earth export controls in retaliation against the U.S. affiliates rule and broader American efforts to restrict Chinese access to advanced technologies. Had these measures not been suspended the following month, they would have severely disrupted production chains across Europe, Asia, and the United States. Officials who dream of conducting surgical economic warfare regularly discover they are instead wielding a blunderbuss whose pellets fly in all directions, with collateral damage only accelerating retaliatory spirals.
All Choked Up
The more some nations move to control key chokepoints, the more others worry about how those chokepoints might be weaponized and subsequently seek to leverage their own. The result is a world bristling with chokepoints and defenses where every major power feels profoundly insecure.
Even ordinary forms of mutual dependence begin to look like existential security risks. In a world where everything is connected, nearly everything can be reframed as a chokepoint. Legislation introduced in the U.S. Senate in 2025 and the House in 2026, for instance, identified everyday smart ovens and clothes dryers as potential national security threats.
Historically effective methods for limiting trade disputes often fail in the realm of chokepoint warfare. In traditional tariff wars, governments frequently try to match like with like, responding to a tariff on butter with a countertariff on eggs. Maintaining proportionality becomes much harder when economic security risks are diverse, when different chokepoints confer distinct kinds of leverage, and when countries seeking to retaliate must turn to entirely different commercial networks.
In April 2025, when the United States threatened China with sweeping tariffs and tightened export controls on semiconductors, China could not retaliate with equivalent restrictions on American semiconductors because it did not control that specific chokepoint. Instead, it responded by leveraging a different bottleneck: rare earths. When countries weaponize entirely different chokepoints situated at the center of complex global supply chains, there is no simple way to judge whether a reaction matches the economic magnitude of the original act. The notion of a clean escalation ladder that adversaries can neatly climb up and down becomes a fantasy.
Rapid and unpredictable technological change makes this dynamic even more hazardous. As Jervis warned, countries persistently worry that technological innovation will create enduring, insurmountable advantages for their adversaries. Such anxieties worsen the chokepoint trap, driving nations to impede rivals’ progress while racing to build their own complete autonomy.
The Biden administration, anticipating that artificial intelligence might rapidly accelerate advances across military and civilian domains, sought to impede Chinese AI development by restricting access to specialized semiconductors. Officials framed their goals as limited, describing the approach as a "small yard, high fence." Unsurprisingly, Beijing rejected this benign framing, viewing the moves as a direct threat to its long-term future. In response, China accelerated its domestic semiconductor development and encouraged local firms to wean themselves off U.S. products, ultimately leaving Washington with less influence over Chinese technological development and heightened fears of future competition.
First Mover
Following the September 11 attacks, the United States made systematic use of economic and technological chokepoints, monitoring both adversaries and allies while exploiting the global dominance of the U.S. dollar to investigate and sanction foreign banks and companies. American officials viewed global economic interconnectedness as a lever to deter opponents or strong-arm allies into compliance. The George W. Bush and Obama administrations expanded financial sanctions to squeeze Iran’s economy, successfully forcing Tehran to the negotiating table. The first Trump administration then introduced technological controls limiting Chinese companies’ access to advanced semiconductors, establishing the clear precedent for subsequent efforts to curb Chinese AI.
Throughout this period, however, American officials largely ignored the cumulative downside. Financial sanctions were attractive because most of the immediate costs fell on targeted foreigners and those doing business with them. Exploiting chokepoints became a self-perpetuating enterprise with little purpose beyond sustaining itself. A 2024 Washington Post analysis revealed that the United States was sanctioning individuals, properties, or organizations in a third of all countries worldwide. Bill Reinsch, a former Commerce Department official, noted that sanctions had become the most important foreign policy tool in the U.S. arsenal, yet "nobody in government is sure this whole strategy is even working."
As the United States exploited these chokepoints, it provoked widespread countermeasures and imitation. Other powers quickly began developing their own chokepoint capabilities with equal lack of caution. China had long used economic pressure to achieve its goals, but its previous tactics typically involved restricting access to its domestic market rather than controlling global bottlenecks.
Two key events altered this playbook: the 2013 leaks by former U.S. National Security Agency contractor Edward Snowden revealing the vast reach of American global information networks, and the first Trump administration’s aggressive campaigns against Chinese telecommunications giants ZTE and Huawei, which demonstrated Washington’s willingness to coerce foreign corporate entities.
These shocks transformed Chinese technological debates, elevating themes of information security and decoupling. Chinese leader Xi Jinping increasingly emphasized that economic development could not be separated from national security. His "dual circulation" strategy sought to reduce dependence on overseas markets while insulating China from foreign economic pressure. As Beijing became acutely aware of its vulnerability to U.S. technology and finance, it accelerated technological self-reliance and created new government structures mirroring Washington’s targeting mechanisms, including an export control regime and security screening mechanisms for inbound and outbound investment.
While Beijing justifies these measures as self-defense, it has rapidly moved from proportionate responses to dramatic counterescalation. When Trump announced sweeping tariffs in April 2025, China responded not only with rare-earth licensing restrictions but also by suggesting that its dominance over rare-earth processing gave it regulatory authority over the entire global semiconductor supply chain.
China also barred exports of certain dual-use goods to U.S. defense contractors and tech companies, sanctioned U.S. firms engaged in arms sales or technology cooperation with Taiwan’s military, and launched antitrust investigations into major American corporations including Google, Nvidia, and DuPont. Although some measures were later suspended following bilateral negotiations, China repeatedly demonstrated its capacity to strike back against perceived economic coercion.
Additionally, Beijing began establishing a "blocking" regime to punish foreign companies complying with other nations’ economic security restrictions. Foreign banks that adhere to U.S. law by cutting ties with a sanctioned Chinese refinery now face potential lawsuits in Chinese courts. Rules promulgated in August 2026 made it illegal for Chinese firms to provide information or conduct business with six organizations that perform supply chain due diligence and risk assessments, complicating compliance with American laws for companies worldwide.
Follow the Leader
China has fundamentally reshaped its economic policy around a narrow view of national security. Just as early U.S. chokepoint exploitation triggered a global scramble, China’s efforts to fence off its economy are prompting destabilizing reactions and imitations. Data from the Global Trade Alert, an independent monitor tracking international trade policy changes, shows that since 2020, countries have on average enacted seven times as many export restrictions per year as they did between 2010 and 2019. The chokepoint trap is steadily closing as governments become entangled in an intricate web of economic and technological conflicts.
Within this dynamic, Europe—whose economy is nominally larger than China’s—finds itself perpetually forced to accommodate competing pressures. Its ability to formulate coherent economic-security strategies and design policy tools is well-developed; over recent years, the European Union has introduced a powerful anti-coercion instrument, an economic security strategy identifying chokepoint risks, and a Chips Act 2.0 aimed at maintaining Europe’s position as an indispensable player in supply chains.
However, Europe has struggled to translate words into leverage. It remains deeply dependent on U.S. technology and security guarantees, and its aspirations of controlling its own chokepoints dissolve in the face of the risk that Washington could alter or abandon its NATO commitments. To date, Europe has not deployed its anti-coercion instrument against the United States, despite repeated economic pressures from the Trump administration.
Europe is similarly constrained by its dependence on China. When the EU imposed countervailing duties on Chinese electric vehicles found to be unfairly subsidized, Beijing quickly targeted vital sectors in key EU member states, forcing European Commission President Ursula von der Leyen to expend precious political capital to maintain a common bloc policy. In September 2025, when the Dutch government attempted to assert sovereign authority over Nexperia, a Dutch chip manufacturer owned by a Chinese parent company, Beijing blocked the firm from finishing chips in China, creating a severe supply chain crisis across the European automotive industry. According to a mid-2026 report by Tobias Gehrke, a senior policy analyst at the European Council on Foreign Relations, Chinese threats are actively preventing European member states from taking the comprehensive actions required to reduce their dependencies.
Every European push for strategic autonomy is hemmed in by the expectation that the United States or China will exploit internal divisions. Furthermore, national security decisions remain the strict domain of individual member states, preventing the EU from leveraging potential pan-European chokepoints. While the bloc has acted collectively to impose sanctions against Russia, enforcement still largely relies on national governments, leaving Europe acutely aware of escalation dangers yet largely powerless to avoid them.
Japan, by contrast, anticipated the threat of Chinese coercion early and tailored its approach more effectively, balancing strategic autonomy and resilience against external pressure with control over vital technological chokepoints. Japan created a national stockpile of rare earths to mitigate Chinese economic leverage while making itself indispensable to U.S. military supply chains. Yet even Tokyo has succumbed to chokepoint politics; in 2019, it restricted South Korea’s access to key semiconductor chemicals in a dispute over historical wartime grievances.
Smaller and poorer developing nations are now also being swept into this escalatory spiral. Some have benefited temporarily—the Philippines, for instance, secured millions in grants from the United States during Washington’s campaign to block Huawei from telecommunications infrastructure. Others are simply being squeezed. In Myanmar, the Kachin Independence Army has sold dysprosium and terbium, used in industrial magnets, to fund its civil war against the military junta, giving China—the primary buyer—greater leverage over the conflict. Greenland, with its vast natural resources, has faced repeated military threats from Trump. Over time, the systemic costs are likely to outweigh short-term financial benefits for smaller nations seeking the autonomy to chart a prosperous path for their citizens.
No Way Out
Currently, the United States and China are locked in a temporary stasis. Washington is moderately tempering its chokepoint use out of fear of severe blowback, and Beijing sees little immediate benefit in direct provocation. But this stability is likely to prove fleeting. Even after Trump leaves office, the United States will almost certainly continue pursuing global technological and energy dominance, while China pursues quiet strategies to build dependencies and undermine American coercive power. In a world where incentives inexorably point toward escalation, stalemates remain fragile.
Major global powers currently view chokepoints strictly as instruments of tactical capability rather than strategic consequences. As they build offensive capacities and shore up domestic defenses, they convince themselves they are ensuring national security. Instead, they are locking themselves into an economic chokepoint arms race that leaves everyone less secure.
The rivalries of the traditional national security dilemma have fully spilled over into the global economy. A world where economic chokepoints function as forts, garrisons, and weapons simultaneously is destined for perpetual low-level economic conflict and an ever-present risk of larger conflagrations.
To identify broader solutions, scholars and policy thinkers frequently look to the Cold War for inspiration, emphasizing the value of de-escalation and mutual restraint. During that era, the threat of nuclear annihilation was mitigated through regular meetings to establish shared redlines and communication systems during crises. Over time, these efforts yielded formal arrangements, such as arms control treaties monitored by satellites.
An assurance-based logic can occasionally insulate specific economic chokepoints from weaponization; Singapore, for instance, has signed agreements with Australia and New Zealand to keep essential supplies flowing between their countries, and WTO members agreed in 2022 to exempt World Food Program humanitarian food purchases from export restrictions.
However, transforming such commitments into a large-scale system of effective communication and mutual restraint will be exceptionally difficult. It took the Cuban missile crisis and the immediate threat of annihilation to awaken Cold War antagonists to the perils of collectively disastrous trajectories.
Today, as mutual suspicion accelerates, reversing course becomes harder with each passing day. The more governments establish bureaucracies dedicated to identifying and controlling economic chokepoints, the more chokepoint logic becomes the default lens for routine economic policymaking. It is no coincidence that Europe—the major power most hesitant to weaponize chokepoints—is also the least capable of deploying them.
A broader mirroring effect is already underway. China is increasingly adopting American bureaucratic tools to leverage chokepoints, while the United States is increasingly adopting Chinese-style state interventions in the domestic economy to address security concerns. The European Union faces a stark choice between managing its own irrelevance or radically reforming its internal governance to keep pace, while smaller powers emulate major players or seek protection under their umbrellas.
For international businesses, this fragmentation creates a treacherous environment. Multinational corporations may soon find themselves unified in name only as regional subsidiaries face conflicting demands from host governments. Efficiencies that seem natural today, such as seamless international financial transactions, could evaporate as governments increasingly equate global commercial infrastructure with national vulnerability.
Even more concerning than ongoing economic friction is the potential for unpredictable disasters. Suspicion, misunderstanding, and intense competition in economic security create an ideal recipe for unintended military conflict. It is easy to envision a scenario where additional Chinese restrictions on rare-earth minerals degrade the U.S. ability to rebuild missile stockpiles depleted by regional conflicts. Whether or not Beijing intends this outcome, U.S. leaders could interpret the move as proof that China plans a military offensive against Taiwan before America achieves supply chain independence, triggering a dangerous preemptive crisis in Washington.
Historical precedent offers sobering warnings. As historian Nicholas Mulder documented in The Economic Weapon, fears of League of Nations sanctions and economic isolation in the 1930s drove Axis powers to aggressively seize territory and resources before it was too late. The chokepoint trap is already hazardous; what it ultimately risks leading to may be far worse.
