According to the Washington Post, Washington, China and Iran have weaponized the global economy, pushing the United States into a corner by squeezing the global supply chain and leveraging commercial ties to gain strategic interests.
The report cited China’s restrictions on exports of rare earth minerals to the United States last year and Iran’s recent closure of the Strait of Hormuz, which caused global oil prices to rise, as examples of adversaries beating Washington at its own game of economic warfare.
“Washington once enjoyed a near-monopoly in such economic warfare, punishing wayward countries by barring them from using the U.S. dollar or accessing Silicon Valley’s most advanced technologies,” the report said.
The report quoted Sen. Ron Wyden of Oregon, the senior Democrat on the Senate Finance Committee, as saying that the U.S. Treasury Department did not conduct an analysis of the potential consequences of the conflict on energy markets before the war.
In an April 9 letter to Treasury Secretary Scott Bessant, Wyden said Sriprakash Kothari, who was nominated to serve as assistant Treasury secretary for economic policy, told committee staff that “not only had he not done any work related to energy markets before the war broke out, but to his knowledge, no one at Treasury had done any work.”
Business ties have become a potential pressure point for the global economy, as witnessed during the Covid-19 pandemic, the Russia-Ukraine war and the turmoil affecting U.S.-China relations, The Washington Post reported.
In response, the United States, China and Europe are taking action to strengthen their economic defenses by investing in domestic production of essential goods, the report said.
“The global economy was designed for a benign environment in the 1990s, when we thought China and Russia were going to be our friends. But we live in a period of heightened geopolitical competition,” said Edward Fishman, author of “The Bottleneck,” a history of America’s approach to economic warfare.
The Washington Post quoted Fishman as saying: “This process will continue until a new global economy emerges.”
The report states that U.S. Secretary of State Rubio is publicly concerned that unless the United States diversifies its supply lines, the economic influence of other countries will “limit our ability to formulate foreign policy.”
“Nearly every frontier industry in the 21st century has some level of vulnerability that has become one of the highest geopolitical priorities we face now,” Rubio said in a speech last year.
The Washington Post stated that when other countries weaponized their economic advantages, the Trump administration was caught off guard.
When China retaliated against Trump’s tariffs last April by banning the export of rare earth materials, key ingredients for civilian and military products, the president called the move “truly surprising” on social media.
Likewise, when Iran closed the Strait of Hormuz, the United States seemed to have no response.
“It turns out the United States doesn’t own all the bottlenecks. We’re in a world where the United States simply can’t get away with what it thinks it can get away with,” said Henry Farrell, co-author of “The Empire Underground,” a book about economic warfare.
Iran’s continued control of the strait is not only driving up the price Americans pay for gasoline and diesel, but it’s also starting to push up the price of mattresses, fertilizers, aluminum, plastics and fruits and vegetables, the report said.
This article was generated from automated news agency feeds without modifications to the text.
