A Primer on 21st-Century Economic Weapons

Economic sanctions and export controls represent the two most powerful offensive economic national security weapons in the American arsenal. With the stroke of a pen (and now, a felt-tipped marker), the United States can unleash its economic might against adversaries to deny them access to the U.S.-dominated global financial system and high-tech supply chains.

Ideally, these tools support broader foreign policy and national security objectives. Often, as the Treasury Department itself has acknowledged, they serve as tools of first resort: something stronger than mere diplomatic posturing yet less perilous than military action—the “middle ground between words and wars.” The ease of execution and generally low marginal cost of individual designations encourages frequent use of the tools. This perceived low cost belies a more complicated reality. Additionally, the more frequently and less precisely the tools are used, the less effective they become over time. Almost a decade ago, then-Treasury Secretary Jack Lew cautioned about the pitfalls of sanctions overuse. Yet the first Trump and Biden administrations dramatically expanded the number of sanctions designations during their tenures. Some policymakers and scholars worry that their overuse will precipitate the demise of the U.S. dollar as the world’s predominant reserve and trade currency. Demands on the tiny and chronically overstretched Commerce and Treasury Department bureaucracies continue to grow without commensurate staffing and budget increases. What is clear is that sanctions, export controls, and now tariffs will remain firmly in the economic national security arsenal as the second Trump administration takes shape.

The use (and misuse) of these economic tools over the past two decades lies at the heart of Edward Fishman’s “Chokepoints: American Power in the Age of Economic Warfare.” Through a detailed and engaging diplomatic history, “Chokepoints” illuminates the often opaque mechanisms of U.S. economic power deployed against adversaries via the U.S.-dominated and U.S.-dollar-denominated global financial system and, more recently, U.S.-developed advanced semiconductor technologies supply chain.

Fishman, a scholar at Columbia University and former official at the Defense, State, and Treasury Departments, draws on his extensive experience as a national security practitioner to unpack the often byzantine world of economic bureaucratic politics at home and overseas. “Chokepoints” builds upon—and contributes to—a growing body of literature on economic statecraft over the past several years with Henry Farrell and Abraham Newman’s “Underground Empire: How America Weaponized the World Economy,” Saleha Mohsin’s “Paper Soldiers: How the Weaponization of the Dollar Changed the World Order” (previously reviewed on Lawfare), Stephanie Baker’s “Punishing Putin: Inside the Global Economic War to Bring Down Russia,” Chris Miller’s “Chip War: The Fight for the World’s Most Critical Technology,” Eva Dou’s “House of Huawei: The Secret History of China’s Most Powerful Company,” and Agathe Demarais’s “Backfire: How Sanctions Reshape the World Against U.S. Interests” (previously reviewed on Lawfare). What sets Fishman’s book apart from these other important contributions is his ability to weave together a diplomatic history with a detailed and technical explanation of how economic weapons affect companies and industries.

Read the full article on Lawfare.