Rival nations seize choke points to counter Trump's global strategy

From Iran to China, President Trump's global aggression has encouraged other countries to search for new ways to pressure the US economy

By Ana Swanson

 

President Trump has unapologetically wielded the power of the United States on the global stage, taking a much more belligerent approach economically and militarily to try to dictate the actions of other countries.

 

From high tariffs to the war with Iran, Mr Trump has claimed that this aggressive behavior internationally has only upsides, and that past leaders were fools for refusing to tap into America’s power.

 

But one clear drawback of the strategy is emerging. While many countries have acceded to the president’s demands, some have found a highly effective new way to fight back. Mr Trump’s aggression has given them the opportunity to test their control over choke points, threatening the United States and the global economy.

 

 

One such choke point is the Strait of Hormuz. Iran, which accounts for less than 1 per cent of global economic output, has control over the shipping lane that transports a fifth of the world’s oil and gas. Its closure since the United States and Israel began attacking Iran at the end of February has blocked shipments of fuel, fertilizer and other goods, sending gas prices sharply higher and spreading anxiety among US farmers and manufacturers. 

Another experiment in retaliatory coercion began one year ago on Thursday, when Mr Trump walked into the Rose Garden and unveiled tariffs on what he called “Liberation Day.” While many governments — even powerful economies like the European Union — complied with US demands, China was a notable exception. Beijing rolled out a licensing system for exports of rare-earth minerals and magnets that has given China unparalleled control over the global manufacturing system.

 

Makers of cars, semiconductors, fighter jets and other goods — the backbone of a US factory system that Mr Trump wants to revive — depend on rare earths, most of which are processed in China.

 

While China is approving some licenses and allowing some rare earths to flow, supplies for many manufacturers are running short. And China has cut off exports of these materials to companies that work for the US military, leaving them struggling to find other suppliers. Mr Trump’s decision to delay a visit to China by roughly six weeks until mid-May worried some executives who hoped that his meeting with Xi Jinping, the Chinese leader, could alleviate the pressure.

 

The difficulties underscore an inconvenient truth for the president: As powerful as the American economy is, its inextricable links with the rest of the world can still bring it to its knees.

 

Edward Fishman, the author of “Chokepoints: American Power in the Age of Economic Warfare,” said the rest of the world had seen how the mineral controls had gotten Mr Trump to back off China last year. Since Mr Trump threatened in January to take over Greenland, even European officials had been searching for potential choke points in US trade, Mr Fishman said. 

“The lesson is that the way to deal with American economic coercion is to fight back,” he said. “Iran now is proving that again.”

 

China began designing a system of rare-earth controls before the re-election of Mr Trump, whose strategy is not entirely new: The United States has a long history of weaponizing supply chains, from using its control of the global banking system to punish enemy nations to trying to halt the flow of advanced artificial intelligence technology to China.

 

But Mr Trump stepped up American antagonism, with tools ranging from tariffs to military strikes. One of his basic principles has been that the United States should do a better job of leveraging its power. He argues that, as the world’s biggest consumer market, the United States can force other countries to trade on terms less favorable for them, and that with the world’s most powerful military, it can remove heads of state from Venezuela to Iran.  Mr Trump has dismissed any criticism that those actions violate international alliances, laws or conventions, preferring to see the world in terms of raw power. The countries that have done best against him, like China, seem to recognize that same principle, responding in economically destructive ways to try to force him to back down.  It remains to be seen whether Iran’s control over the Strait of Hormuz persuades Mr Trump to call off his campaign. But the disruption appears to be encouraging him to try to bring the war to a quicker end.