Economic War Comes of Age | Foreign Affairs

In a timely piece for Foreign Affairs called “How to Fight an Economic War: A Field Manual for a Ruptured World,” Edward Fishman of the Council on Foreign Relations lays out a call to action. Economic warfare now defines great power competition. Success will hinge on disciplined use of chokepoints, selective defense of vulnerabilities, and sustained coordination with allies, since overuse of leverage risks eroding the very foundations of American power.

At Davos, Mark Carney described a world that has drifted far from the language of mutual gain, where integration once promised shared prosperity and now furnishes the terrain for coercion, with trade, finance, and supply chains repurposed into instruments of pressure that reach deep into the political life of states. The effect travels widely, stirring unease across powers large and small, each searching for leverage while quietly reckoning with its own exposure.

Washington and Beijing are moving along parallel tracks, assembling economic arsenals while reinforcing their defenses. This, as competition unfolds across rare earths, advanced semiconductors, and the architecture of global finance. The Iran War and the closure of the Strait of Hormuz has underscored how even limited disruption at key nodes can cascade through markets, unsettle private actors, and compel strategic adjustment at speed.

Fishman underscores how the U.S. can build economic independence in a way that actually works with and supports a global network of allies– and doesn’t drive us all toward autarky. Here are some of our distilled takeaways: 

Mapping Leverage

Coercion draws power from near monopoly control, scarce substitutes, and asymmetric pain. Dollar clearing, advanced chips, and rare earths fit this model, while tariffs diffuse pressure across a wide market. Overreach, however, invites diversification, weakens leverage, and accelerates parallel systems beyond U.S. reach. Sanctions are often examples of policy-lever overreach– weakening our ability to coerce down the road.

Strategy Before Action

Economic force demands alignment between means and ends. Deterrence favors restraint and stockpiling leverage, while degradation rewards early use. Gradual escalation grants adversaries time to adapt.

Endurance and Alliance

Endurance shapes outcomes as much as coercive capacity. Energy prices and market stability constrain policy, while public support sustains it. Allied coordination preserves scale and limits fragmentation.

A Disciplined Approach

American strength rests on timing, restraint, and coalition use. We need to build alternative supply where rivals hold leverage, protect core nodes, and sustain growth. A cohesive bloc offers the most viable path through a fractured economic order.