My Take | US economic warfare is a lot more unhinged than its British predecessor
- The British Empire pioneered weaponising the global economy, a strategy now deployed with near reckless abandon by its successor, the American empire
The worsening rivalry between China and the United States has sometimes been called the new Cold War. But there is one essential feature and a necessary consequence that makes it very different from the last one between the Soviet Union and the US.
Soviet communism and the capitalist West led by the US were two mostly autonomous economic systems with limited contact and trade. So while Washington imposed sanctions against the Soviet Union for more than 40 years, their effects were limited.
However, during the era of hyper-globalisation that has only recently ended, the US and Chinese economies were so intertwined that it was called “Chimerica” during the 2000s.
One consequence of “Chimerica” is that it’s possible to wage a highly destructive economic war against China – the chip war is a typical example – in the way that it was not feasible against Soviet Russia.
Both adversaries have to be enmeshed in the same global economic system for one or both to disrupt the other’s or one another’s critical supply chains, financial markets, capital flows, trade and essential supplies – the characteristics of globalisation – using methods such as sanctions, export controls, tariffs, investment restrictions, and price caps.
At the end of World War II, British officials with almost half a century of experience of economic warfare considered the option of deploying it against the Soviets, but recommended against it given the lack of economic integration between the two rival blocs.
