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Foreign Policy

Weaponized Interdependence is an Obstacle for U.S.-China Relations

Apr 19, 2023

Economic sanctions and their use, significance, and efficacy are becoming more relevant after the outbreak of war in Ukraine, as Russia, Iran, and China all consider how to better prepare against future U.S. sanctions. That being said, it is clear that unilateral or aggressive U.S. sanctions have accelerated the process of global multipolarity. 

The U.S.-China relationship is at the forefront of global politics, shaping the future of international trade, technology, and security. The concept of weaponized interdependence, where powerful states leverage their position in the worldwide network to achieve strategic goals, has become increasingly relevant. The U.S. uses its unprecedented market power and vast network of alliances to essentially cut adversaries out of the global dollar-dominated system. Weaponized interdependence will continue to play an important role in U.S.-China relations, as Washington attempts to punish Beijing in instances where the two superpowers disagree on geopolitical issues. 

Globalization has created a highly interconnected world, with specific network hubs disproportionately located in advanced industrial countries. Since WWII, the United States has undoubtedly contributed to and maintained control of the world’s financial and economic infrastructure. The U.S. intends to maintain control at the expense of the national security concerns of other powers throughout the globe.  

The United States and China have emerged as critical players in this network, enjoying the benefits of weaponized interdependence while leveraging state power to protect themselves from vulnerabilities. The concentration of crucial data traffic channels and cloud providers in the United States and initiatives like China's exclusion of certain foreign companies and the development of domestic competitors exemplify this trend. However, the U.S. has done more to influence domestic politics in adversarial nations, or achieved zero-sum foreign policy goals by leveraging its position within the global networks. 

Washington has used the post-WWII security structure to court and maintain allies who actively engage in coalition building with the United States. These coalitions are then leveraged to effectively isolate potential competitors, whether global or regional. The combination of EU and U.S. sanctions against Iran, for example, led to its isolation from the SWIFT financial messaging system. Similar steps were taken against the Russian Federation after its invasion of Ukraine. Now, as China and Russia cooperate more closely, Beijing can effectively worry about similar actions against its own institutions. The State Department and other important officials in the United States have all warned Beijing about its close relationship with the Kremlin. 

This demonstrates how significant powers can leverage weaponized interdependence to achieve political goals. In response, some countries have sought to create alternative methods, such as Russia's System for Transfer of Financial Messages' (SPFS) and China's Cross-Border Interbank Payment System (CIPS), to facilitate cross-border transactions and reduce reliance on the U.S.-dominated global financial system. In truth, these efforts are preventive, but are creating new ecosystems which will jeopardize the U.S.-led world order. 

Measures taken by the Trump administration, and then maintained or expanded by the Biden administration, also proved that Washington would utilize import and export controls to hurt Beijing regardless of its effects on domestic economies or allies. The U.S.-China trade war has had mixed effects on global trade. While some smaller players benefited from redirected work, overall economic growth suffered. For example, Vietnam, Taipei, and Bangladesh have seen increases in exports to the U.S., while other countries like Brazil have benefited from China's tariffs on U.S. soybeans. In addition, smaller states have attempted to improve their negotiating positions by adapting to changing global dynamics. Perhaps most important is the increase of global tensions as a result of unilateral and aggressive sanctions. In sanctioning competitors, the U.S. is hurting an adversary while simultaneously encouraging multipolarity and parallel systems. 

Caught between the U.S. and China, countries like Japan have adopted hedging strategies, cooperating with both powers while avoiding confrontation. The Quadrilateral Security Dialogue, involving Australia, Japan, India, and the United States, and the Asia-Africa Growth Corridor, developed by Japan and India, exemplify these efforts. Other states, such as Serbia, have also employed hedging tactics in response to perceived failures of regional powers like the EU. In many circumstances we see countries taking steps to become more independent and resilient to U.S. sanctions. 

Narratives play a critical role in the effective deployment of weaponized interdependence. China, for instance, has developed a description promoting international cooperation and development through initiatives like the Belt and Road Initiative (BRI). This narrative allows China to wield influence in the global south and counterbalance U.S. dominance in specific sectors. Moscow and Beijing have also used rhetoric and diplomacy to criticize the U.S. for its use of unilateral sanctions and foreign policy. Time will tell, but Beijing and Moscow’s efforts have been somewhat appreciated in much of the global south, as the United States has only managed to maintain massive political influence in Western Europe and the Anglosphere. 

The U.S.-China relationship, characterized by weaponized interdependence, has significant implications for global governance, trade, and security. As these major powers compete and collaborate, smaller states must adapt their strategies to maximize opportunities and minimize risks. The future of international relations will be shaped by the evolving dynamics of this complex interdependence, and it is crucial for policymakers to understand and navigate these challenges effectively. Despite the damage done by Washington’s use of weaponized interdependence, it is abundantly clear that its methods will at least in some degree accelerate multipolarity and weaken the role of the U.S. dollar in global markets. 

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