The new economic arms race

Edward Fishman, director of the Center for Geoeconomics at the Council on Foreign Relations and author of Choke Points: American Power in the Age of Economic Warfare, explains how the U.S. pioneered modern economic warfare by exploiting vulnerabilities in global finance and supply chains. These "economic choke points"—areas where one country or its allies dominate with few substitutes—have replaced many traditional geographic ones, sparking a global arms race.

From Geographic to Economic Choke Points

Historically, economic warfare relied on controlling physical passages, like naval blockades. An early example from 432 BC: Athens embargoed Sparta's ally Megara by stationing ships to block its ports, preventing trade. For centuries, this required military power to enforce geographic choke points, such as the Strait of Hormuz, through which 20% of the world's oil and liquefied natural gas flows.

Globalization in the 1990s changed this. The U.S. dollar became central to 90% of foreign exchange transactions, supply chains fragmented across countries, and economic interdependence created new vulnerabilities. These bonds, once seen as stabilizing, now form financial and supply chain choke points that can be weaponized without troops—just a presidential signature on sanctions or export controls.