School of War - How Choke Points Became Weapons of War, with Edward Fishman

Episode Date: July 10, 2026

Edward Fishman, senior fellow and director of the Greenberg Center for Geoeconomics at the Council on Foreign Relations, joins School of War to discuss his New York Times best-selling book, Chokepoints: American Power in the Age of Economic Warfare. How has the United States turned the global economy into a strategic weapon? What are the strengths and limits of sanctions? And how are China, Russia, and Iran adapting to a new era of economic warfare? 02:46 - Edward Fishman's background 04:26 - Understanding economic chokepoints 05:35 - The dollar as a strategic chokepoint 07:02 - Semiconductors as a strategic chokepoint 09:24 - The Iraq embargo and modern sanctions 11:05 - Airpower vs. economic warfare 12:14 - Are sanctions a "nuclear weapon"? 13:23 - America's sanctions strategy toward Iran 14:25 - Trump pulling out of the JCPOA 16:20 - The limits of economic warfare 18:00 - Iran, the Strait of Hormuz, and the MoU 20:44 - Shadow fleets and Iranian oil 22:54 - The evolution of Russia sanctions 27:59 - China and the economic arms race 29:53 - How nations mitigate economic chokepoints 34:20 - What makes a strategic chokepoint? 39:40 - Chokepoints beyond economics 41:05 - Can Iran institutionalize control over the Strait of Hormuz? Follow along on Instagram, X @schoolofwarpod, and YouTube @SchoolofWarPodcast, or at The Free Press Learn more about your ad choices. Visit megaphone.fm/adchoices

We talk about economic warfare from time to time here on School of War as an obviously very important adjunct to warfare itself. But my guest today, Edward Fishman, is very, very interesting not only on the subject of economic warfare itself, but how the concept of choke points applies to strategy more broadly. We start very practically with the history of American sanctions and how our sanctions wars against Iran, Russia, et cetera, function. but we get a little philosophical at the end and try to understand how the world of competition actually works in 2026. It was really interesting. Let's get into it.

It is a perspective for war. This is a lot of the invasion of away. The December 7, 1941, a date which will live in history. A bloody experience of Vietnam is to end in a state. We continue to face the rain situations in grand. People are not me. You'll fight on the beach, you know.

landing around, we shall fight in the fields and in the streets, which will never surrender. Hi, I'm Aaron McLean. Thanks for joining School of War. I am delighted to welcome to the show today, Edward Fishman. He is Senior Fellow and Director of the Greenberg Center for Geo-economics at the Council on Foreign Relations, author of numerous interesting articles and essays over the years, and recently a best-selling book, Choke Points, American Power in the Age of Economic War Fair. Edward Fishman, welcome to the show. Aaron, thanks for having me. It's great to be here. It's good to see you. We've actually known each other for a while.

Relevantly, I think one of my last in-person memories of you, this is a long time ago, we were both doing some DC think tank stuff together. And I think we were traveling in Asia. I can't remember which country. I don't know if it was Korea or Taiwan. I think we did. Did we go to both? We might have done both, but whichever one it was, I remember you having to suddenly leave our trip early because you were serving. in the Obama administration at the time. And you literally had to leave to go sanctioned Russia.

I have this vivid. There was like some meeting you had to be at where you were going to be sanctioning Russia. So I've seen what you've written about foretold. I was a witness in your working years. I just regret, look, this was when we were in Seoul together. And I remember that vividly because I was so excited to be there. Then of course, you know, you get you get off the plane to this trip. And then all of a sudden you get called back to Washington. So it was unfortunate, but I'm glad we're reunited now. I want to ask you questions about your book and about the theory and practice of economic warfare. It really is a fascinating book.

I do recommend it to listeners who have an interest in the subject. But before we do that, how does one get into the business of waging economic warfare, Eddie? Tell us a bit about how you ended up in this unusual line of work. Yeah. So it really goes back to my time as a student in the aughts. So for those of you who remember what it was like to be interested in foreign policy in the 2000s, The U.S. was fighting two wars, one in Afghanistan, one in Iraq. And to the extent, you know, you were serious about this stuff. You were probably studying Arabic or counterinsurgency. But when I was sort of looking at these wars, I couldn't get over the fact that neither of them seemed to be going particularly well. And it struck me as this odd sort of thing that I couldn't reconcile in my head, that the United States was the most powerful country in the world. But we seem to really struggle to get what we want internationally, even when we we were sort of, you know, using coercive power against much smaller countries like Iraq and

Afghanistan. And at the same time, you know, sort of in the 2005, 2006 period, was when Iran's nuclear program became arguably the topmost national security challenge confronting United States. And I was sort of thinking, well, what could we possibly do about this? And I was very lucky in that right around that time, the journalist Robin Wright profiled this guy named Stuart Levy, who was the Undersecretary of the Treasury for Terrorism and Financial Intelligence in the Bush administration, who at the time was experimenting with novel forms of financial sanctions against Iran. And I read this profile when I was a student. And I was like, I need to figure out how to be part of this. This seems really interesting. Maybe there's a way to

use American economic and financial power to achieve our geopolitical goals in ways that, you know, military power wasn't able to do so. And so that's sort of what drew me into the world and was lucky enough that a week after finishing up my undergrad, I, you know, drove down to Washington, D.C., moved into an apartment in Adams Morgan and started working at the Treasury Department for Stewart Levy's successor. And so this notion of the choke point, I mean, you open the book with this very arresting visual of shipping lined up, you know, in the Bosporus, essentially, unable to pass through because of a treasury regulation that has just been promulgated that's causing trouble. This is the fall of 2022. And it's an arresting image because, as you outline there in the introduction, this has been a physical choke point, you know, since there was commerce, since there was warfare, since there was history in the eastern Mediterranean, you know, the the ability to transit grain and other materials out of the Black Sea into the Med has been a strategic focus for forever. But what's so interesting about the 2022 example is that the stoppage

is caused by policy, by the promulgation of an edict in Washington, D.C. How did you come up with this idea of the choke point as an organizing idea around which to write this very interesting recent history of economic warfare? I think the reason that I found it important or tell this story is I think even now it's underappreciated the unilateral power that the U.S. has by virtue of its economic strength. The dollar is at the center of that. The dollar, most people understand that it's the world's reserve currency. What they don't necessarily appreciate is that it's the de facto currency for international payments. It's the de facto currency for invoicing.

So if you're pricing goods internationally, you're doing so in dollars. And it's the de facto currency for investment. So if you're generating wealth abroad, you're putting that in dollar-denominated assets. And that sort of core insight, the fact that you really need access to the dollar in order to conduct international business full stop, is what actually got Stuart Levy, the aforementioned undersecretary of the Treasury for terrorism and financial intelligence. It's what gave him sort of the insight that he could isolate Iran without necessarily getting the international community on board. So to go back to sort of this example of Iran in the office. we didn't have support from the international community to fully isolate Iran from the global economy, which is what, you know, we required in the 90s to impose sanctions against Saddam Hussein's

Iraq. What Levy realized is that you could use the dollar to convince banks around the world to cut ties with Iran. And so to me, seeing the dollar used in that way was sort of an insight and something that I felt was really important to help people understand. But then even during the first Trump administration, we saw the Trump administration experiment with export controls on semiconductors using chips in much the same way that the Bush administration and the Obama administration had used the dollar. And when you think about the fact that Nvidia is designing around 85% of the AI chips

around the world, you realize that the U.S. can also use that as a choke point. And so it occurred to me that there were these parts of the global economy where one country has a dominant position, and there are few, if any, substitutes that do give the United States, in particular, this unilateral coercive economic power. I think we've seen in recent years that there are other choke points around the world that other countries control. And so my sort of number one priority in writing this book was to really illuminate for people around the world that there are these choke points in the global economy that can be used for economic warfare, and it's really fundamentally reshaping geopolitics today.

And what's really interesting or among the interesting things about it, right, is of course, the global economy wasn't designed to the extent it was designed at all and not simply an organic outgrowth of other factors to create this power. It is something that grew into what it is for other reasons. And then, you know, a series of people will be critically among them sort of recognize the way that different aspects of it could be, could be leveraged. How did we get where we are from, you know, you talk about, for example, Woodrow Wilson using economic warfare, others earlier in history using economic warfare. How did we, how did the system change along the way to create the current laydown that can be leveraged in the ways that you're

describing? Sure. So I think the necessary precondition was the end of the Cold War and the hyper-globalization period in the 1990s. Because it's now sort of invoked for historians to say that, you know, there have been different periods of globalization. There was one between the 1870s and 1914. And it is true that we've had different periods, sort of periods of waxing and waning economic integration. But there is something really novel about the period after the end of the Cold War because for the very first time, you actually have economic integration occur at the global level, where you have the entire world organized itself around a single currency, the dollar. You have transnational supply chains that crisscross the entire globe.

And you even have countries like Russia and China that throughout sort of the period after World War II were at the periphery of the global economy, right? The Soviet Union and the U.S. did not have any economic integration that are brought inside. That is what enables the sort of this choke point-driven economic warfare. To sort of go back to what I was mentioning earlier on the Iraq sanctions, I think this is an important sort of contrast to shed light on because it helps explain what's novel about economic warfare today. You know, in the, in August of 1990 when Saddam Hussein invaded and annexed Kuwait, within 72 hours, the UN voted in an embargo on Iraq. And the main goal of that embargo was to stop Iraq from selling oil on the global marketplace.

The embargo on Iraq was in place from August of 1990 all the way up until 2003 when George W. Bush launched the second, you know, bigger war against Iraq. And the way that that was actually implemented, Aaron, was doing multinational naval blockade. So for that entire 13-year period, you had 20-plus navies commanded by a U.S. Navy admiral patrolling the Persian Gulf, interdicting ships that they thought were carrying Iraqi oil. And that was how you had to do economic warfare, really, before we get to the contemporary age. You had to use naval force. You had to use military force to actually make it bite. What changes with the creation of these choke points and the global, hyper-globalization of the 90s is all of a sudden, you have a process where the president can literally just sign a document in the Oval Office and inflict substantial economic harm on any other country around the globe.

You know, I know that the theme of this podcast oftentimes is warfare, the use of military force. I think there's an analogy with air power. You know, before air power, if you wanted to, you know, inflict serious damage on another country's cities or industrial plant, you were putting your own people in harm's way, right? You had to go in there. But when you have air power, you have this, you know, at least the allure of potentially, you know, bombing cities and sort of having like a victory that has no casualties on your side. I think that's what the choke points enable for economic warfare. It enables you to use these economic systems like the dollar or advanced semiconductors or in China's case, rare earth minerals, inflicts substantial economic harm on other countries without necessarily having to use military force.

That's what changed after the hyper-globalization period. and it's a big reason why we've seen this rapid proliferation of economic warfare over the last two decades. Okay, but if we take everything that you just said, and we can just stick with the context of the dollar for now, though happy to talk about these other examples. You describe it almost, your comparison to air power sort of cuts against what I'm about to say, but there are ways in which one could interpret what you've said. And earlier in the history of this phenomenon, I certainly encountered people who would talk about it as though it were maybe not air power, but almost nuclear power. as to say, it was sort of an absolute weapon. The potential power properly used, the proper use of sanctions constructed along these principles,

could have a crippling effect purely as a function, again, of policy out of Washington, D.C. Obviously, the reality is messier and more complicated than that. It seems to be more messy and more complicated with every passing year for a variety of reasons. I don't know if you want to zoom in on Iran. We could do Russia as well. but ways in which countries that are targeted by these sanctions regimes find workarounds.

We could talk about the shadow fleets. We could talk about the weakening of the dollar as a central nexus. What's the other side of this coin, if you'll forgive the expression? Yeah, sure. I don't think nuclear power is the right analogy because I think that fundamentally economic pressure, even when used by the world's most powerful economic power, the United States, is a limited tool. And I think this is something that maybe was highlighted by the recent Iran war with the Trump administration, I can explain. You know, I think from George W. Bush to Barack Obama's term,

there's really a continuous policy on Iran. This gentleman I mentioned earlier, Stuart Levy, had been Bush's sort of chief sanctions official. He was reappointed by Obama to carry out this campaign against Iran. And I think the core sort of idea was that you could impose a maximum economic pressure against Iran and translate that into a deal on Iran's nuclear program, that you would have to necessarily limit your objectives, that you wouldn't necessarily be able to get, you certainly wouldn't be able to get regime change. You probably wouldn't be able to get Iran to sever ties with proxies or like Hamas or Hezbollah or to constrain its missile program. But if you impose really substantial pressure, you would be able to get them to comply with the nuclear

obligations that they should be complying with under international law, including the NPT, right? That was sort of the strategy of Bush and Obama. It led to the Iran nuclear deal. I think Trump coming in during his first term and pulling out of that deal, the JCPOA in 2018, made a bet, basically, that actually if you impose this maximum pressure, economic pressure on Iran, you could get even more than just a nuclear deal. You could get Iran to sever ties with proxies. You could get Iran to get rid of its missile program. Maybe you could even get regime change.

I think that the idea with, with, what Trump had in his first term and frankly, a lot of critics of the JCPOA was that sanctions were working so well that you actually could get maximalist objectives. My view has always been that economic power is very, is potent, but it's a limited tool. You're not going to get everything you want. And I think that ultimately what happened in the last year is that Trump realized in the context of both Venezuela and Iran where he had very similar strategies, which is maximum economic pressure to achieve maximalist geopolitical aims, that he wasn't actually getting those aims, right? Maduro wasn't leaving Venezuela. Iran, you know, the Iranian regime certainly wasn't falling. They weren't, you know, capitulating at the negotiating table. And instead of modifying his aims and saying, let's try maximum economic pressure.

to try to get more limited aims, he said, let's keep our maximalist aims and let's move up the escalation ladder from the use of economic power to the use of military force. And so I worry that that sort of idea that this is a perfect weapon, you know, that you can use economic pressure to get everything you want can put policymakers on the slippery slope to the use of military force because it's not a perfect weapon, right? It's an incredibly effective one and that you can actually use economic pressure to get significant concessions out of other countries. You can use it in the case of Russia to significantly curb Russian economic and military power. But it's not going to get you everything you want. And I think that's a dangerous illusion that certain policymakers have

had. What is the current state of play with the sanctions regimes, various overlapping regimes, as far as Iran is concerned? Obviously, there are waivers in place for the sale of Iranian oil. We've talked about that here on the show. Those theoretically expire at the end of a 60-day period. We'll all see whether or not that actually happens. But I am curious, sticking, you know, obviously you'll speak about whatever you want to speak about. But I'm curious your analysis of the use of economic warfare up to the present moment by the Trump administration with regards to Iran, how it integrates with a military force and what do you think the road ahead is. Yeah.

So, I mean, look, once the Trump administration started using kinetic force against Iran in February. right, with the joint U.S. Israeli strikes on Iran, I think we sort of, we moved outside of the realm of economic pressure into sort of a kinetic conflict. And I think that that really changed the equation because, you know, you're not, at that point, you know, I don't think sanctions were all that meaningful. You know, the Iranians, of course, used military force to shut down the Strait of Formos. They used drone strikes and missile strikes. They didn't use, you know, the legal power of the Iranian state. And I think Trump, I think, made a mistake for, you know, frankly, for the first six or seven weeks of the war to basically allow Iran to selectively

close the strait to close the straight for everybody else's oil except their own. So they were actually the first six weeks or so of the war. Iran was able to sell its own oil, you know, two million barrels a day or so at these inflated prices. And the reason prices were inflated were because of its own actions. I think Trump made a necessary corrective in April when they imposed the naval blockade on Iran. And I think that then sort of made the playing field a little bit more even and that, you know, at least Iran wasn't able to sort of make windfalls from its closure of the Strait of Hormuz. I think what we have now after sort of the MOU is I think, you know, to be extremely candid, I don't think it's right

to compare this MOU to the 2015 Iran nuclear deal. I know a lot of people have been sort of comparing that. The fundamental situation in 2015 was that Iran was under significant economic pressure and was coerced into making a deal where they had to make concessions on their nuclear program. I think you could argue maybe they should have made more concessions, but ultimately that was what happened, right? Iran's economy fell into a huge recession. The negotiated a deal where they gave up nuclear concessions under pressure. I think what we saw last month, Aaron, with the MOU, was kind of the opposite, where Iran, by virtue of using the closure of the Strait of Hormuz as an economic weapon against us coerced the United States into giving Iran

economic relief. And the MOU does give Iran really substantial economic relief. We provided Iran with effectively carte blanche to sell as much oil as it wants to anyone it wants around the world for that 60-day period, including collecting payment in dollars. The Trump administration also has agreed to allow Iran to access its frozen assets around the world. We haven't gotten full details of what that looks like. But that is very clearly what it says in the MOU. And then, of course, there's this promise of a $300 billion fund that could come into place eventually, although I'm a little skeptical. We'll get there. But ultimately, the U.S. is giving Iran a bunch of economic relief in exchange for Iran allowing more ships to go through the Strait of Hormuz. There's not much on the table

when it comes to nuclear concessions on the side of the Iranians. And I think that reflects sort of the balance of pain when the deal was struck. In terms of what sanctions remain in force, I mean, you still have a huge architecture of sanctions, including legislatively mandated sanctions that had been put in place over time. I think Congress, over time, has played a very constructive role, frankly, in sanctions against Iran. And it's part of what I tell in the book is, you know, I think they sort of played the bad cop when Obama was playing the good cop very effectively in the 2013, 2014, 2015 period. But I think right now, right now, Now Trump basically is trying to get as much relief from this oil crunch by getting ships through the Strait of Hormuz right now.

But, you know, I'm a little skeptical that this is going to lead to major nuclear concessions on the Iranian side. Let me ask you about shadow fleets, which I guess, I don't know, maybe you'll articulate exactly the situation on this. But with these waivers on selling oil, maybe Iran doesn't even need a shadow fleet for the, that 60-day period. Is that shadow fleet, is that even a legal thing for that 60-day period? But in any event, what is this way in which Iran has moved fairly significant quantities of oil throughout this period where buying Iranian oil has been illegally a pretty dicey thing? So shadow fleets are tankers that are oftentimes operating without mainstream insurance coverage. They oftentimes do kind of shady practices like turning their GPS transponders off so that they can't be tracked around

the world. They engage in practices like ship to ship transfers where they kind of park next to each other and change, you know, sort of funnel oil from one ship to the other. They do this really to sort of evade detection, to try to effectively smuggle oil around the world. The original shadow fleets were built up in the 2010s after Iran was put under oil sanctions happened in 2012, really under pressure from Congress and were really supercharged when Russia was put under sanctions in 2022 because the Russians invested tens of billions of dollars into sort of amassing a shadow fleet buying sort of old decommissioned tankers. So you have hundreds of these tankers around the world that have historically shipped Russian, Iranian and Venezuelan oil

when Venezuelan oil was under sanctions. But to your point, Aaron, under the MOU, you know, this general license that the Trump administration issued for Iranian oil sales, it basically legalizes the shadow fleet. And it explicitly says that even shadow fleet vessels are exempt from sanctions when carrying Iranian oil during this MOU period. So to me, that just reflects, again, ultimately the balance of power at the negotiating table and the fact that the Trump administration really was quite eager to see traffic resume through the Strait of Hormuzum was willing to give Iran quite a bit on the sanctions relief front. Shifting from Iran to Russia, what is the state of play of various regimes of sanctions targeting the Russian economy and, you know, Putin's control of Russia there,

particularly relevant here as we're talking just about as this NATO summit in Turkey is about to kick off. Yeah. So the Russia sanctions originated during the Obama administration in 2014 when Russia annexed Crimea, if you remember that in March 2014. And back then, the Obama administration deliberately chose a very light touch sanction strategy. Basically, and I think the tagline that Toria Newland, who was the sort of the main Obama official who was working Ukraine policy at the time, was scalpel-like sanctions that she came up with, which was, you know, we are not going to push the Russian economy off an economic cliff. We're going to be, you know, relatively light touch. And the reason was at the time Russia was the world's eighth largest

economy. They were sort of irreducibly connected to Europe. And so there's concerns that if you impose sort of Iran-style sanctions on Russia, it would send Russia into this major economic crisis, and that could lead to contagion in Europe and maybe even the United States itself. What happened, though, Aaron, was so even the sanctions were relatively light in 2014. The second half of that year, the global oil price fell from over $100 a barrel down to $50 a barrel in a matter of months. And so all of a sudden, even though the sanctions weren't all that impressive. Russia did fall into this huge economic crisis that the Obama administration had wanted to avoid. And in the winter of 2014, 2015, the Russian economy was contracting at an annualized

rate of 10%. So I think they were really against the ropes. And I think we saw, and again, I was involved in this policy at the time, we saw evidence that this was really sort of clipping Putin's wings. On January 1st, 2015, the sort of titular heads of the Dinesk and Lujan's People's Republic's officially disavowed their desire to build Novo Rosia, which was sort of this new state that they were trying to build within Ukraine. But instead of pressing our advantage in 2015, you know, Angola Merkel, the German chancellor and Francois Alon, the French president, were so worried about what potentially could happen if Russia fell into an economic crisis that they negotiated this Minsk ceasefire deal with Putin and Poroshenko, who was the, you know,

the Ukrainian president at the time. And I think, unfortunately, what that was was just sort of a recognition that the Europeans didn't have the medal for a full-scale sanctions campaign against Russia. I think fast forward to where we are today. And I think the Europeans actually have all of a sudden become much more hawkish on Russia. They have been willing to, you know, push forward very substantial sanctions. Of course, they no longer buy significant amounts of oil at all, really from Russia. They barely buy any gas from Russia anymore either. So the Europeans have supported really significant sanctions. The U.S. had been working sort of in lockstep with Europe up until very recently. I think the Trump administration just hasn't had its heart in the sanctions

regime. The Trump administration has alleviated sanctions on Russian oil in recent months in an effort to try to bring more supply on the market and kind of alleviate that crunch that was caused by Iran's closure of the Strait of Hormuz. I think some of the windfall that would have gone to Russia has been sort of reduced by Ukrainian drone strikes on Russian oil facilities, including export terminals and refineries. But I think where we are right now, Aaron, with Russia sanctions, is a bit of a muddled space because the Europeans still have stood solidly

behind Russia sanctions. The Trump administration hasn't completely deep. constructed the sanctions regime, but they haven't really done anything to strengthen it. And in recent months, again, they've explicitly weakened some of the core parts of the regime. So I think, unfortunately, at a point where I think we could actually use economic leverage to put more pressure on Russia, the United States really just doesn't seem to have it's hard in the game right now. So if you're China watching everything we've just been talking about, whether it's a U.S. Economic Warfare campaign targeting Iran or targeting Russia, all of the complexity.

and inconsistencies, but sometimes the real aggressiveness as well with effects. What are you learning? What are you taking away from all this in terms of how to structure the Chinese economy for potential future tensions or even conflict? And obviously I'm interested in this question of the dollar itself, the future of the dollar, the future of the design of the system that allows for these choke points to be leverage. So look, I think that we have two parallel processes unfolding today that are sort of, we're both

kicked off by the U.S. pioneering this new form of economic warfare. On the one hand, you have an economic arms race in which other countries have looked at what the United States has done to weaponize the dollar, to weaponize semiconductors against China, and said, well, are there choke points that we can use in a similar fashion? You know, China, I think last year, proved that it can be done, right? I mean, when Trump imposed 145% tariffs on China last April, April 2025, right after Liberation Day, China did respond with tariffs of its own, but the most important part of China's response were export controls on rare earth minerals.

And these are minerals where China refines 90% of the global supply. They function as a choke point in much the same way that the dollar or U.S. semiconductor designs functioned as a choke point. And within weeks of those Chinese export controls, you had Ford, you know, the U.S. automaker, idle a factory that produces its Explorer SUV. You had Raytheon sort of scour the globe for alternative supplies of rare earth minerals. And I think that is mainly what caused the Trump administration to kind of pivot to more of a, you know, an accommodative approach toward China, this current detente in the U.S.-China relationship. And so I think that especially now when China has proven that it can use choke points like this effectively against the United States, certainly the Chinese themselves are going to find additional choke points to exploit. And I think some of that will be accelerated by the Iran War because China's choke points are probably the most potent ones are in areas like batteries and solar panels, you know, clean energy technologies that I think are going to be given tailwinds by the Iran War. So I think that economic arms race is only going to accelerate.

But then the other side of that, Aaron, is what I call scramble for economic security, where countries see the vulnerabilities that these choke points cause for them and take steps to insulate themselves. So China's been doing this already for a decade. Your point on the dollar, it was after the U.S. sanctioned Russia in 2014 that China started building SIPs, the cross-border interbank payment system, which is their alternative, way to clear cross-border payments without touching the dollar. That was, you know, basically seeing what happened to Russia and saying to themselves, if this can happen to Russia, it can happen to us, too. Of course, you've also seen China spend billions of dollars trying to indigenize their semiconductor

industry. And now you see the United States engaging in similar activity, right? The U.S. trying to indigenize our own rare earth minerals industry to reduce our exposure to Chinese choke points. So I think, you know, the lessons that China is drawing, the lessons that really any other countries are drawing are trying to map out these choke points. What are the ones that we can use, that we can use to sort of advance our own geopolitical aims? And then what are the ones that make us vulnerable? And the areas where we're vulnerable, how do we funnel state capacity, you know, industrial policy and other levers to try to patch them up? Yeah, I was really struck in the context of China when I went and served in the Senate some years ago now. You know, I had not really, like you, I grew up sort of with the war on terror as the context of my young adulthood.

I did in fact learn Arabic. I did in fact get immersed in the military side of things. I was pro-cyclical in every way, Eddie. I was zero percent creative. Nevertheless, you know, for several years before I went and worked in the Senate as a staffer, I, you know, like all of us, I've been paying more and more attention to China. And what did that mean? Well, I mean, I was paying attention to the hard balance of power in the Western. I was learning about that. I was, you know, I was reasonably immersed in sort of the more

traditional questions of diplomacy, you know, who's recognizing Taiwan, who's not recognizing Taiwan, what is the actual structure of our alliance system there, you know, where are the Chinese making inroads, all that kind of stuff, like traditional hard power and traditional diplomatic questions. And so I was kind of surprised. And in retrospect, sort of mostly struck by my own naivete, when I got into the Senate and I realized that actually, though those things were all all extremely important. The real day-to-day sources of conflict with China, the real policy fights, were all about the stuff that you're talking about and writing about. Economic regulation, Huawei, you know, is Huawei going to build, you know, the data infrastructure of the future

worldwide, the cellular infrastructure? So, you know, what were to the, you know, the nonprofessional iris or sort of the casual observer of U.S.-China relations, a sort of esoteric seems. questions of commerce and commercial regulation and trade policy were actually the domain in which the competition was actually occurring. And I had, you know, obviously a crash course in all that stuff from the inside of the policy process. I kind of want to ask you almost a philosophical question, Eddie, that goes back to your idea of choke points. You know, there I was immersed in the Senate and all these, again, from the outside sort of obscure policy fights that really mattered. I mean, it really did matter whether or not China was going to be allowed to build a system.

that would give it tremendous leverage, tremendous access to choke points if Huawei did indeed, say, build the digital infrastructure of the United States, you know, for the next generation or whatever, you know, whatever the dispute of the day was. You know, this idea of a choke point, obviously you talk about it both in terms of traditional hard power and, you know, the access of commerce through maritime literal choke points. You talk about it in terms of an economic order and the ability to leverage things in that economic order. But really, it's a very broad concept that when you think about it, is at the heart of strategy. It's like, what is the system?

What are the points of the system that we can influence? How can we achieve maximum control of the system? In some ways, that's the whole ballgame, isn't it? So I just, I want to put that to you as like, how do you think about this even in terms beyond economic policy? I mean, it seems to me like as an image or an idea, it's almost a way to organize one's approach to strategic thinking just writ large. Yeah, and I think that's fair.

And I think ultimately, you know, what is a choking? point. I could go into sort of depth in terms of what an economic choke point is, but fundamentally, you need three things for something to be an economic choke point. You need a concentrated market share. So I mentioned the dollars, 90% of foreign exchange transactions or China refines 90% of the world's rare earth minerals. You need something that's hard to substitute. So an example here would be, if you look at medical masks, at the beginning of COVID, we imported 90% of, we imported 90% of, percent of our medical masks, and we all panicked when China imposed export controls. But within a few months, we quadrupled our domestic production of medical masks. Very easy to substitute, not effectively

a choke point. Contrast that, again, with the dollar. For over a decade now, China's been trying to get off of the dollar and they can't do it. They're still settling around 70 percent of their own trade in dollars today, which is quite remarkable. So you need concentrated market share, difficulty to substitute. And then third, which is critical and I think does apply to really any realm of strategy, is you need the ability to weaponize a position with asymmetric impact. So when you're cutting off a choke point, it's hurting the target much more than it hurts yourself. And I think that is kind of fundamental to understanding competition in general. You think about tariffs, for instance, where, you know, if you look at the United States where this massive importer,

where the world's biggest importer by far. And you look at a country like Canada, our northern neighbor, where they're selling 75% of their goods to the United States, and there's no way for them to substitute it in any reasonable period. If you're the Canadians, you're probably thinking, wow, the U.S. really has me over a barrel.

There's really nothing I can do about it. But the challenge is that U.S. tariffs on Canada failed that third test. If we were imposed an embargo-level tariff on Canada, it would cause unacceptable harm to ourselves. And that's why even though President Trump imposed a 25% headline tariff on Canada 10 days into returning to the White House in 2025, you know, in response to the fentanyl crisis, the average effective tariff on Canadian imports coming into the U.S. last year was just 3%.

The Trump administration basically had to exempt everything in order to stave off the untoward economic implications for us. So I think if you think about that, you know, areas where you've concentrated power that's really hard for other countries or other actors to sort of replicate, and this gives you some sort of asymmetric position, I agree. That could apply to military force. It could apply to economic power. I think it can apply to business. I think one way to understand why NVIDIA has become a $5 trillion company is that they're producing a good that is fundamentally a choke point. I think a lot of, a lot of, a lot of, you know, the companies that are driving, really, the U.S. stock market right now are sitting at these strategic joke point. So I would agree with you, Aaron, that probably people who are more creative and smarter than me can take the concept and write an even bigger and better book than mine, which is fundamentally about economic systems. But I do, I've already seen, you know, applications to all kinds of fields outside of geopolitics. Well, look, you're not, you're not off the hook that easily, Eddie, because I'm trying to think this through live with you.

And, you know, the author your book reminds me most of, and this is going to sound a little bit over the top, but I do mean it as high praise, is the work of Julian Corbett, the great, you know, naval strategist and historian of the turn of the 20th century. You know, his dispute with Alfred Thereman. Mahan develops this whole theory of the importance of sea power and, you know, lines of communication and see the need to secure that through military means, the notion of decisive battle. and Corbett's response to that as sort of, yes, but, yes, sea power is very important. Yes, C-lines of communication critical, but ultimately we care about what happens ashore. And really what C-power allows you to do is achieve some level of influence, maybe control under some circumstances of this system. And it's really control of the system that matters.

And that control can come through any number of means. And decisive battle is one of them, but there's all kinds of other stuff. And so let's not be quite so rigid and dogmatic. And I've always thought that insight has always stuck with me, and I've always tried to apply it analogically to other things. And that's sort of I sort of encounter that kind of thinking in your book here. And I'm just fascinated by this notion of thinking through in this incredibly complex world in which we're living in the 21st century, the various networks and systems, some of them the most traditional ever, like the Strait of Hormuz. Do boats get to go through the Strait of Hormuz or not? Well, that's one of the oldest strategic questions one could ever imagine imposing up to these highly,

theoretical questions of, you know, of financial regulation, to the questions of chips and rare earths where you might exercise leverage over that trade, one, for its own sake, because you literally don't want somebody else to have these high-end chips to do with those chips what they do,

but too, also for secondary effects, right? I mean, there's sort of these overlapping systems and the way in which they interact with each other and with older, more traditional domains of competition, like somehow, conceptualizing that and giving an account of it seems to me to be a very interesting,

but as of yet, and maybe you'll point me towards some author I need to be reading here, unaccomplished task of strategic thinking in the 21st century, because that just seems like the ballgame to me, and it seems like you're one of the authors sort of working on an important piece of that. Yeah, I appreciate it. And I agree that, you know, it's not just the economic choke points that matter. I think one of the more interesting factors the last few months is that even the old school choke points, maritime choke points like the Strait of Hormuz, can be weaponized in a similar fashion to a financial system or, you know, a semiconductor. I think the key difference, though, Aaron, I think something I'm going to be watching

for in the coming months is, you remember, what sort of distinguishes these economic choke points from physical choke points is that the economic choke points like the dollar or semiconductor or rare earth minerals or potentially active pharmaceutical ingredients, which is another one China controls, is that they can be weaponized without the use of kinetic force, that just by using legal means, signing documents in, you know, in the Oval Office, where in the Treasury Department or in the Chinese government office, they can actually have that impact. I think Iran is trying to, you know, they've seized control of the Strait of removes, but with military force, right, by using drones and missiles to strike commercial vessels.

What they're now trying to do, and what I think is the ballgame, at least with Iran, over the next few months, is can they convert that into steady state peacetime power? Can they actually institutionalize their control over the Strait of Hormuz such that even when they're not actively, you know, striking neutral vessels, they have the power to say, your ship goes through, yours doesn't. Or you're paying me a fee, you don't have to pay me a fee. That is ultimately the power that Iran is seeking right now. And I think that's what we're going to sort of see play out in the coming months, whether or not they can actually institutionalize that. Eddie Fishman, this has been a totally fascinating conversation.

I really appreciate it. The book is called Choke Points, American Power in the Age of Economic Warfare. Thank you so much for coming on School of War. Yeah, my pleasure. Good to see you.