Latest news with #EdwardFishman
Forbes
26-05-2025
- Business
- Forbes
Can The Economy Grow When All Relationships Are Negotiating Chips?
Edward Fishman's timing is perfect. His book, Chokepoints: American Power in the Age of Economic Warfare, was released one month into a new administration that views every economic relationship as a potential negotiating lever. Fishman's book tells the story of a gradual, and then sudden, awakening of government officials to the power associated with squeezing or cutting off key arteries of economic connection to achieve political goals. Fishman is friends with Chris Miller, who introduced us to the idea of chokepoints in his book Chip War. Miller explained that every chip that goes into the world's most advanced computers are made by Taiwan Semiconductor Manufacturing Company. And TSMC cannot produce these chips without a machine that only one other company, ASML of the Netherlands, can make. Those companies, and their products, are 'chokepoints' - control access to them and you wield enormous power. Fishman expands the story into a chronology of how the U.S. government learned to identify and use chokepoints. He knows many of the key actors, and was personally involved in some of the policy actions. This gives his book a 'fly on the wall feel' as the reader is placed in the room where decisions were made. Many of the stories track the increasingly detailed use of financial chokepoints. This began in 2006 with the US government going on a road show through Europe, meeting with bank CEOs and explaining how their institutions were helping channel money to Iran. Many of the CEO's were unaware and, fortunately, this forensic accounting approach convinced most to tighten enforcement of sanctions. But there was always going to a subset of banks that didn't care about maintaining good relationships with the US, and thus continued to work with Iran. This forced a pivot in the Americans' approach. Instead of trying to suffocate Iran's oil business, the US attempted to prevent Iran from bringing home the money it had earned. Iran could sell oil and receive payments in U.S. dollars. But, as the revenue was held in escrow accounts at foreign banks, the U.S. was able to restrict access. That created a tantalizing economic lever the US could pull. Look at all the money you've got - do what we want and you can have it, keep behaving badly and you can't. It feels like a pandora's box - once the lid was lifted and the US started to view the global economy from the lens of chokepoints, it got progressively more 'creative'. This creatively was unleashed in full force against Russia in 2022. One of the most striking stories in the book takes place just after Ukraine was invaded. Russian oil tankers attempting to leave the Black Sea and take their product to market became lined up in a vast traffic jam at the Bosphorus strait. Why? Because they weren't insured. And if they didn't have insurance Turkey was not going to let them pass through its territory. Why were they uninsured? Because 95% of shipping insurance is provided by firms in London who were complying with a services ban on Russian oil. London insurers were the TSMC of shipping - without their product an entire industry could not operate. Economic warfare has expanded beyond the financial realm and an important part of Fishman's story is how detailed legal maneuvering has been used against Chinese companies. One very important legal tool is a 'denial order' - an export control that bans the target company from buying all US products. In an interdependent global supply chain, getting hit with a denial order can amount to a death sentence. For example, China's second-largest telecom equipment maker ZTE was caught in a plot to buy US technology and resell it to Iran. In 2016, as part of a settlement, they were fined $1.2 billion. When they were later found to be violating those terms, the Commerce department issued a denial order against them. Because ZTE relied on American technology, the denial order was deadly and within three weeks the company issued this announcement: As a result of the denial order, the major operating activities of the company have ceased. President Xi eventually sweet talked Trump into rescinding the order, but as Fishman says, the lesson was learned - a leading foreign company could be dispatched, and then resurrected, with the stroke of a pen. What's my view on all this? It's clever to squeeze Russian oil by banning London-based insurers from dealing with them. That's a short-term win, and justifiable given the savage invasion of Ukraine. But surely that action at least partially undermines the basis of the industry in London. Why rely on insurance from a firm that can be squeezed to shut you off? The same logic applies almost everywhere pressure on a chokepoint is applied. The usual answer to this dilemma is: just don't invade a democracy and murder tens of thousands of people and you'll be fine. Fishman presents a version of this argument: That distinction has now been eviscerated by the Trump government. It doesn't matter if you are Canada - the country most aligned with the US on values, culture and economic prosperity. It doesn't matter if you are Germany - a country that used its economic leadership in Europe to shepherd democracy across the continent. Nope - the message is now clear. Your economic ties with us are just as liable to be used as chokepoints as those with China, Iran or Iraq. Germany made the mistake of relying on Russian natural gas for about 50% of its supplies. A massive chokepoint. And Russia choked them, triggering an energy crisis that threatens Germany's formidable industrial base. The US meanwhile has experienced a boom in exports of liquefied natural gas, and had ambitions to replace Russia supply, at least in part. But why would Germany build a reliance on US imports when it's obvious that will eventually be seen as a chokepoint? I've often thought of Putin as a tactical genius and a strategic incompetent. He knows how to use threats, manipulations and leverage to influence events in the short term. Meanwhile, all his maneuverings keep his focus on tactical wins, while in the long-term his country declines. It declines because of the contradiction that underlies the 'chokepoints' view of the economy. A country accumulates strength by virtue of a vibrant, competitive and growing economy. That economy is a network of connections and relationships. If all those relationships are ultimately vulnerable to government manipulation, the connections will be kept weak and shallow, because they must be expected to snap at any time. If everything becomes a point to be choked, there is no oxygen for growth. In the end you become weaker. Pre-Trump many of us imagined the world moving back into blocks based on political systems and shared values. Yes, chokepoints might exist inside a 'western' group of democracies, but that's ok because there was no need to fear they would be used as leverage. That vision is now gone. The US is now transactional, all chokepoints are fair game.
Reuters
18-03-2025
- Business
- Reuters
Why financial warfare could backfire on the US: podcast
LONDON, March 18 (Reuters Breakingviews) - Follow on Apple, opens new tab or Spotify, opens new tab. Listen on the Reuters app, opens new tab. Read the episode transcript. Washington has sharpened the dollar and technology into powerful weapons. Now erstwhile allies fear they are targets. In this episode of The Big View podcast Edward Fishman, the author of 'Chokepoints', explains how economic interdependence is increasingly at odds with security. FURTHER READING/LISTENING Europe will struggle to slip US economic chokehold The power and peril of American economic warfare: podcast Trump's confidence-sapping policies echo the 1930s 'Merz spurt' will see Europe CEOs rethink US pivot Visit the Thomson Reuters Privacy Statement, opens new tab for information on our privacy and data protection practices. You may also visit opens new tab to opt-out of targeted advertising. For more insights like these, click here, opens new tab to try Breakingviews for free. Editing by Oliver Taslic and Aditya Srivastav Breakingviews Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time. Sign up for a free trial of our full service at and follow us on Twitter @Breakingviews and at All opinions expressed are those of the authors.
Fox News
09-03-2025
- Business
- Fox News
From Washington: President Trump's Approach To Economic Warfare
This past week, President Trump paused military funding for Ukraine and later threatened sanctions on Russia. Meanwhile, the President rolled back tariffs on certain exports from Mexico and Canada but still plans to impose 'reciprocal' tariffs starting in early April. Edward Fishman, former Diplomat and author of Chokepoints and Senior Research Scholar at Columbia University dissects the current administration's approach to economic warfare and explains why the U.S. dollar is the country's most powerful weapon. Upon taking office, President Trump expressed that he wanted to reshape FEMA. Since then, the President has garnered support from House Republicans, many of whom are demanding a complete overhaul of the agency. Congressman Mark Harris (R-NC) is one of them. He explains his concerns with FEMA and discusses the legislative route to enacting meaningful change. Learn more about your ad choices. Visit
Yahoo
31-01-2025
- Business
- Yahoo
Trump set to announce steep tariffs on Mexico, Canada
President Trump is on the cusp of upending North American trade, threatening to strike a radical blow to relationships with America's top economic partners. Trump is expected to announce Saturday steep new tariffs on goods from Canada and Mexico, after pledging for months to impose import taxes on two close U.S. allies. The president has left several questions about his plans unanswered, such as how high the tariffs might be, when they would be implemented, under which law they would be issued and which goods might be exempted. Trump's most aggressive proposal, however, would hit all Canadian and Mexican products with 25 percent import taxes. Experts say doing so would spur near-immediate increases in food and fuel prices, while prompting damaging retaliation from two countries deeply integrated into the U.S. economy. 'That would be a massive deal. These are America's two largest trading partners. We depend on imports from both of those countries, and your first-order impact is higher prices for American consumers and for companies,' said Edward Fishman, a senior research scholar and adjunct professor at Columbia University. 'And I think that's why you see a lot of people, including folks who supported President Trump, voice a lot of concerns,' added Fishman, author of the forthcoming book 'Chokepoints: American Power in the Age of Economic Warfare.' Trump himself has brushed off the potential costs of tariffs, which are taxes paid by the U.S. individuals and companies who ordered and imported targeted products. The president has frequently claimed foreign countries pay for tariffs, and that the taxes themselves are necessary to fight other economic harms. 'Mexico and Canada have never been good to us on trade,' he said Thursday, confirming his plans to impose tariffs. 'They've treated us very unfairly on trade, and we will be able to make that up very quickly because we don't need the products that they have.' Trump has griped for years that the U.S. imports more goods from Canada and Mexico than those countries do from the States, a dynamic reflected in trade deficits with each nation. The U.S. trade deficit in Canada was roughly $45 billion and $170 billion with Mexico in 2024, according to federal data. Trump and his protectionist allies have long argued that the U.S. should rebalance trade with Canada and Mexico as a matter of basic fairness. 'Our farmers, our ranchers and our fishermen are the best in the world, and they are treated poorly. Canada, as we spoke about, treats our dairy farmers horribly. That's got to end,' said Howard Lutnick, Trump's nominee to serve as Commerce secretary, during a Wednesday confirmation before the Senate Commerce Committee. 'If Canada is going to rely on America for its economic growth, how about you treat our farmers, our ranchers and our fishermen with respect?' During his first term, Trump led a renegotiation of NAFTA that earned praised from Democrats and union advocates for boosting U.S. products through various labor and environmental stipulations. But Trump has expanded the aims of his tariffs — and his ire with Canada and Mexico — during his second term. The president has alleged that Canada and Mexico are refusing to take necessary steps to stop the flow of migrants and lethal drugs such as fentanyl into the U.S. Lutnick also claimed Wednesday that Mexican cartels were operating drug labs in Canada, allowing traffickers to avoid beefed up security at the southern border. 'If we are your biggest trading partner, show us the respect,' he said. 'Shut your border and end fentanyl coming into this country. So it is not a tariff, per se. It is an action of domestic policy.' Canadian and Mexican officials have made clear they are ready to respond with steep tariffs of their own on U.S. goods, a prime area of concern among senators from states dependent on agricultural exports. The U.S. also imports billions of dollars in oil from Canada, which could become drastically more expensive with import taxes. The blowback could leave Americans paying more for produce from Mexico and oil from Canada, while also hurting U.S. farmers eager to make inroads in Canada's dairy market and other key industries. The tariffs could also derail the U.S. auto industry, which is deeply intertwined with factories and assembly plants in Mexico and Canada. Autos and auto parts can cross the U.S. northern and southern borders more than a dozen times before a car or truck is ready for sale, incurring tariffs along the way. 'I'm concerned about the high cost of vehicles. Many families can't afford them now, and if tariffs are put in place that deal with that seamless trade that goes on with Canada, that in the short run, definitely have an impact on prices and make cars even more unaffordable,' said Sen. Gary Peters (D-Mich.) to Lutnick. Fishman added that Canada and Mexico could take even more drastic steps to hurt the U.S. if Trump keeps steep tariffs on their goods, including curtailing oil production or halting certain imports or exports entirely. He added that Trump's failure to identify specific steps or milestones Mexico and Canada must take to free themselves of tariffs could undermine their effectiveness at achieving his goals. 'There's not a great track record of coercive economic measures, be it tariffs or sanctions, achieving that kind of a function without explicitly laying out what you're trying to achieve, and I haven't heard clear goals,' he said. 'They can be used as a negotiating tool, or they can be used to address structural problems like deficits or something else, but it's hard to do both at the same time.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
31-01-2025
- Business
- The Hill
Trump ready for trade showdown
Trump is expected to announce Saturday steep new tariffs on goods from Canada and Mexico, after pledging for months to impose import taxes on two close U.S. allies. The president has left several questions about his plans unanswered, such as how high the tariffs might be, when they would be implemented, under which law they would be issued and which goods might be exempted. Trump's most aggressive proposal, however, would hit all Canadian and Mexican products with 25 percent import taxes. Experts say doing so would spur near-immediate increases in food and fuel prices, while prompting damaging retaliation from two countries deeply integrated into the U.S. economy. 'That would be a massive deal. These are America's two largest trading partners. We depend on imports from both of those countries, and your first-order impact is higher prices for American consumers and for companies,' said Edward Fishman, a senior research scholar and adjunct professor at Columbia University. 'And I think that's why you see a lot of people, including folks who supported President Trump, voice a lot of concerns,' added Fishman, author of the forthcoming book 'Chokepoints: American Power in the Age of Economic Warfare.' During his first term, Trump led a renegotiation of NAFTA that earned praise from Democrats and union advocates for boosting U.S. products through various labor and environmental stipulations. But Trump has expanded the aims of his tariffs — and his ire with Canada and Mexico — during his second term. The president has alleged that Canada and Mexico are refusing to take necessary steps to stop the flow of migrants and lethal drugs such as fentanyl into the U.S.
