Trump's 'Weaponized Interdependence' Reshapes Global Economic Order

Globalization didn't create a flat world—it created a centralized one. Every iPhone depends on chips from TSMC or Samsung. Every international wire transfer flows through a handful of banks. Every smartphone runs on Apple or Google's operating system. This concentration of power in key network nodes has become the new battlefield for great power competition.

Georgetown University professor Abraham Newman argues we're living in an "age of weaponized interdependence," where economic networks that were supposed to make war obsolete have instead become the weapons themselves. In Trump's second term, this strategy is reaching new levels of sophistication and aggression.

The Globalization Myth: Power Never Really Dispersed

For decades, the conventional wisdom held that globalization would decentralize power. With thousands of companies and countries interconnected, no single nation could dominate. But Newman argues this was always a "caricature" of how global networks actually function.

Look beneath the surface of any global industry and you'll find extreme centralization. In semiconductors, TSMC controls 54% of global chip manufacturing. In mobile operating systems, Apple and Google have a 99% duopoly. In international payments, SWIFT processes over 42 million messages daily for 11,000 financial institutions worldwide.

These aren't just market leaders—they're chokepoints. Control the chokepoint, and you can control the entire network. When the US banned Huawei from Google Play Store in 2019, China's largest smartphone maker saw its international market share collapse from 18% to just 2% within two years.

Trump 2.0: From Tariffs to Network Warfare

Trump's first term relied heavily on blunt instruments like tariffs and trade wars. His second term represents an evolution toward what Newman calls "neo-royalist world order"—a system where great powers bypass multilateral institutions and directly leverage their network advantages.

The semiconductor restrictions on China exemplify this approach. Rather than simply taxing Chinese chips, the US has cut off China's access to advanced semiconductor manufacturing equipment from ASML, Applied Materials, and Lam Research. This doesn't just affect one company or one deal—it constrains China's entire artificial intelligence development trajectory.

Similarly, the potential weaponization of the SWIFT financial messaging system could isolate entire countries from the global economy more effectively than any traditional sanction. When Russia was partially cut off from SWIFT in 2022, its ability to conduct international trade plummeted overnight.

The Corporate Dilemma: Caught in the Crossfire

For multinational corporations, this shift creates unprecedented strategic complexity. Companies that built global supply chains for efficiency now find themselves forced to choose sides in geopolitical conflicts.

Apple exemplifies this challenge. The company generates 19% of its revenue from Greater China, but its entire supply chain depends on components that could be restricted by US export controls. CEO Tim Cook has spent years trying to maintain neutrality, but the weaponization of interdependence makes that position increasingly untenable.

European companies face similar pressures. ASML, the Dutch company that makes extreme ultraviolet lithography machines essential for advanced chip production, found itself at the center of US-China tech competition despite being based in a neutral country. The US successfully pressured the Netherlands to restrict ASML's sales to China, demonstrating how network centrality can override national sovereignty.

Beyond Economics: The Democracy vs. Authoritarianism Frame

Newman suggests that Trump's approach goes beyond traditional economic competition. It's part of a broader contest between different models of governance and technology development.

China's alternative systems—from Alipay and WeChat Pay challenging Visa and Mastercard, to TikTok competing with Meta's platforms—represent more than business competition. They offer different visions of how digital networks should be governed, who should control data, and what role states should play in economic coordination.

This explains why the US response has been so aggressive. It's not just about market share or trade balances—it's about which governance model will shape the digital economy's future architecture.

The Unintended Consequences: Fragmentation and Innovation

Weaponizing interdependence creates powerful incentives for targeted countries to build alternative networks. China's massive investments in domestic semiconductor capabilities, alternative payment systems, and indigenous technology platforms represent a direct response to US network leverage.

This "decoupling" or "de-risking" trend could fundamentally reshape global economic geography. Instead of one interconnected global economy, we might see the emergence of competing economic blocs, each with its own technological standards and governance rules.

For smaller countries and companies, this fragmentation creates both risks and opportunities. They might gain more bargaining power as great powers compete for their alignment, but they'll also face pressure to choose sides in conflicts that may not serve their interests.