Overview of Donald Trump’s Economic Warfare Abroad Comes Home
This episode of The Political Scene from The New Yorker examines how Donald Trump’s use of economic coercion—tariffs, sanctions, and pressure on strategic chokepoints—has backfired internationally and is now producing real political and economic costs at home. Jane Mayer, Evan Osnos, and Susan Glasser speak with geoeconomics expert Edward Fishman about how modern “economic warfare” works, why Trump’s version is unusually reckless, and how the conflict with Iran and the Strait of Hormuz could reshape global politics, energy markets, and the 2026 midterms.
Key Takeaways
- Trump’s economic warfare has become self-defeating.
- The hosts argue that Trump has destabilized the global economy while also weakening his own political position and fracturing parts of the MAGA coalition.
- Modern economic power runs through chokepoints, not just markets.
- Fishman explains that the U.S. wields outsized leverage through the dollar, advanced chips, and sanctions—not merely because it is a big consumer market.
- The Iran/Strait of Hormuz crisis is the central example.
- Iran has learned to use a critical shipping route as leverage, selectively controlling oil flow and threatening global energy markets.
- The ripple effects are global.
- Higher fuel costs, shortages, inflation, and disruptions are already hitting other countries more severely than the U.S.
- Trump’s options are narrowing.
- The discussion suggests that he may be trapped between escalation and a stalemate that still looks like a loss.
What Edward Fishman Means by “Economic Warfare”
A modern form of coercion
Fishman defines economic warfare as using economic tools to force another country’s behavior without direct military conquest. Historically, this included blockades and embargoes; today, the U.S. can wield similar pressure through:
- the global role of the U.S. dollar
- sanctions and financial restrictions
- control over supply chains
- strategic dominance in chips and rare earths
Why the modern era is different
Fishman argues that the last 20 years changed the game:
- the dollar is used in roughly 90% of foreign exchange transactions
- global trade is deeply interconnected
- countries now have obvious single points of failure
His larger point: economic warfare has become easier to deploy, but also easier to miscalculate.
Trump’s Misread of Economic Power
The core mistake
Trump appears to believe that because the U.S. is the world’s biggest importer, tariffs and economic pressure should force other countries to bend to American demands.
The problem
Fishman says this ignores the fact that:
- the U.S. is only about 13% of global imports
- other powers can reroute trade
- the dollar, chips, and rare earths are far more potent choke points than consumer access alone
Result
Trump’s pressure campaigns often trigger adaptation rather than submission. Countries diversify, reroute trade, or find ways around U.S. leverage.
The Iran Conflict and the Strait of Hormuz
Why the strait matters
The discussion emphasizes that the Strait of Hormuz is one of the world’s most important energy chokepoints:
- around 20% of global oil
- around 20% of liquefied natural gas
- major flows of fertilizer and other commodities
Iran’s new leverage
Fishman argues Iran has shown it can selectively control the strait using cheap drones and targeted disruption, rather than physically mining it shut.
That means Iran can potentially:
- allow its own tankers through
- block or tax others
- turn the waterway into a tollbooth
Why this is a strategic shock
The hosts stress that the world may now have to treat the strait as a permanent source of risk, not just a theoretical vulnerability.
Economic and Political Fallout
Global effects
The episode describes worsening conditions across the developing world:
- fuel shortages
- rationing
- work and travel disruption
- rising energy prices
- pressure on supply chains
U.S. effects
The U.S. is not insulated, but it is somewhat cushioned by domestic oil and gas production.
Still, listeners are warned to expect:
- higher gasoline prices
- more inflation
- pressure on consumers and markets
Europe and allies
The episode also highlights diplomatic fallout:
- allies are losing trust in the U.S.
- European countries are discussing “strategic autonomy”
- NATO and the U.N. are seen by some as less reliable long-term guarantees
Why This Could Prolong Other Conflicts
A striking part of Fishman’s analysis is that Trump’s Iran policy may also strengthen Russia:
- sanctions on Russian oil were eased in response to the crisis
- Russian revenues reportedly increased
- that gives Moscow more financial room in its war against Ukraine
The broader warning: economic warfare can have unintended second- and third-order effects that spread far beyond the original target.
Domestic Politics: The Backlash Comes Home
The political risk for Trump
The hosts argue that Trump’s foreign-policy actions are increasingly affecting everyday Americans:
- higher gas prices
- weaker confidence in his competence
- falling approval among independents
Why this matters now
The episode suggests that economic pain makes Trump more vulnerable than in his first term, when the economy still gave him cover.
But there’s a catch
Unlike his tariff fights, Trump cannot easily reverse the crisis if Iran controls the strait. That makes this a much harder political problem to escape.
Main Conclusion
The episode’s central message is that Trump’s aggressive use of economic warfare has exposed the limits of American power when it is wielded without patience, strategy, or allied trust. Instead of restoring U.S. dominance, his approach has:
- encouraged adversaries to adapt
- weakened alliances
- raised global energy costs
- created domestic political backlash
- and left him facing a crisis he may not be able to unwind
The conversation ends on a grim note: Trump may have started a conflict he cannot easily control, and the consequences are now spreading across the global economy and into American politics.