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Background: The Rise of Weaponized Interdependence

The weaponization of interdependence (Farrell and Newman, 2019) is now a defining prism for scholarly and policy analysis of 21st century geopolitical and geoeconomic competition.

US positionality in global economic exchanges and information flows provides it with unmatched network power. It is exercised in two ways:

  1. Panopticons: Leveraging of centrality in global  exchanges and flows for surveillance purposes.
  2. Chokepoints: Leveraging of access to bottlenecks in (e.g., in supply chains) to deny access.
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Argument: Network Power and Higher-Order Effects

While states have practiced military and economic power for centuries, network power is still poorly understood.

Precisely because power is exercised in complex networks, the consequences of using panopticons and chokepoints are frequently non-linear.

 

Thus, weaponized interdependence comes with higher-order effects. Specifically, I argue that:

Costs are often imposed not just on foes but also partners, producing an unintended backlash that undermines long-term strategic imperatives.

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Panopticon Backlash: Global Information Flows

Causal Mechanism

1) Network Centrality: US Position

  • Service Providers: US companies dominate cloud storage, social networks, operating systems etc. in many countries globally.
  • Internet Routing: Much of global internet traffic passes through the US or 'friendly territory'.

2) Panopticon Usage: Weaponizing Information

  • PRISM: Collection of data directly from servers of US service providers.
  • Upstream: Collection of data on communication infrastructure routing (primarily) through the US.

3) Indiscriminate Targeting: Mass Surveillance

  • Panopticon usage shifts doctrine from targeted to mass surveillance of global communications.

4) Partner Backlash: Data Sovereignty

  • US partners restrict cross-border data flows and up localization requirements: Stricter laws on data processing/storage/transfer (e.g., in Germany); Proposals for regional routing (e.g., "Schengen routing"); Efforts for sovereign cloud (e.g., European Gaia-X).

 

Indiscriminate targeting from panopticon usage incentivizes US partners to strive for autonomy at the expense of an integrated digital economy.

 

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Chokepoint Backlash: Global Supply Chains (Semiconductors)

Causal Mechanism

1) Network Access: US Position

  • US control: The US is the global leader in semiconductors, esp. in design.
  • Wide access: The remaining semiconductor supply chain is dominated by US partners, especially Japan, Taiwan, Korea, and the EU.

2) Chokepoint Usage: Weaponizing Chips

  • ASML (Dutch): US gov. pressed Dutch government to deny Chinese firms ASML’s cutting-edge EUV photolithography tooling.
  • TSMC (Taiwanese): US Trump admin. threatened cutting off access to (Dutch!) ASML tooling unless TSMC boycotts Huawei.

3) Collateral Damage: Tech Access Concerns

  • Chokepoint raises concerns about tech access and value-creation in partner economies.

4) Partner Backlash: Supply Autonomy

  • US partners ramp up tech industrial policy and focus on cutting-edge competitiveness: Relaxing of state aid rules (e.g., EU IPCEI); re-shoring of production; promotion of open standard ISA (instruction set architecture) (e.g., RISC-V).

 

Collateral damage from chokepoint usage incentivizes US partners to strive for autonomy rather than complementarity in supply chains.

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Conclusion: Towards a Better Understanding of Network Power

Theory insight:
Network power is currently discussed with little appreciation for the broader strategic ramifications of its usage, especially on partnerships.

Empirical findings:
The US’ leveraging of panopticons and chokepoints is becoming an impediment to its primary strategic goal: crafting a coalition of like-minded democracies against its declared ‘strategic competitor,’ China.

Policy insight :
Achieving policy goals through network power requires anticipating higher-order effects, coordinating with partners, and embedding network power in a long-term grand strategic framework.

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Key Bibliography

Drezner, Daniel W., Henry Farrell, and Abraham L. Newman, eds. 2021. The Uses and Abuses of Weaponized Interdependence. Washington, D.C.: Brookings Institution Press.

Farrell, Henry, and Abraham L. Newman. 2019. “Weaponized Interdependence: How Global Economic Networks Shape State Coercion.” International Security 44(1): 42–79.

Keohane, Robert O. 2012. Power and Interdependence. 4th ed. Boston, MA: Longman.

Edmundson, Anne, Roya Ensafi, Nick Feamster, and Jennifer Rexford. 2018. “Nation-State Hegemony in Internet Routing.” In Proceedings of the 1st ACM SIGCAS Conference on Computing and Sustainable Societies, COMPASS ’18, New York, NY, USA: Association for Computing Machinery, 1–11.

Breton, Thierry. 2021. “How a European Chips Act Will Put Europe Back in the Tech Race.” European Commission. https://ec.europa.eu/commission/commissioners/2019-2024/breton/blog/how-european-chips-act-will-put-europe-back-tech-race_en (September 22, 2021).

 

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Abstract

The weaponization of economic and information interdependence is at the center of vivid scholarly and policy debates. US centrality in these networks is considered a powerful advantage, providing it with the unmatched ability to surveil activity (through panopticons) and deny access (through chokepoints). Yet, network power is theorized – and deployed – with little appreciation for its broader strategic implications. I argue that, precisely because states act in complex networks, consequences from panopticon and chokepoint usage are frequently non-linear. This leads to profound higher-order effects: Costs are potentially imposed not just on foes but also partners, producing a backlash that undermines long-term strategic imperatives. Focusing on international data flows and semiconductor supply chains, I demonstrate how the US’ leveraging of panopticons and chokepoints is now surfacing as an impediment to its primary strategic goal: crafting a coalition of like-minded democracies against its declared ‘strategic competitor,’ China. While states have practiced military and economic power for centuries, network power is still poorly understood. My findings stress the importance of anticipating higher-order effects, coordinating with partners, and embedding network power in a comprehensive and long-term grand strategic framework.

The weaponization of economic and information interdependence is at the center of vivid scholarly and policy debates. US centrality in these networks is considered a powerful advantage, providing it with the unmatched ability to surveil activity (through panopticons) and deny access (through chokepoints). Yet, network power is theorized – and deployed – with little appreciation for its broader strategic implications. I argue that, precisely because states act in complex networks, consequences from panopticon and chokepoint usage are frequently non-linear. This leads to profound higher-order effects: Costs are potentially imposed not just on foes but also partners, producing a backlash that undermines long-term strategic imperatives. Focusing on international data flows and semiconductor supply chains, I demonstrate how the US’ leveraging of panopticons and chokepoints is now surfacing as an impediment to its primary strategic goal: crafting a coalition of like-minded democracies against its declared ‘strategic competitor,’ China. While states have practiced military and economic power for centuries, network power is still poorly understood. My findings stress the importance of anticipating higher-order effects, coordinating with partners, and embedding network power in a comprehensive and long-term grand strategic framework.

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