Weaponized interdependence

Working Definition

Weaponized interdependence is a condition in which a state exercising legal and physical jurisdiction over the central hubs of global economic, financial, informational, or manufacturing networks exploits those hubs for surveillance and coercion against other states and private actors. The concept overturns the liberal myth that globalization creates a flat, decentralized web of mutual dependence that restrains all parties from conflict; in reality, market efficiency drives global networks toward a “hub-and-spoke” topology that concentrates flows through a handful of critical bottlenecks. A state that commands such a hub wields two distinct forms of structural power: the panopticon effect—the ability to monitor information and transactions passing through the network’s center—and the chokepoint effect—the ability to cut off a targeted country or corporation from global exchange altogether.

Genesis and Global Lineage

The concept was formulated by American political scientists Henry Farrell and Abraham L. Newman in their 2019 International Security article Weaponized Interdependence: How Global Economic Networks Shape State Coercion and expanded in their book Underground Empire (2023). Their theory fused Albert O. Hirschman’s classic analysis of asymmetric foreign trade (National Power and the Structure of Foreign Trade, 1945) and Robert Keohane and Joseph Nye’s “complex interdependence” (1977) with Albert-László Barabási’s mathematics of scale-free networks. For two decades after the Cold War, mainstream commentary (epitomized by Thomas Friedman’s “flat world”) assumed that global supply chains and the internet dispersed power away from nation-states toward markets. Farrell and Newman demonstrated that private firms chasing network effects and returns to scale had inadvertently built hyper-centralized infrastructural monopolies—New York dollar clearinghouses, the SWIFT messaging network in Belgium, US cloud hyperscalers, and semiconductor lithography hubs in the Netherlands and Taiwan—which governments after September 11, 2001 learned to repurpose as instruments of statecraft.

Central European Lineage

The theoretical foundation of weaponized interdependence grew directly out of the study of how Nazi Germany economically subordinated Central and Southeastern Europe in the 1930s. When Albert O. Hirschman wrote National Power and the Structure of Foreign Trade (1945) at Berkeley during World War II, his empirical centerpiece was Hjalmar Schacht’s 1934 “New Plan” toward Hungary, Romania, Bulgaria, and Yugoslavia. Berlin offered these smaller agrarian and raw-material states above-market prices, but settled balances in blocked Reichsmark clearing accounts, locking a massive share of their exports into a single dominant buyer and stripping them of diplomatic autonomy before a single shot was fired. Farrell and Newman (2019) explicitly took Hirschman’s 1945 model as their baseline, scaling it from bilateral trade treaties to global network topologies. In the twenty-first century, Central and Eastern Europe once again became the frontline testing ground for competing regimes of weaponized interdependence: for two decades Poland, Ukraine, and the Baltic states warned against Germany’s doctrine of Wandel durch Handel (“change through trade”) and Russia’s Nord Stream 1 and 2 pipelines, which turned gas transit into a physical chokepoint aimed at Central Europe; the 2022 culmination—Gazprom shutting pipeline valves while the G7 and EU froze Russian central bank reserves and severed Russian banks from SWIFT—became the canonical empirical test case in Farrell and Newman’s Underground Empire (2023).

Why Now

Between 2018 and 2026, weaponized interdependence became the primary grammar of great-power rivalry. The turning point arrived in 2018–2020 when the United States invoked the Foreign Direct Product Rule (FDPR) to bar any chipmaker worldwide from supplying Huawei if its manufacturing process used US electronic design automation (EDA) software. In February 2022, following Russia’s full-scale invasion of Ukraine, the G7 and the European Union triggered the most sweeping financial chokepoint in modern history by immobilizing roughly $300 billion of Russian Central Bank reserves held in Western clearinghouses (above all Euroclear in Brussels). Then in October 2022 (with tightening rounds in 2023–2025), Washington imposed sweeping export controls on advanced AI accelerators (Nvidia) and extreme ultraviolet (EUV) lithography machines produced by the Dutch firm ASML. In retaliation, between 2023 and 2025 Beijing weaponized its own industrial chokepoints: its near-monopoly over the refining of gallium, germanium, graphite, and rare-earth magnets essential for green tech and defense.

Explanatory Power

Farrell and Newman’s framework explains why seemingly mundane engineering or financial clearing standards grant certain states disproportionate geopolitical leverage. The first mechanism—the panopticon effect—came to light in Edward Snowden’s 2013 disclosures and post-2001 Treasury surveillance: because a vast share of global internet traffic physically routes through switches and subsea cables touching US territory, and international bank transfers pass through SWIFT’s servers near Brussels, states with legal jurisdiction over those nodes gain an unmatched X-ray of global commerce. The second mechanism—the chokepoint effect—explains the extreme asymmetry of the semiconductor war: the entire planetary supply of cutting-edge logic chips (below 5 nanometers) converges on TSMC’s fabs in Taiwan, which cannot operate without EUV lithography machines built exclusively by a single company in the Netherlands (ASML), whose light sources rely on California patents and components. Whoever holds regulatory jurisdiction over that narrow technological isthmus can halt industrial development across the globe with a single signature.

Axes of Debate

Underappreciated Angle

The least examined consequence of weaponized interdependence is what it does to the domestic constitutional order of liberal democracies themselves. Turning private commercial and technological networks into instruments of geopolitical coercion requires sprawling administrative bureaucracies (such as the US Treasury’s OFAC or the Commerce Department’s Bureau of Industry and Security) operating largely through executive orders and blacklists outside ordinary parliamentary debate and judicial review. States draft private banks, universities, and chipmakers as frontline border guards enforcing foreign policy under threat of ruinous fines. This breeds systemic overcompliance and a quiet politicization of private law: banks preemptively de-risk entire regions or diaspora communities, academic collaborations are chilled, and the classical liberal boundary between a commercial contract and an act of hybrid warfare dissolves.