Episode Summary

In this episode of Interpreting India, Konark Bhandari, speaks with Edward Fishman, author of Chokepoints: American Power in the Age of Economic Warfare, on economic statecraft, how the U.S. built its playbook for economic warfare over time, and what the lessons are for India as it looks to build its own economic resilience.

This episode explores:

• What makes something a genuine choke point, and is there a playbook that other countries can actually replicate?
• Why were China's rare earth export controls and Iran's leverage over the Strait of Hormuz among the most consequential acts of economic warfare in recent months?
• Why does the U.S. tend to ratchet up export controls and sanctions incrementally, and what are the consequences of that approach?
• What options does India have in an era of geo-economic fragmentation, and where does it stand in the U.S.-China technology competition?

Episode Note

Edward lays out three criteria for what makes something a genuine choke point: dominant market share, difficulty to substitute, and the ability to weaponize it with asymmetric impact, hurting the adversary far more than yourself. All three are needed.

The U.S. dollar is involved in 90% of foreign exchange transactions. China refines 90% of the global supply of rare earths. Nvidia designs 85% of advanced AI chips. These are all choke points. Canada's dependence on the U.S. market, on the other hand, is not, because imposing embargo-level tariffs on Canada would be just as damaging to the U.S. as to Canada. The distinction, he notes, is not between weaponizing interdependence but weaponizing dependence.

On the question of incremental versus decisive action when it comes to what nations can do in response to chokepoints, Edward's view is clear: when you ratchet up sanctions or export controls gradually, the adversary adapts the whole time. The pressure goes up a little, they find workarounds; the impact goes down, and you end up with a zigzagging pattern that is not particularly effective. On semiconductors, he pushes back on the argument that restricting chip exports to China simply incentivizes them to build their own, pointing out that Huawei's chip subsidiary currently holds around 1% of the advanced AI chip market. If the AI race could be decided in the next few years, giving China access to Nvidia chips in the interim would, in his view, be giving ammunition to an adversary in the middle of the most important technology race of our lifetimes.

On India, Edward's view is that India has more optionality than almost any other country outside the U.S. and China. He sees deeper economic integration with like-minded partners as the most promising path forward, and thinks India is well positioned to benefit from the current transition in the global economic order. He is also candid that both the U.S. and China use economic coercion, and that it is reasonable for countries like India to factor that in. But when stacking the two up, his view is that the U.S. legal system, with its checks and balances, offers more predictability than the alternative.