Policymakers used to ignore economic chokepoints, dismissing them as the natural friction points of an increasingly interconnected global economy. Today, they have trouble seeing anything else.
In Washington, the administration of U.S. President Donald Trump warns traditional allies against dangerous dependencies on China while simultaneously searching for ways to exploit those very same allies’ reliance on the United States—specifically their dependence on the American market, advanced technologies, the global financial system, and the U.S. security umbrella. Beijing, meanwhile, routinely accuses Washington of systematic economic coercion while aggressively leveraging its own near-monopoly over critical supply chains to pressure the United States and Europe.
At the same time, European capitals labor to build the euro into a viable alternative global currency in an effort to evade the iron grip of the U.S. dollar. Even smaller players have joined the fray. Iran, for instance, has repeatedly sought to leverage its strategic control over the Strait of Hormuz to place a chokehold on the vital international oil trade.
This sweeping obsession with 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 national economies integrated, chokepoints naturally proliferated: manufacturers extended complex supply chains across multiple borders, international banks routed routine transactions through the U.S. dollar system to minimize operational costs and transaction delays, and digital services took advantage of massive economies of scale that ultimately led to market dominance by just a handful of technology 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 within these global networks. Washington began surveilling international communications and using its unmatched influence over global banks to cut off financial flows to its geopolitical adversaries. Yet, even as these practices expanded, the vast majority of politicians and business leaders continued to focus myopically on the economic efficiencies of globalization.
Moves made during Donald Trump’s first term in the White House, however, forced world leaders to take a much harder look at vulnerabilities. The subsequent disruptions of the COVID-19 pandemic heightened fears of external economic dependence across the globe. Later, during Trump’s second administration, China discovered that a highly effective way to halt American pressure was to squeeze a critical chokepoint. The hubridic erosion of basic norms of international constraint by the United States also emboldened smaller nations, such as Iran, to explore aggressive options they had never previously dared to exploit.
Compared with an excessively rosy, pre-crisis vision of globalization that prioritized the sheer efficiencies of economic interdependence, it may now seem savvy to view the world economy as a vast system of chokepoints that countries can either turn to their own advantage or watch get turned against them. But this modern chokepoint view harbors a deadly blind spot. It is driving policymakers to focus obsessively on raw capabilities rather than coherent strategy—fixating relentlessly on what leverage they hold and what leverage others hold over them, while completely failing to consider the systemic consequences when numerous major countries build up their chokepoint power all at once.
The result is a familiar but profoundly dangerous dynamic: the security dilemma. In traditional security terms, one country’s defensive efforts to secure itself make its rivals feel threatened and prompt them to respond in kind, ultimately leaving everyone less safe. The more that sovereign states strengthen their control over critical chokepoints or rush to insulate themselves from potential coercion, the more they convince their rivals that their own economic security has been fundamentally undermined, thereby provoking direct retaliation.
As economic scholars such as David Bulman and Matt Ferchen have pointed out, each nation’s individual defensive actions contribute directly to the construction of a collective trap. The aggressive efforts of the United States to hamstring Chinese technology firms, for example, drove Beijing to accelerate its domestic technological development. That very acceleration, in turn, spurred heightened American fears of Chinese technological domination, creating a self-perpetuating spiral. Each side’s desperate attempt to become safer makes the other feel less secure, driving continuous, escalating friction.
Escaping this chokepoint trap is extraordinarily difficult precisely because it is collective in nature. Any government that unilaterally exercises restraint risks becoming an immediate victim of exploitation. And although the chokepoint trap bears a striking resemblance to the classic security dilemma, during the Cold War the measures that ultimately contained runaway cycles of military provocation were implemented only after the terrifying threat of the Cuban missile crisis sharply focused the attention of world leaders.
An obsessive focus on chokepoints might ultimately lead to collective disaster, but it will be remarkably hard for states to step off the escalation ladder and balance making credible threats with offering credible assurances and seeking genuine understandings. The most likely outcome is a severely fragmented world in which governments and private economic actors alike face increased volatility and the constant risk of escalation into economic shocks, cascading commercial disruptions, and potentially even war.
One Way Ratchet
In the traditional security dilemma, one country’s defensive move can easily appear offensive to another. A state may seek peaceful relations with a neighbor while quietly worrying that a belligerent leader could someday come to power next door. To hedge against that small but real risk, it might invest in a new weapons system or modestly increase the size of its standing army. Its neighbor can reasonably become alarmed by this buildup, wondering if it is preparation for a future invasion. The neighbor may then respond by ramping up its own defense spending, which leads the first country to grow even more suspicious and expand its military further, setting off an unyielding escalatory spiral.
Sometimes governments do harbor genuinely belligerent intentions. But even if all countries genuinely desire peace, they can end up violently distrusting each other and fielding massive, expensive military forces. In such an atmosphere of deep mistrust, innocent mistakes are easily 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 their security are transparently defensive rather than offensive—for instance, by investing in fortifications deep inside their own national territories instead of deploying troops to forward offensive bases. Yet even passive defenses can heighten tensions if a nation feels better protected against retaliation, as its rivals may fear that it will find future aggression far less risky.
In later writings, Jervis suggested that similar ambiguities could undermine economic and technological security as well. However, economic warfare is even likelier to generate unintended escalation than the traditional military security dilemma. Unlike military investments, economic policies are often exceptionally difficult to classify as strictly offensive or defensive.
When China builds up its domestic semiconductor sector, is it merely protecting its domestic economy against external shocks, or is it augmenting its capacity to coerce others? Industrial policy can be enacted for a purely defensive rationale—to establish resilience against geopolitical supply chain shocks. But if such a policy succeeds in building massive economies of scale, other states can reasonably fear that industrial dominance will eventually be converted into coercive political tools.
Economic security officials are typically far more interested in building national capacity than in exercising restraint. Meanwhile, traditional economic policymakers are more accustomed to soothing their own domestic markets than to assuaging the concerns of foreign competitors, let alone outright adversaries.
Defense bureaucracies possess strong command-and-control structures for a vital reason: ill-disciplined communications and misaligned decisions can have catastrophic consequences. The institutions responsible for making economic policy, by contrast—including central banks and departments of commerce—are rarely set up to speak with one voice. Many are weakly coordinated, and significant authority is routinely delegated to local-level investment and trade agencies.
Sometimes, as in the case of central banks, their operational autonomy is deliberately protected by law. Whereas military units deployed on discrete missions cannot act without explicit authorization, most economic agencies enjoy wide institutional freedom to act without being accused 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 external conflict.
When governments pursue chokepoint warfare, the problems created by these institutional ambiguities become severely exacerbated. In September 2025, closely following a series of high-level economic negotiations between top U.S. and Chinese officials aimed at stabilizing the bilateral relationship, the U.S. Commerce Department’s Bureau of Industry and Security enacted the so-called affiliates rule. This measure expanded export controls to cover additional subsidiaries owned by entities already listed on two U.S. government watch lists.
The bureau publicly described the measure as an attempt to close a minor administrative loophole and lighten regulatory burdens; it has since suspended the rule. Yet the timing left outside observers entirely unsure how to discern its broader strategic meaning. Was the Commerce Department merely tightening the enforcement of existing export controls as part of a routine bureaucratic process, or was the United States, as Chinese officials immediately suggested, deliberately engaging in "maximum pressure" tactics right between rounds of bilateral diplomatic talks?
It can be even harder to interpret the intentions of autocracies, as policymakers in such regimes are heavily insulated from public scrutiny. For instance, even after China promised to relax its strict restrictions on the export of rare-earth minerals and magnets in July 2025, private companies that applied for the necessary export licenses experienced prolonged, unexplained delays. It remained entirely unclear whether Beijing was deliberately signaling its ongoing ability to control critical supply chains or simply struggling to process bureaucratic requests efficiently through a newly created export-control apparatus.
Governments engaging in economic warfare often intentionally write or enforce regulations with a high degree of ambiguity to prompt private commercial actors to overcomply. This tactical behavior makes foreign rivals much more likely to interpret even hapless bureaucratic mistakes, administrative delays, and unintentional overreach as malign and deliberate plotting. Such mistakes deepen mistrust among great powers that are already inherently inclined to overrate the possibility of deliberate threats.
Conversely, political leaders are frequently excessively optimistic about their ability to surgically inflict economic pain on target countries. The flow of international commerce cannot be steered with the precision of a guided drone striking a weapons factory. Even targeted measures, such as placing specific firms on export-control lists, can prove ineffective. Controlled goods often end up in the possession of foreign subsidiaries or clandestine intermediaries. Broad attempts to close regulatory loopholes can easily go too far, putting thousands of independent firms with complex ownership ties directly into the crosshairs of the economic security state.
In October 2025, China expanded the reach of its own rare-earth export controls in retaliation against the U.S. affiliates rule and further efforts by Washington to restrict Chinese firms’ access to American technologies. If these retaliatory measures had not been suspended the following month, they would have severely disrupted production chains throughout Europe and Asia, as well as within the United States.
Officials who dream of an optimized form of chokepoint warfare—in which they can fire an economic sniper rifle at judiciously selected targets—regularly discover that they are instead wielding a blunderbuss whose pellets fly in all directions. The resulting collateral damage only serves to increase the risk of dangerous retaliatory spirals.
All Choked Up
The more that countries move to control key economic chokepoints, the more other nations will worry about how those chokepoints might be weaponized against them, driving them to seek and leverage their own bottlenecks. The result is a volatile world bristling with chokepoints and defensive barriers where every major power still feels completely insecure.
Even the most ordinary forms of mutual economic dependence begin to look like existential security risks. Put another way, in a globalized world where everything is connected, nearly everything can be considered a potential chokepoint. A piece of legislation introduced in the U.S. Senate in 2025 and the House in 2026, for instance, identifies even smart ovens and clothes dryers as potential national security threats.
Historically effective methods for limiting trade disputes frequently fail in the context of chokepoint warfare. In traditional tariff wars, governments often attempt to match like with like, responding to a tariff on foreign butter with a counter-tariff on eggs. Maintaining such proportionality is vastly more difficult when economic security risks are diverse, when different chokepoints confer entirely different kinds of leverage, and when countries wanting to retaliate against the weaponization of one network are forced to turn to completely different networks to respond.
In April 2025, when the United States threatened China with sweeping new tariffs and boosted its export controls on semiconductors, China could not retaliate by imposing an equivalent restriction on American semiconductors because it did not control that specific chokepoint. Instead, Beijing utilized its advantage over a different bottleneck: rare-earth elements.
However, when countries weaponize entirely different chokepoints sitting at the center of complex global supply chains, there is no easy way to judge whether a reaction will match the economic magnitude of the original act. Any notion of a simple 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, inspiring countries to try to impede their rivals’ scientific progress while racing to secure their own autonomy.
The Biden administration, anticipating that artificial intelligence might swiftly accelerate advances across a variety of military and civilian domains, sought to impede Chinese AI development by restricting the country’s access to specialized semiconductors. Administration officials stressed that their policy goals were strictly limited, describing their approach to China as a "small yard, high fence."
Unsurprisingly, Beijing rejected this benign framing, viewing the moves as an existential threat to its long-term future. China rapidly accelerated its own domestic semiconductor development and encouraged its firms to decouple from U.S. products, ultimately leaving Washington with less influence over Chinese technological development and even more reason to worry about future Chinese capabilities.
First Mover
Following the terrorist attacks of September 11, 2001, the United States began to make much more systematic use of economic and technological chokepoints. It expanded surveillance on both adversaries and allies, and exploited the structural dominance of the U.S. dollar to investigate and impose harsh sanctions on foreign banks and international companies.
American officials came to view the global economy’s deep interconnectedness as a tool to be manipulated—either to deter U.S. opponents or to strongarm allies into diplomatic compliance. The administrations of George W. Bush and Barack Obama expanded financial sanctions to squeeze Iran’s economy, eventually forcing Tehran to the negotiating table. The first Trump administration subsequently introduced new technological controls to limit Chinese companies’ access to advanced semiconductors, setting a direct precedent for the Biden administration’s broader efforts to curb Chinese artificial intelligence.
During this period, however, American officials usually paid little attention to the cumulative downside of these policies. Financial sanctions, for instance, were attractive because the vast majority of the costs fell directly on targeted foreigners and third parties wishing to do business with them. Exploiting chokepoints became a self-peruating enterprise with little purpose beyond sustaining itself.
A 2024 analysis by The Washington Post found that the United States was actively sanctioning people, properties, or organizations located in a third of all countries worldwide. Bill Reinsch, a former Commerce Department official, told the newspaper that such sanctions had become "the most important foreign policy tool in the U.S. arsenal," adding that "nobody in government is sure this whole strategy is even working."
Yet the more the United States exploited these chokepoints, the more it provoked countermeasures and imitation. As other global powers began developing their own chokepoint capabilities, they proved no more cautious.
China had long used economic pressure to achieve its policy goals, but it traditionally threatened countries’ access to its domestic consumer market rather than trying to control global supply bottlenecks. Two key events altered this playbook. In 2013, leaks by former U.S. National Security Agency contractor Edward Snowden revealed the extraordinary reach of American global intelligence networks. Then, the first Trump administration’s punishing campaigns against Chinese telecommunications giants ZTE and Huawei demonstrated Washington’s explicit willingness to use systemic coercion.
Following these shocks, domestic Chinese technological debates began to emphasize themes such as "information security" and "decoupling." Chinese leader Xi Jinping, whose earlier speeches focused primarily on straightforward industrial development, increasingly stressed that economic progress could not be separated from national security.
His "dual circulation" strategy sought both to reduce dependence on overseas consumer markets and to minimize China’s exposure to foreign economic pressure. As Beijing became acutely conscious of its vulnerability to U.S. technology and finance, it not only accelerated its drive toward technological self-reliance but also created new government structures that mirrored Washington’s targeting mechanisms, including a formal export control regime and rigorous security screening for inbound and outbound investments.
China publicly justifies these measures as acts of self-defense. Yet it has rapidly moved from proportionate responses to dramatic counter-escalation. When Trump announced his sweeping tariffs in April 2025, China not only imposed strict licensing restrictions on rare-earth exports but also suggested a few months later that its dominance over rare-earth processing gave it regulatory authority over the entire global semiconductor supply chain.
China also barred certain exports of dual-use goods to U.S. defense contractors and civilian technology companies, sanctioned U.S. firms it claimed were engaging 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 of these measures were subsequently suspended or terminated following bilateral negotiations, China has repeatedly demonstrated its capacity to strike back against perceived foreign economic coercion.
In another counteroffensive, Beijing began establishing a "blocking" regime to punish international companies that comply with foreign economic security restrictions. Foreign banks that follow U.S. law by cutting ties with a sanctioned Chinese refinery could face civil lawsuits in Chinese courts.
Regulations promulgated in August 2025 made it illegal for Chinese firms to provide information or conduct business with six specific organizations that perform due diligence and risk assessment on supply chains and promote labor rights. This effectively made it much harder for those entities to generate the forensic data that helps global companies comply with American legal requirements.
Follow the Leader
By now, China has comprehensively reshaped its economic policy around a narrow, defensive view of national security. And just as early U.S. chokepoint exploitation did, China’s moves to fence off ever-larger parts of its economy are provoking destabilizing counter-reactions and widespread international imitation.
Data from the Global Trade Alert, an independent monitor tracking government policy changes affecting international trade flows, captures this growing willingness to restrict commerce. 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 rapidly closing around governments as they find themselves entangled in an increasingly complicated web of economic and technological conflicts.
In this volatile dynamic, Europe—whose collective economy is nominally larger than China’s—finds itself perpetually forced to accommodate greater powers. Its ability to formulate coherent economic-security strategies and design policy tools is theoretically better developed than those of Beijing or Washington.
Over the past few years, the European Union has rolled out a powerful anti-coercion instrument allowing it to retaliate against external economic pressure, published an economic security strategy identifying the risks of chokepoint warfare, and proposed a Chips Act 2.0 aimed at maintaining Europe’s position as an "indispensable player" in critical supply chains.
Yet Europe has struggled to translate these policy words into actual geopolitical leverage. It remains deeply dependent on American technology and security guarantees, and its dreams of controlling its own chokepoints quickly dissipate in the face of the persistent risk that Washington could alter or abandon its NATO commitments. So far, Europe has not even attempted to deploy its anti-coercion instrument against the United States, despite repeated economic pressures from the Trump administration.
At the same time, Europe is increasingly constrained by its economic dependence on China. When the EU imposed countervailing duties on Chinese electric vehicles after finding they were unfairly subsidized, Beijing was quick to target vital industrial sectors in key EU member states, forcing European Commission President Ursula von der Leyen to spend precious political capital to keep Berlin and Madrid aligned behind a common European policy.
In September 2025, when the Dutch government attempted to assert sovereign authority over Nexperia, a domestic chip manufacturer purchased by a Chinese firm, Beijing prevented the company from finishing chips inside China, instantly triggering a 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, ongoing Chinese threats are preventing European capitals from contemplating the comprehensive actions needed to reduce their vulnerabilities.
Every European aspiration for strategic autonomy is constantly hemmed in by the expectation that the United States or China will successfully exploit internal divisions to shatter European solidarity. Furthermore, national security decisions remain strictly the domain of individual member states, preventing the EU as a whole from leveraging potential economic chokepoints. While Europe has made huge strides in acting collectively to impose sanctions against Russia, enforcement still largely depends on national capitals. The result is a major bloc that understands the dangers of escalation better than Washington or Beijing, yet remains largely powerless to avoid them.
Japan, meanwhile, began thinking about the long-term threat of Chinese economic coercion much earlier and has tailored its national approach more effectively, successfully balancing strategic autonomy and domestic resilience against potential coercion while retaining control over vital technological chokepoints. Tokyo has established a national stockpile of rare earths to mitigate Chinese pressure while making its manufacturing base indispensable to U.S. military supply chains. Yet even Japan has occasionally succumbed to the seduction of chokepoint politics: in 2019, it limited South Korea’s access to key semiconductor chemicals in response to a diplomatic dispute over historical World War II grievances.
Smaller, poorer countries have also been violently caught up in this escalating spiral. Some have briefly benefited from the spread of chokepoint warfare in the short term; the Philippines, for instance, secured millions of dollars in foreign grants from the United States when Washington pressured allies to block Huawei from domestic telecommunications networks.
Others, however, are simply being squeezed. In Myanmar, the Kachin Independence Army sells dysprosium and terbium—critical elements used in industrial magnets—to fund its civil war against the military junta, giving China, the primary buyer, even greater leverage over the domestic conflict. Greenland, possessing vast deposits of critical natural resources, has faced repeated economic and geopolitical pressures.
As time goes on, the long-term costs are likely to heavily outweigh any short-term financial benefits, even for nations receiving side payments. Governments in smaller and developing countries desperately want the autonomy to chart a path toward greater prosperity for their citizens, but the global obsession with economic security makes finding that path increasingly difficult.
No Way Out
At present, the United States and China are locked in a fragile, short-term stasis. Washington is moderately tempering its use of chokepoints out of a growing fear of ferocious economic blowback, while Beijing currently sees little direct benefit in overt provocation.
However, this moment of relative stability is likely to prove fleeting. Even after Donald Trump eventually leaves the White House, the United States will almost certainly continue pushing for global technological and energy dominance. Similarly, China will persist in pursuing policies aimed at quietly building foreign dependencies while undercutting American coercive power. Such stalemates are inherently fragile in a world where structural incentives inexorably point toward continuous escalation.
The major powers with the greatest latitude to shape the international order currently view chokepoints merely as isolated tactical capabilities. Their strategic vision rarely extends to the long-term geopolitical implications of their actions. As they build up their offensive capacities and rush to shore up their domestic defenses, they convince themselves that they are simply ensuring national security.
Instead, they are actively miring themselves in an economic chokepoint arms race that will render them, and the rest of the world, substantially less secure. The intense jealousies of the traditional national security dilemma have now spilled over fully into the global economy. A world in which economic chokepoints become simultaneously forts, garrisons, and weapons will be characterized by perpetual low-level economic conflict and the ever-present danger of larger conflagrations.
To identify broader solutions, some scholars and policy thinkers look to the Cold War for historical inspiration, emphasizing the vital value of de-escalation and mutual restraint. During that era, the catastrophic risk of nuclear war was successfully mitigated through regular diplomatic meetings aimed at establishing a shared understanding of redlines, alongside technical systems designed to ensure effective communication during an acute crisis. Over time, these efforts gave rise to more formal international arrangements, such as treaties regulating arms and troop movements, enforced by satellites and independent monitoring mechanisms.
An assurance-based security logic can occasionally insulate certain economic chokepoints from weaponization. Singapore, for instance, has signed formal agreements with Australia and New Zealand to keep essential supplies flowing seamlessly between their countries. In 2022, members of the World Trade Organization agreed not to place export restrictions on food purchased by the World Food Program for humanitarian purposes.
Yet it will be exceptionally difficult to translate such isolated commitments into a large-scale system of effective communication and mutual restraint. It famously took the Cuban missile crisis and the terrifying prospect of nuclear annihilation to awaken Cold War antagonists to the reality that individually rational acts could lead to collectively catastrophic outcomes.
Today, as the cycle of mutual suspicion gathers speed, it becomes increasingly hard to reverse. The more governments create specialized bureaucracies devoted to identifying and controlling economic chokepoints, the more a rigid chokepoint logic becomes the default lens through which they view routine commercial policy. It is no coincidence that Europe—the great power most hesitant to actually weaponize chokepoints—is also the power least capable of deploying them effectively.
It is far more likely that the chokepoint trap will continue to tighten. Military competition has long driven states to build matching institutional structures—professional armed forces, defense bureaucracies, and domestic weapons industries. This kind of bureaucratic mirroring is already happening rapidly in the realm of economic security.
China is increasingly resembling the United States by building specialized governmental tools to leverage chokepoints against its adversaries, while the United States is imitating China by intervening directly in its domestic economy to reshape it around national security concerns. The European Union faces a stark choice between managing its steady slide toward global irrelevance or radically reforming its internal balance of power to keep pace. Smaller powers will do whatever they can to emulate the larger nations while relying on their protection.
This environment will be exceedingly difficult for governments to navigate, but far worse for international business. Private firms will be forced to traverse a labyrinthine and unpredictable global economy where payment and information systems are heavily fragmented, and clashing superpowers alternately attempt to press them into national service or squeeze them out of existence altogether.
Multinational corporations may soon become unified entities in name only, as their individual foreign subsidiaries face directly countervailing pressures from host governments. Economic efficiencies that currently seem natural, such as the seamlessness of international financial transactions, may well evaporate as governments increasingly equate global commercial infrastructures with national insecurity.
Even this scenario is not the worst-case outcome. The greatest long-term risk posed by the chokepoint trap is not its predictable commercial miseries, but its unpredictable disasters. Mutual suspicion, institutional misunderstanding, and intense competition in the realm of economic security create an ideal recipe for armed conflict.
Consider a single hypothetical: it is not difficult to imagine a scenario where additional Chinese restrictions on rare-earth magnets degrade, among other things, the United States’ ability to rebuild the advanced missile stockpiles depleted by regional conflicts. Whether or not Beijing intended that specific effect, U.S. leaders could easily interpret such an act as definitive evidence that China plans to launch a military offensive against Taiwan before Washington can achieve full independence from Chinese supply chains, prompting a dangerous sense of urgency in the United States to strike first.
There is ample historical precedent for what may seem like a worst-case scenario. In his book The Economic Weapon, historian Nicholas Mulder documents how, in the 1930s, the fears of Axis powers regarding potential League of Nations sanctions and economic isolation drove them to aggressively seize territory and resources before it was too late. The chokepoint trap is dangerous enough on its own; what it ultimately threatens to lead to could be far worse.
