An age of coercion

“This is China versus the world,” U.S. Treasury Secretary Scott Bessent said last fall, after Beijing announced sweeping new export controls on rare-earth elements—minerals critical to everything from semiconductors to electric vehicle batteries to missile guidance systems. “They have pointed a bazooka at the supply chains and the industrial base of the entire free world.” Western corporations felt the effects immediately: When the European Union Chamber of Commerce in China surveyed member companies, one in three said they were looking to move their sourcing away from the People’s Republic.

But China is hardly alone in weaponizing economic ties. The United States has sanctions on more than 12,000 people and firms across more than 190 countries. The European Union has leveled its own sanctions against a range of foreign actors—foremost Russia, which has hit back with sanctions of its own (including against The Signal’s contributor Daniel Bessner). As Abraham Newman has put it here in The Signal, this proliferation of sanctions has spawned entire shadow economies: “We’re seeing that when global banks move out of sanctioned countries, other, shadier actors move in—and they know how to enable business for bad actors.”

Then, the tariffs. “Trump has changed the course of trade completely—we’re in a new world,” Martin Wolf says. “We’re going through a break similar to the break that occurred in the very early 1930s.” In recent weeks, Trump has only blurred these lines further—threatening tariffs and withdrawing them within hours. He’s backed legislation to impose tariffs of up to 500 percent on India, China, and Brazil—not for anything they’ve done to the United States, but for buying Russian oil.

Export controls. Sanctions. Tariffs. Economic coercion, it seems, everywhere you look. Why?

Nicholas Mulder is an assistant professor of history at Cornell University and the author of The Economic Weapon: The Rise of Sanctions as a Tool of Modern War. Mulder says three forces are converging. Russia’s priority is to overturn the post–Cold War order it believes has harmed its interests. China’s rise has fractured the American-led peace that made globalization possible. And the West’s decades of offshoring have hollowed out its middle classes, leaving its governments to grasp for anything that might bring factories back to them. All of which has eroded an international consensus that states should want to resolve disputes without reaching for the economic arsenal. Everywhere, Mulder says, national-security hardliners are taking advantage of this shift, edging their countries toward the most militarized modes of state economic intervention since the 1930s …

Gustav Jönsson: Wind us back to before the financial crisis. What did the world economy look like then?