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Edward Fishman, "Chokepoints: American Power in the Age of Economic Warfare" (Portfolio, 2025)
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- [00:00]
Edward Fishman
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Edward Fishman
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Marshall Poe
Hello everybody, this is Marshall Po. I'm the founder and editor of the New Books Network. And if you're listening to this, you know that the NBN is the largest academic podcast network in the world. We reach a worldwide audience of 2 million people. You may have a podcast or you may be thinking about starting a podcast. As you probably know, there are challenges basically of two kinds. One is technical. There are things you have to know in order to get your podcast produced and distributed. And the second is, and this is the biggest problem, you need to get an audience. Building an audience in podcasting is the hardest thing to do today. With this in mind, we, we at the NBM have started a service called NBN Productions. What we do is help you create a podcast, produce your podcast, distribute your podcast, and we host your podcast. Most importantly, what we do is we distribute your podcast to the NBN audience. We've done this many times with many academic podcasts and we would like to help you. If you would be interested in talking to us about how we can help you with your podcast, please contact us. Just go to the front page of the New Books Network and you will see a link to NBN Productions. Click that, fill out the form and we can talk. Welcome to the New Books Network.
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Alfred Marcus
Welcome to the New Books Network. I'm Alfred Marcus, professor of Strategy and Technological Leadership at the Carlson School of Management, University of Minnesota. On this podcast, we explore the space between strategy and how people pursue advantage while confronting moral choices. Today, I'm joined by Edward Fishman, one of the most experienced practitioners of economic statecraft. He served on the State Department's Russia and Iran sanctions team, has advised senior leaders from the Secretary of State to the Chairman of the Joint Chiefs of Staff, and now teaches at Columbia University. His new book, American Power in the Age of Economic Warfare, tells the inside story of how the US Came to rely on sanctions, export controls, and financial restrictions as tools of power, and how these choke points in the global economy now shape geopolitics. So let's start with your background. Eddie, and I may call you Eddie.
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Edward Fishman
Please do.
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Alfred Marcus
You've been inside the Situation Room and the Treasury, State Department machinery. How did these experiences inspire this book?
- [03:27]
Edward Fishman
Sure. Well, Alfred, thank you so much for having me on the show. My experiences working in the US Government are the direct inspiration for Choke Points. My book, and it really actually goes back primarily to 2014, in the weeks and months following Russia's first invasion of Ukraine, when Russia annexed Crimea and initially invaded the Donbas in the winter and spring of 2014. And I remember the conversations we had in the Situation Room vividly in that time. And there's always two major topics. The first topic was, well, what do we do in terms of providing any military assistance to the Ukrainians? Should we provide them Javelins, for instance, or military training? And then the second question was always about sanctions. It was, how do we apply economic pressure to Russia to see if we can actually build some leverage over Putin and potentially get him out of Ukraine once and for all? And when we talked about the first topic, which is military assistance, really everyone around the table, whether it was the Joint Staff or the Office of the Secretary of Defense or the CIA or the State Department, everyone came extremely well briefed with very passionate, well informed opinions, and we had very intense debates, frankly. And ultimately, President Obama decided not to provide military assistance to Ukrainians. But ultimately, I think it was a very productive dialogue. But when we would talk about the second topic, which was sanctions, and that ultimately did become really the centerpiece of the US And European response to Russia's invasion of Ukraine, frequently the discussion would kind of just go silent and maybe you'd have one or two people around the table who felt like they had the requisite knowledge and understanding of the international financial system to really weigh in in a constructive manner. And I came out of that experience honestly concerned that the US Was relying increasingly on tools of economic statecraft like sanctions and export controls to advance its most important foreign policy priorities. And I didn't feel like even at the center of power, we had enough understanding of how these tools work to make the most informed strategic choices. And so after leaving government, I started teaching at Columbia, where I've been trying to train the next generation of practitioners in economic statecraft. But after the 2022 even larger scale Russian invasion of Ukraine, a number of my students said, professor, it's great that you teach us this, but you got to scale this message to a much bigger audience. So that's when I started working on choke points. And really my number one goal for the book is really to demystify economic warfare for as broad of an audience as possible. This is not a book for specialists. It's not a textbook. It is a book that I'm hopeful that any informed citizen can pick up and read through and find that when they're done with it, they have a much better sense about how tools like sanctions and export controls work and feel like they can weigh in constructively in the debate.
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Alfred Marcus
Statecraft is really winning without fighting. That comes from a quotation from Sun Tzu. Right. And so right now, how would you, what are you hoping to do to influence the debate? Currently?
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Edward Fishman
Totally. So, look, I think, you know, one thing that I think is it's not always easy for the general public to understand, but becomes much clearer when you're a practitioner, is that oftentimes when you're creating foreign policy, you're choosing between bad options. We've seen in the earlier part of the 21st century the drawbacks of the use of military force. Right. The US invaded Afghanistan after 9, 11 to try to uproot the Taliban and ultimately prevent them from harboring terrorist groups. And here we are, you know, 25 years later, almost, and the Taliban are back in power in Afghanistan after, you know, massive investments, loss of life, you know, a multi decade commitment. The Bush administration also launched an invasion of Iraq to overthrow Saddam Hussein, ostensibly to get rid of weapons of mass destruction. Well, we found out he didn't have any weapons of mass destruction. And again, this became quickly a quagmire. And so the way I view economic warfare, when done correctly, is that it can be an alternative to military force. It doesn't mean it's going to work every time, but when it's deployed, hugely, you actually can advance really important national interests without putting American soldiers in harm's way. I would posit that probably the biggest success of American economic statecraft of the last 20 years was the Iran nuclear deal of 2015. And while the deal itself had critics, particularly on the right side of the political spectrum in the United States, the thing that's interesting if you look at the debate was the Obama administration and Democrats cited sanctions as the key to getting the Iranians to agree to a nuclear deal, whereas the criticism from Trump and Republicans was that sanctions were working so well that if we had only applied more sanctions and for longer, we would have gotten an even better deal. And so basically, both sides agreed that sanctions had worked, that sanctions had actually created a peaceful pathway out of the Iran nuclear crisis. And I think that when deployed effectively, that's the type of opportunity you can present for yourself. One other point, though, because sometimes I'm asked, well, look at Russia, right? We have all these sanctions on Russia, and Putin hasn't agreed to leave Ukraine. That is a maximalist objective, right? Obviously, if you can use economic pressure to actually coerce a foreign country to do something it otherwise wouldn't want to do, that's fantastic. And that's not going to happen frequently. When it does, you got to be very grateful. But I think what you have to ask, and the relevant question as a strategist is, well, what's the alternative? What if we had done no sanctions on Russia? How would Russia's economy be doing right now if they had unfettered access to the US Financial system, if they could buy technologies from Silicon Valley companies, A. I think it's pretty clear that their economy would be doing quite a bit better than it is today. And then balance, I think they'd be much more effective militarily. And so I think that even when you don't achieve your maximalist objectives, sanctions and other tools can at the very least hinder the abilities, the capabilities of adversaries like Russia.
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Alfred Marcus
You're saying essentially that in some instances it's more effective, in some instances it's less effective. What differentiates those two conditions? So the Iranian sanctions, you're saying were generally recognized as being more effective as opposed to the Russian sanctions. Is it because the Russians were able to get around the sanctions, or what makes that difference?
- [10:03]
Edward Fishman
Yes, I think when you think about the effectiveness of sanctions, you really have to separate it into two categories. I think the most important question really is are sanctions advancing a noteworthy policy goal? Right. And that policy goal could be something really ambitious, like we want to build so much economic pressure on Iran that we actually lead the political class in Iran to agree to negotiate away the nuclear program in exchange for economic relief. There are Less ambitious goals than that, though, right? Some goals could be just, we want to weaken Russia's economy because Russia is an adversary. And to the extent that its economy is robust and growing, that's bad for international peace and prosperity because Putin is taking his economic growth and translating it into military strength. With China, for instance, the primary goal of export controls under the first Trump administration and the Biden administration has been to cut off China's access to frontier technologies like advanced semiconductors from Nvidia, for instance. And the goal there really is to ensure that US Companies have a lead over China in artificial intelligence and other military relevant technology. So I think that the first test is based on the goals that you're setting out for your policy. Is it advancing those goals? I think the second and more basic question of effectiveness, which is slightly different, is are the sanctions actually having an economic impact? Are they producing the economic pressure that you're hoping it to? A core thesis of my book Choke Points is that because of the nature of the integrated global economy, in particular the financial system where 90% of all foreign exchange transactions are using the dollar on one side of that trade, the US does have control over very important parts of the global economy and can use that to incredible benefit. Right. Impose very significant economic pressure on basically any other country. When it comes to Russia, Russia has suffered quite a bit economically. To the extent that it's sort of chugged along. That has not been because the Russians are magicians and have figured out some magical way of evading sanctions. It's really because the U.S. both under the Biden administration and now under the second Trump administration, has refrained from targeting the most important sector of Russia's economy, which is its oil sales. Right. So Russia's main export is crude oil. Second after that is natural gas. And both of the past two US Presidents have been very nervous about targeting those exports for fear of potentially raising energy prices for Americans and potentially worsening inflation.
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Alfred Marcus
And do they also worry about Europe? I suppose that's part of the equation or less.
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Edward Fishman
So, yeah, I think Biden worried about Europe a little bit more than Trump does. So, yes, I think for the Biden administration, retaining unity with the Europeans was. Was paramount. I think Trump, you know, I think maybe has a little bit less, you know, of a sympathy for the Europeans. I think he's very interested in potentially selling more American natural gas to Europe. I think the other important point, though, is that, you know, if you look at the context in 2022, when the Biden administration started its sanctions campaign, you know, we did have oil prices at the time well over $100 a barrel. We had inflation over 7%, which was the highest it had been in the United states since the 1970s. And so I think there actually were relatively well justified considerations for the Biden administration in 2022 to be quite cautious when it came to potentially bringing Russian oil supplies off of global markets. You know, today the circumstances are completely different, right? You've got oil prices in the low 60s where most forecasts suggest that they could be even in the 50s or 40s next year. So we've got an oversupplied global oil market. And inflation, of course, has come down. It's much more under control today than it was in 2022. So I think right now the Trump administration has actually quite a bit of flexibility to target Russian oil sales. I think the Europeans actually would be on board for it. You know, the Europeans, interestingly enough, have been more hawkish, frankly, than the United States has been on Russia sanctions. And I think that's partly because they feel viscerally threatened by Russian imperialism because it's right on their doorstep, whereas we in the United States are an ocean away. So I think really right now, the biggest thing blocking these potential effective sanctions is this Trump's own reluctance to turn the screws on Moscow.
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Alfred Marcus
But what about the. I think, as I understand it, the Russians have been able to get around this great deal by somehow selling to China and to India in particular. And that's. Have they been able to effectively get around the sanctions and speak a little bit about that.
- [14:49]
Edward Fishman
So it is true that Russia has redirected its oil sales from Europe primarily to India. China has always been a big customer. So they've taken on more oil. But, you know, it's really, India is the, the bigger, the, the biggest new customer for Russian oil since 2022. So that's actually not getting around the sanctions. There are no sanctions on Russian oil sales to India or China. To, to actually impede those types of sales, you would need what's called secondary sanctions, where you would be going to oil refineries in China and India. Banks, they're processing payments as well as oil traders in places like the United Arab Emirates and basically threatening them, saying, if you keep participating in the Russian oil trade, we, we will sanction you, you will be cut off from the US Financial system. That is how the United States successfully curtailed Iran's oil sales in 2012 and 2013. I was actually part of that effort. I used to go to countries around Asia talking to oil refineries and shipping companies and banks and effectively threatening them and saying if they continued doing business with Iran, they would lose access to the United States. That kind of sanction, these secondary sanctions, has not been applied to Russia. So when Russia is selling oil to India or China, they're doing so because that's just allowed there. There's, there's a green light. And in fact, during the Biden administration, the United States actively encouraged India to buy more Russian oil because, as discussed earlier, given the tightness of oil markets in 2022, there were concerns that if Russian volume, if barrels of Russian oil were to come off the global market, you know, you reduce supply. If demand stays the same, prices are going to spike. And so there was a desire actually for India to kind of be the buyer of last resort. And I think that's why right now the Indian government is so frustrated with the Trump administration, because Trump has erected these additional tariffs on India ostensibly for buying Russian oil. And the Indians are saying, well, hold on a second. You know, the US Government's been telling us to buy Russian oil. And they're right. They have a good point. When, when they say that, does it.
- [16:48]
Alfred Marcus
Lower the price of the oil, though? I mean, are, are they selling. I think the Iranians are selling their oil and trying to get the sanctions at a much lower price. How does that work?
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Edward Fishman
Sure, yeah. So both Russian and Iranian crude are sold at discounts, but that's, again, it's not, it's not. This is really all about supply and demand. You think about it, you know, if. If the Indians and, and the Chinese are your only potential customers for oil and you can't sell, you know, there's lower demand for your barrels than there is for Saudi barrels. Right. So even though the molecules within a barrel of Saudi oil and Russian oil are effectively the same, there's lower demand for the Russian barrels because some countries, like the US And Europe have embargoes. They won't buy it. So it's basically just the economic logic of supply and demand. When it comes to an oil refinery, though, so a refinery in China and India that are going to buy crude oil on the open market, refine it into products like gasoline, and then sell that. If you can buy the crude at a discount to global benchmark prices and then sell the refined products like jet fuel or gasoline at market prices, you've got a great margin that you've just been able to pocket. Right. So they really are being, you know, the Chinese and Indian refiners are really motivated by very basic economic logic. They're not doing some geopolitical favor for Russia. They are literally just taking advantage of an arbitrage opportunity that exists in the market.
- [18:08]
Alfred Marcus
Interesting.
- [18:09]
Edward Fishman
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Alfred Marcus
So you talked also about the fact that United States most transactions are conducted in the dollar. That's a form of sanctions. And the and with regard to oil you've been talking about. What else? Tell me a little bit more first about the dollar. How does the control of the dollar really have a role to play in the imposition of sanctions?
- [19:57]
Edward Fishman
Sure. So the dollar is the most important choke point in the global economy and that's why the US has been the principal and most powerful user of economic sanctions in the last several decades. So I think it's commonplace to know that the dollar is the global reserve currency, right? And it's true that 60% roughly of all central bank reserves are held in dollars US Dollar assets. But I think when people say that the dollar is the global reserve currency, what they really mean is that the dollar is the dominant currency across really all use cases of money. It is the preeminent store of value, it is a preeminent medium of exchange, and it's the preeminent unit of account. So when it comes to store value, we mentioned central bank reserve 60%. But you just look at equity markets globally or debt markets, the dollar is at least 70% of the overall value of those markets globally. So generally speaking if you're generating hard currency and you're investing it somewhere, chances are you're investing in some kind of dollar asset, be that equity or debt. But then when it comes to medium of exchange payments, this is actually the part that's even more important when it comes economic sanctions. Because given the way that foreign exchange markets work, I mentioned earlier that 90% of all foreign exchange transactions involve the dollar on one side or the other. And that is a $7 trillion per day market. It's by far the biggest financial market of them all. What that is telling you is that even when two non US companies are dealing with each other, whether it's an Indian company buying oil from Saudi Arabia or a Brazilian company investing in in Japan, those cross border flows are going to go through the dollar. And that's because if you just think about it logically, it wouldn't make sense for every single bank around the world to hold every single type of currency that they might encounter. And so the normal strategy is you have deposits in your own home currency. So if you're a Saudi bank, you'll have deposits in Rials. And then you also have significant correspondent relationships that give you access to dollars. And so if a Saudi a company needs to exchange Rials for Indian rupees, what they're actually doing underneath the hood is taking their real, their real money trans. Yeah, trading that for dollars and then trading the dollars for rupees. And so the dollar basically serves as this intermediary currency in most cross border investment and trade flows. And as a result the US government can impede transactions that seemingly have no US access to them. They do again because of the dollar being involved. But this is what ultimately gives America this incredible power to impose financial sanctions.
- [22:36]
Alfred Marcus
How does the United States actually impede the transactions then?
- [22:39]
Edward Fishman
With, yeah, so the correspondent accounts that these banks hold are in New York. Right. So it's not like they have dollars that they're holding at their own balance sheet. They have a relationship with Citibank or JP Morgan that will have a bank account on their behalf that where they basically have their dollar holdings. And so if the US then says well guess what, you can't do a business with them, then there's no way for you to get through the dollar.
- [23:05]
Alfred Marcus
So the dollar is a major way of using economic warfare. What are the other means? The other means that the United States or any country might use?
- [23:17]
Edward Fishman
Yeah, sure. So I think this is the concept of choke points, just to quickly define what they are. They're parts of the global economy where one country has a dominant position and there are few if any substitutes. So we've talked about when it comes to payments, there's no substitute for the dollar. Right. So if you don't have access to the dollar, it's going to be way more costly, a lot more friction for you to do any type of international business, others that the US Controls. I think probably the second most important after the financial system is really high end technology. If you look at, for instance, Nvidia's share of the most advanced semiconductors, AI chips, it's something like 75, 80% of those chips around the world are being made according to Nvidia's designs. If you look at things like the global cloud computing market, aws, which is Amazon Web Services, or Google Cloud, and Azure, which is Microsoft's cloud company, have a massive amount of global market share. And even if you look at the computer chip industry broadly, you know, 40% of the total value of that industry globally is, is contributed by US Companies. And so technology has been able to give the US an incredible choke point that it's used against China, Russia and other countries. I think what we're seeing now though, Alfred, is that as the US has popularized economic warfare over the last couple decades, other countries really have started emulating the United States. And we have something like an economic arms race going on right now. And I think we saw a vivid example of this in the spring of 2025 when China cut off exports of rare earth minerals to the United States. And that ultimately was the winning card in their trade conflict with the Trump administration earlier this year. And that's because when it comes to rare earth minerals, about 90% and sometimes more of those minerals are processed by Chinese refineries. And so China does have this chokehold over rare earths. And they can weaponize it the same way that the US Weaponizes the dollar or semiconductors.
- [25:28]
Alfred Marcus
If you would look at the main countries where we're imposing sanctions right now are Iran, Russia and China, is that correct? And so if you would, I don't know, are there other countries? But I would, if you would rate those countries, I would think China has the most ability to counter America's use of choke points against it. Is that also true? And I would also think that the Chinese actually have a Lot of leverage vis a vis the United States right now. How would you. Yeah, it's all.
- [26:03]
Edward Fishman
You're right. Yeah. You know it. You, You. You hit the nail on the head. I think that the sanctions on Iran are by far the most comprehensive of those three, followed by Russia, which is not quite comprehensively sanctioned, as I mentioned earlier. There are still quite a number of gaps. And then China, the sanctions on China are quite mild. They're really primarily export controls on very specific technologies. And then, of course, the tariffs that Trump has put in place. But I think part of that is driven by the fact that China has significantly greater retaliatory capability. And so US Presidents have been unwilling to. To go further than that. But I think probably even more, A more basic reason is that, you know, the more interconnected the US Economy is with another country's economy, you have to also think about just blowback from our own measures. Right. That we may not be having ACE doing asymmetric harm. Right. If we impose significant export controls on China, yes, this will constrain Chinese tech companies from having access to the best Nvidia chips, but it also cuts off Nvidia from a giant market. Right. There's a market where they could be making billions in dollars of revenue every single year that they might not be able to sell into. And that's actually the argument that the Nvidia CEO, Jensen Huang, has made in recent months and why he persuaded the Trump administration to allow Nvidia to sell some more semiconductors to China. Because he basically said, look, if we can't sell to China, a, we're losing money, so it's bad for us. But B, these Chinese AI labs do need to buy chips from someone. And so if not for us, they're going to buy from Huawei, our main Chinese competitor, basically gives them demand for their product, and it kind of creates a flywheel where we may inadvertently create a competitor to America's chip champion.
- [27:53]
Alfred Marcus
I think that's the general threat of all these sanctions, is that the Chinese will just become more independent of the United States, and then the sanctions will have very limited use. Is that more or less correct? Or. I mean, I guess, yeah.
- [28:07]
Edward Fishman
Look, I think the reason why the. The reason why we are living in an age of economic warfare, and that is the. Again, another core thesis of my book Choke Points, is that we are living in an age of economic warfare that really started early in the 21st century and has only accelerated since. This is all because of hyper globalization. It's because in the 1990s, we moved into an incredibly integrated financial system, integrated supply chains. Right. And that is what created these choke points to start with. Well, if we have fragmentation, if the US and China become effectively mutually independent spheres, kind of the same way that the west and the Soviet Union were during the Cold War, then we'll have a lot less economic leverage over each other. And there's a world where maybe that's a good thing, maybe that that reduces tensions because we're no longer worried about sanctioning China and vice versa. But there's also a world where that just means that our competition is channeled into other domains. And I worry that the alternative to economic war might not be peace, but rather more military warfare or cyber war or things that might actually affect American people and Chinese people even more viscerally than the current trade and economic conflicts.
- [29:23]
Alfred Marcus
But there's a long history of this, especially during the first 50 years of the 20th century, and could comment a little bit about that. Like leading up to the Second World War, the Germans wanted economic independence because they knew they were heavily dependent. The Japanese, that may have been one of the main causes of the Japanese invasion is their concern about their dependence upon oil supplies from the US So this is not necessarily new. Maybe give some of the historical background as well.
- [29:54]
Edward Fishman
Yeah, no, you hit the nail on the head. And look, I think, you know, my book Choke Points is first and foremost a narrative history, right? As you, you said sort of an insider perspective explaining exactly how we got from kind of the win, win globalization of the 1990s, where, you know, Thomas Friedman and others talked about the world being flat to the age of economic warfare of today. And yet I also do seek to provide some, an explanatory framework for this to try to understand exactly what is driving this process. And ultimately I came up with this framework that I call the geoeconomic impossible trinity, in which you have three geopolitical competition, economic interdependence, and economic security, in which only two can coexist at once. And so just to kind of give an example, during the Cold War, as discussed earlier, you obviously had fierce geopolitical competition between the west and the Soviet Union, but you didn't really have any meaningful economic interdependence. And so both sides felt a sense of economic security. Right. The Soviet Union wasn't worried about big sanctions on them by the US and we weren't worried about that in the reverse then, when the Cold War ends, we no longer have any meaningful geopolitical competition. You know, the US views China and Russia more as potential friends than Ominous rivals. And so we feel free to embrace economic interdependence without losing our sense of economic security. We can be dependent on supply chains in China or energy from Russia, because we're not worried about them weaponizing this against us. They're our friends, right? But what we have now and what's really developed over the last decade or two is that geopolitical competition has come back with a vengeance, but economic interdependence persists. And so we've lost our sense of economic security in the United States, but it's also true in China or Europe or Russia. And so right now, we are in this process where leaders around the world are coming up with their own policy formulas for how to regain that sense of economic security. One way of doing so is through pursuing something that looks like autarky, right? Trying to do as much as you possibly can at home. There's another model where it's what you would call maybe friend shoring, where you sort of reduce your dependence on certain countries. Maybe the US Isn't quite as dependent on China for its supply chains, but we actually increase our interdependence with countries like Canada or the EU or Japan. To your point about the 1930s, I think at that time, it was really the autarky model that was en vogue, right? Countries were saying, we don't actually want to form alliances with friendly countries. We just want to do everything we possibly can at home. And I think the downside of that perspective over time, it's not just so much that it's economically inefficient, which any of my economist colleagues will tell you, that autarky makes no sense. The thing I worry about, as somebody who really comes at this primarily from a geopolitical angle, is that this also, generally speaking, incentivizes imperialism and conquest. Because if you only feel confident that you can control resources, if you literally own the territory, you're going to want more land, right? And I worry about that when you hear some of President Trump's rhetoric around Greenland, right? He talks about, you know, well, we need Greenland for its mineral resources, right? I think most presidents of the 21st, second half of the 21st century would say, well, we need Greenland's mineral resources. Let's make a trade deal with Denmark, and let's actually get tariff. You know, we'll be able to import those mineral resources tariff free, right? Trump's mindset, which is more of this autarky mindset, is we need to control the territory or else we can't control the resources. And so I do worry that the autarkic mentality over time could lead to more warfare.
- [33:49]
Alfred Marcus
It seems to me, though, that in the current global economy there's so much interdependence, especially with China, that it's really fundamentally different than the Cold War. And it makes our relations and even our conflict with China fundamentally different. And also, like large corporations today would seem it would be, it's so much in their interest, just in terms of expanding their markets and their supply chains, that they would want to have maintained relationships, especially with China, and that it brings them into friction with the political and security needs of the United States. So the whole situation seems very complicated compared to. It doesn't seem to be as if there's a good precedent for.
- [34:38]
Edward Fishman
Yeah, I mean, I do think, I do think probably the, the best precedent is, you know, the lead up to World War I and, and frankly the interwar period. And, and the reason I say it's the best precedent, I, I say it with some, some caution because it's, it's something we want to avoid. Right. We don't want, Scary. Yeah, we, we don't, we don't want to repeat those mistakes. But I think what we saw in that period is that economic interdependence which certainly was pervasive in Europe Pre World War I. I mean, honestly, a level of economic interdependence and in some ways dwarfs what we have today because not only did you have integrated supply chains and financial markets, but you actually had pretty much unfettered labor mobility, right. Where you could travel around Europe without a passport. And also, you know, Europe was these multi ethnic empires, so it was much, much larger sort of political entities than you have today. I think that what that showed is that economic interdependence does not necessarily prevent conflict. Right. And in some ways it can actually increase the possibilities of conflict if there's more and more friction among, among economic partners and trading partners. And so I do think we're in a bit of uncharted territory. I think that what we learned in the spring when Donald Trump imposed 145% tariffs on China, and China retaliated with its own tariffs as well as its export controls and rare earths, is that at least in the United States, there's a political limit to how quickly we can decouple from China because we have such a big relationship with them, 500 to $600 billion in bilateral trade every single year, that if we tried to decouple overnight, if we tried to bring that from 600 billion to zero in a few months. The economic pain would be so acute in the United States that it's just politically impossible, honestly, for any president to do that. And so I think what it means is to the extent we are going to reduce some of our interdependence with China, it has to be much more selective and gradual, I think, than Trump initially had in mind.
- [36:41]
Alfred Marcus
And they own so many US Bonds too. Isn't that another way they could retaliate? That could be very devastating, I think.
- [36:49]
Edward Fishman
And yeah, and they've, they're still, I mean, they've reduced their holdings quite a bit, but they're still the largest holder of U.S. government securities, foreign holder. And so, yeah, they could, you know, create a fire sale if they really wanted to flood the market. I mean, that would be bad, of course, for their own, you know, themselves. So in some ways it's a mutually assured destruction, but that doesn't mean they wouldn't try.
- [37:09]
Alfred Marcus
I think on the agricultural front right now, there's a real problem too, because the American. I just read this article in the Wall Street Journal that the American farmers have had bumper harvests of corn and soybeans, but the Chinese are not buying them, I think, virtually at all. So they're sitting in storehouses. They're buying mainly from Brazil.
- [37:27]
Edward Fishman
Yeah, the Brazilians have gotten tariff by 50, 50% tariff. They're under the biggest tariff of any country. And yet their trade is expanding because they're selling more to China.
- [37:36]
Alfred Marcus
Yeah, it's pretty amazing. So we focus a lot about. On China. What about Ukraine and that whole. The Russian side of it could do because we're less intertwined with Russia. Does that mean that ultimately we have. Tariffs have left of an impact, or do they. I mean, the main impact, as you were saying before, is spoil. Is there any other way we can affect Russian behavior?
- [38:03]
Edward Fishman
Sure. Yeah. So tariffs, I don't think, have any real applicability to Russia at this point. We've got $2 billion of bilateral trade. It's effectively nothing. Right. The key right now is that Russia is still selling 5 million barrels of crude oil every single day and another two and a half million barrels of petroleum products on global markets. And those are areas where the US Actually does have quite a bit of leverage because the buyers are Indian refineries, Chinese refineries, and Turkish refineries. And they're paying Russia for those barrels using the international financial system. And so very easily the US could go to big Indian refineries, all of whom, by the way, have, have U.S. investors they, they're getting debt from the U.S. they have $ denominated loans and say, look, if you keep buying Russian oil, you're going to be cut off in the US Financial system. And what that does is it makes it a business decision. If you're an Indian refinery who had been benefiting from the arbitrage we talked about earlier, you say, well, look, we made some good money over the last three years, but we don't want to risk losing access to the US Dollar. And so that is, that is kind of the trump card the US Holds. We haven't been willing to use it. You know, Trump instead, I think has done these, what he's called secondary tariffs, where he's put some tariffs on India instead of threatening sanctions against the refineries. And to me, that, that approach makes very little sense because the tariffs don't affect the refineries at all. They're really affecting totally unrelated Indian exporters like, you know, shrimp farmers and textile mills. And, and, and honestly, I, I just don't see how that translates into India buying any less Russian oil.
- [39:40]
Alfred Marcus
What is the reluctance of the US Then now to actually go the next step and work against the refiners themselves?
- [39:51]
Edward Fishman
Yeah, I think a big part of it is really Trump's overall reluctance to put pressure on Russia since the beginning of his term. So since January 20th of 2025, the US has imposed a grand total of zero new sanctions on Russia. And that was after thousands and thousands and thousands of sanctions in the three years beforehand, during the last three years of the Biden administration, following Russia's February 2022 invasion of Ukraine. You know, and just to again put some numbers on this, I mean, from February 2022 to January 2025, the US turned out roughly one new package of sanctions on Russia every single week. And a package could include sometimes hundreds or, you know, even more sanctions within one of those packages. And again, since Trump has come in nine months ago, we've had no new packages of sanctions on Russia. And so he's really changed US Policy. And I think that really comes down to his feeling that, you know, I think he sees this war not as clear eyed as others do, where they see very clearly that there's an aggressor, which is Russia, and a victim, which is Ukraine. I think he in some ways has been sympathetic to the Russian side and he's been unwilling to increase pressure on Russia at all. And so I think that the reluctance then to go the next step in terms of oil sanctions is just of a piece of his Broader policy on.
- [41:08]
Alfred Marcus
Russia is that well known, I mean, to the Ukrainians and the Europeans and the media. Have they. I haven't really. That's a great question.
- [41:16]
Edward Fishman
Honestly. It's a really good question. You know, the New York Times and the Washington Post have run stories on this recently, and certainly the Ukrainians and the Europeans know it well. But I will credit, honestly, the Trump administration for successfully muddying the media narrative in that. I think that, you know, he. Trump now, I think, on four or five different occasions has said, we're going to be really tough on Russia if they don't agree to a ceasefire. And the media covers that in some sort of a frenzy. And then Russia doesn't agree to a ceasefire. Trump doesn't do any new sanctions, and the media doesn't cover that. They just kind of forget about it. And so it's a great. I'm glad you're bringing this up, Alfred. I, I think that this is. It's strange. One thing I will say that I find kind of interesting is y. I spoke at this conference of the association of Certified Anti Money Laundering Specialists. It's called acams. It's actually the biggest gathering of sanctions compliance officers in the world. About 10,000 people in Las Vegas. And those people who, every day, their job is literally just complying with the specific regulations coming out of ofac, you know, the Treasury Department, and don't maybe pay as much attention to the media narratives for them. They know, they're like, okay, the US has halted Russia sanctions because they know. They see the regulations coming out. They've seen no new sanctions in the last nine months. But I think if you're talking to people who are just sort of more casual observers, it's not a very well known fact.
- [42:38]
Alfred Marcus
Well, I don't think it is well known. I'm going to go back to China just for a minute, and then I want to also speak a little bit about Iran, but. And then we'll let you go. But like, my students just talked a lot about tech. TikTok. I don't understand TikTok because I'm too old. And then there's Huawei. I think I understand Huawei is a threat, but why is TikTok a threat and it's Huawei? I mean, is Huawei really a threat?
- [43:08]
Edward Fishman
Yeah, I think both of those companies unabashedly are threats. I can talk about them because they're different. Right. I'd say, you know, Huawei is really the. Has kind of become like the national tech champion of China. Right. So they started off really, as a telecommunications equipment maker, they make 5G networks or telecom networks around the world. And the concern, the national security concern around that is, well, if Germany's telecom infrastructure is built by a China, a company that's beholden to the ccp, then effectively China could manipulate that infrastructure. Right? They could shut it off in a crisis. They could spy on German communications. This was, by the way, many US mobile carriers were using Huawei systems until relatively recently. And so I do think it's. Huawei's telecom gear is a national security threat.
- [44:02]
Alfred Marcus
So that's realistic. I mean, for sure. Okay.
- [44:05]
Edward Fishman
Yeah. I mean, and I think, you know, this was publicly reported that, you know, cell towers in the Middle east that were. Or in the American Midwest that were using Huawei gear could potentially interfere with American command and control of nuclear weapons. Right. So, I mean, it's a very serious vulnerability. And I think the challenge, of course, is that the commercial alternatives, you know, Ericsson and Nokia are. They're not as good and they're more expensive. Right. And so in some ways this has been a failure of American economic management where we didn't know, you know, we didn't. We allowed too many of the, you know, the other companies to sort of die on the vine. We've allowed a Chinese industrial policy to sort of, you know, carry the day. I mean, now Huawei is expanded into many other categories. Right. They're also now the biggest AI chip designer in China, so they've got a subsidiary that's competing with Nvidia. Right. So, you know, could that company then, you know, be a challenge? I mean, so, yes, I think Huawei really is a threat, particularly on its telecom side. TikTok's a little different. Right. I think the, the threat about TikTok is that I think you've got 150 plus million Americans who are using this thing, including most American teenagers. And so if this is an algorithm that's controlled by the ccp, I mean, they're dishing out the information flow that our teenagers, you know, so this is propaganda. Propaganda and then spying, Right. I mean, people communicate on TikTok, right? So are they. They're building these incredibly detailed psychological profiles of our youth here in the United States. I think that that's something that me as a parent, I don't feel very comfortable with. And certainly if my children wanted to have TikTok on their phone, I would be. Probably put my foot down, really.
- [45:47]
Alfred Marcus
Okay, so what about Iran? I mean, I have no sympathy at all for the government of Iran, but the people of Iran seem to have also suffered as well because of the sanctions. And because of their suffering, do they end up blaming the United States? Do they end up blaming their regime? Does that go against the effectiveness of the sanctions? The fact that the entire economy, I think, is hurting? I think that is true, that the Iranian economy is being hurt quite substantially by this sanctions. Yeah.
- [46:27]
Edward Fishman
So look, the concept that sanctions are going to hurt elites and hurt leaders more than average people is totally a myth, right? I mean, sanctions always are going to affect regular people, middle class, poor people, more than the elites, more than leaders. And I think what that should give us is a sobering reality about we should be using these tools only when there's a vital US national security interest at stake. And we should be using it very judiciously because certainly even when they are justified, you're going to sow anti Americanism, you're going to hurt innocent people, you're going to lead to a rally around the flag where maybe some people wind up actually closing ranks with the regime. So you've got to be very careful. I think we've gotten way too sanctions happy in the United States. I think the Iran nuclear deal in some ways shows how this can work. Right. So the president of Iran from 2005 through 2013 was a gentleman named Mahmoud Ahmadinejad, who was a radical hardliner, very much in favor of a nuclear program, routinely threatened the existence of Israel. And it was really during his presidency that sanctions really ramped up and Iran went into a major economic crisis. Well, in 2013, when there was a presidential election, one candidate, Hassan Rouhani, came out and said, we need to negotiate on the nuclear program because we need economic relief. And that was a winning message. He actually won that presidential race in a field of eight candidates. He won 52% of the vote just on that message. And I think that is why ultimately, I think the Obama administration, once Rouhani came in, saw it as an imperative to get a nuclear deal. There was a political opening. There was a guy who genuinely wanted to make this deal for deliver economic relief. And I think it's also why there was concern that John Kerry, the Secretary of State, had that Iran actually should get some economic relief because if they cut a nuclear deal with the US but then they didn't get economic relief, it would discredit the peace party, it would discredit Rouhani and the folks who actually voted for that, and maybe lead to the hardliners coming back. And so I do think you have to be very judicious about These uses of sanctions, and you have to find a way to actually make it politically possible for the other side to make a deal.
- [48:55]
Alfred Marcus
So how would you change the Iranian sanctions? And how would you arrange them so that they hit the elites as opposed to. Is there a way to do. Can you be that refined in the use of these sanctions?
- [49:05]
Edward Fishman
No.
- [49:07]
Alfred Marcus
So it's really. It's just hard or soft. Hardness and softness.
- [49:11]
Edward Fishman
Look, you can be. I mean, here's the truth. Can you just do purely symbolic sanctions where we're just going to sanction Putin himself and Putin's, you know, friends and his kid or something like that? Yeah, you can sanction them individually and it'll make you feel good because you're saying, I've sanctioned some. The Russian leader, I sanctioned Ayatollah Khamenei, and guess what? It's going to have absolutely zero impact on their lives. And so what it will do is it'll make us maybe feel good for a minute. But the signal that it sends to Russia is weakness, because it sends to them. All we're willing to do is effectively a slap on the wrist, you know, a pro forma type of penalty. The only types of sanctions that really break through are when you go after the commanding heights of the economy. And if you're an energy. If you're an energy producer like Russia, it's the energy sector, it's always the banking sector, because that matters in every country.
- [50:02]
Alfred Marcus
So those. Those are sectors where the elites are affected more directly in their own interests, their own personal interests. In Russia's case, I would.
- [50:11]
Edward Fishman
Yeah, but even then, I mean, look, the. The oligarchs in Russia have billions and billions of dollars. Right? So. But when you hurt them, I mean, sure. Could you reduce their net worth from 5 billion to 2 billion? Maybe? Is that going to do anything to change Russian policy? Consider me skeptical. So I am. I just. I'm very, very skeptical of the idea that at least when it comes to major geopolitical issues like Russia's invasion of Ukraine or Iran's pursuit of a nuclear weapon, I'm skeptical that you can actually modify policy by virtue of hurting elites. I think, look, there are very specific cases, maybe where it involves, you know, drug cartels or people who, you know, are really just economic actors. They don't have a geopolitical motive where maybe, you know, this. This can work sort of individualized sanctions on a drug kingpin or something like that. But when it comes to, you know, state actors, I'm quite skeptical.
- [51:09]
Alfred Marcus
What about, like, two more questions? I promise for having a tune in. But what about, like, American business executives? I just did a podcast with a historian who did a very long, detailed study, very interesting, about how American business leaders have been supportive of free trade going back to the period right after the Second World War. And they understood how lack of free trade, free trade contributed to the Great Depression and some of the conditions that led to the Second World War. I think that the American businesses as a whole have benefited from free trade, and most of them should be free traders if they think of their economic interests. So how do they deal with this environment? And I guess the. The related question is economists, because economists, by the very nature of our understanding of economics, means free trade should be in the benefit of us all. So. Yeah. What's your view on that?
- [52:19]
Edward Fishman
Yeah, look, I mean, over the course of my book tour for the last eight months, I've spoken to dozens of business audiences around the country, around the world, and they're all grappling with this question, how do we comport ourselves in this age of economic warfare? If you go back to my geoeconomic impossible trinity, I personally believe that it is politically impossible for the United States to feel this shortage of economic security. I think we are going to need to reclaim that sense of economic security, and I think the likeliest way to do that is some level of reduced economic interdependence. So I think the companies that succeed today are going to be the ones that figure out how to reduce their dependence on geopolitical adversaries like China and Russia. The challenge, of course, is in the age of Trump, where are you safe? Right. Because Trump may sanction Europe or Canada or Mexico. Right. I think, you know, if. If under a different president, you know, most US Companies would say, okay, well, we can move our operations from China to Mexico or China to India. It's harder right now. And so I don't envy the position that these business leaders have. I think when it comes to economists, you know, economists sometimes get very frustrated because they say, well, this is what's economically optimal. We need as much openness as possible. Where I come from is I say, I agree with you, this is economically optimal, but it's also not. Everything is about what's economically most efficient. Right. Sometimes you actually have greater needs than economic efficiency, namely national security. Right. And I think if. If you're. If our sources of medicines, if our pharmaceutical supply chains are dependent on Chinese ingredients, and China could effectively cut us off from vital medicines in a geopolitical crisis.
- [54:07]
Alfred Marcus
That's a big one.
- [54:08]
Edward Fishman
Yeah. I mean, is it would we prefer to pay 15% more for our generic medicines but not be at the mercy of China? I think so. So I think sometimes it's not so much that economists are wrong, it's that there are variables that go beyond dollars and cents that sometimes frankly trump our economic incentives.
- [54:29]
Alfred Marcus
I mean, we're. I guess what you're saying is that we're inevitably in a period of deglobalization. We have to adjust. And we're also probably in a period of greater inflation because a lot of the suppression of inflation that has existed in the last 30 years or so has been a result our ability to get less expensive labor from China, essentially. So all of this is. We have to really adjust to a new world because this is a very fundamental factor in our need for adjustment and for companies. Adjustments.
- [55:09]
Edward Fishman
Yes. Look, I mean, this is a real major reason why I was so imperative for me to get choke points out there. Economic warfare is a baseline feature of our world. Right. And the sooner we accept that and we start readjusting our calculus around anything from our business decisions to our government policies, the better.
- [55:28]
Alfred Marcus
What are you working on right now? That's my last question. By the way. This has been great. We could go on for much longer. But I know both everybody's time is limited and our listeners time is also limited.
- [55:42]
Edward Fishman
Yeah, no, I appreciate it. I mean, I am spending a lot of my time right now having these types of conversations with audiences around the world. Right. So for everyone from business audiences to students to academics, talking to them about the age of economic warfare and its implications, when I do get a free moment when I'm not on the road and I can actually read, what I'm trying to understand really is some of these ripple effects. So I'm going deep on questions like de dollarization and the rise of digital currencies and stablecoins and alternatives to the dollar. I'm going deep on the bifurcation of global energy markets and what that means and China's domination of the clean energy supply chain. And then finally, I'm looking quite a bit at the rise of these parallel technology ecosystems where you have China increasingly going the other way from Silicon Valley, partly because of export controls, but also because China itself doesn't want to be dependent on US technology. So I'm really kind of trying to understand really this process of deglobalization what's actually going on underneath the hood.
- [56:42]
Alfred Marcus
I'd love to go further on all those, but I can't resist just on the first one because it's actually something I really have trouble understanding, the currency issue. So is it possible for the world to get off the dollar? And would. That would be. I mean, then all of our economic statecraft, essentially, or warfare, we'd have a lot less power.
- [57:05]
Edward Fishman
Yeah, it's possible. I mean, I, I think that we can't rest on our laurels. I mean, I, I want to be clear that the dollar's got quite a bit of an advantage here. I, I've went through its dominance across investments, payments, trade invoicing. So I don't, I don't think you're going to have one currency that displaces the dollar anytime soon. I think the, the greater threat is that on each of these different metrics, you have alternatives that kind of gradually chip away at the dollar is sort of dominance. So if you look at it as an investment currency or a reserve currency you've already seen in the last five years or so, gold proved to be a really significant alternative to the dollar. And where central banks are amassing gold at record rates, and then, you know, retail investors are investing in things like Bitcoin as an alternative to dollar assets. And then when it comes to payments, you know, this is a harder one, probably just a plant, but China has been advancing the RMB as a potential alternative. They've got their own central bank digital currency. And now you have these stablecoins, which are digital currencies that are pegged to the dollar and other fiat currencies, which potentially could change the game. I think my own take is it's not so much that the dollar is being replaced, it's that it risks erosion. And I also think we are at a pretty significant inflection point, particularly with the rise of digital currencies. And so now is the time really for the US to try to seize the mantle for the next international financial system, or else we might lose it.
- [58:30]
Alfred Marcus
Can we prevent this? I mean, the pound, I guess, was once the universal currency, and now it's, who cares?
- [58:36]
Edward Fishman
Yeah, no, I mean, can we prevent it? Yes. I don't think anything's inevitable. And I talk about in my book how, you know, in 1971 when Richard Nixon unilaterally took the dollar off the gold standard. Most people at the time, if you and I were having this podcast interview in 71, we'd say, oh, the dollar's toast, right? The age of dollar dominance is over. And yet it actually just served as the beginning of a new era of dollar dominance. And so I think that we have to kind of pull a similar rabbit out of a hat today to the one that the US financial community did post 71.
- [59:09]
Alfred Marcus
So this has been a great interview. It's very, very interesting and illuminating, and it's a tremendous book. It's really important for people to read it and understand it. And I think it is getting that kind of airing. So I want to really thank you, Edward Fishman, for joining me. Choke Points is a gripping account of America's economic arsenal and the dilemmas it creates for listeners. The book is Choke American Power in the Age of Economic Warfare, published by Portfolio Penguin. I'm Alfred Marcus, and this has been the new books network where we explore the space between strategy and ethics. And thank you very much for listening.