Donald Trump’s peace deal with Iran represents a disastrous climbdown for American foreign policy. It is catastrophic for Benjamin Netanyahu. Israel is now completely isolated on the global stage. Whether the deal holds is anyone’s guess, but Trump’s promise to guarantee $300 billion to Iran smacks of the “pay up or else” extortion tactics by which MAGA tried to redefine global relations. But now it’s Washington having to pay up. Trump claims that the United States agreed to these terms to prevent the world from plunging into a global depression. That’s something he should have thought of before going along with Netanyahu in launching the war. Iran’s decision to play hardball in the Strait of Hormuz has turned the tables completely. For decades, the Americans maintained their dominance through control of key military, geographic and economic chokepoints. There isn’t a more strategic chokepoint than the Strait of Hormuz, and the theocratic regime in Iran has taught a power lesson to Washington about what happens when you miscalculate how dependent you are on access to the chokepoint. The 21st century was supposed to be the era in which American hegemony would be guaranteed, not so much by its overwhelming military power as by its ability to control the key strategic and economic chokepoints. The theory is laid out in the new book Chokepoints: American Power in the Age of Economic Warfare by Edward Fishman where he argues that American dominance has been guaranteed through its control of the global financial system. If you are buying wheat from Ukraine or importing oil to Japan, you are not carrying out these transactions in hryvnia, yen, or even the Euro. It’s done in US currency. The American dollar is the global currency for trade. So much so that 90% of all global currency transactions involve the dollar. Without the currency, international trade becomes much more complicated. This is why the rest of the world has remained committed to propping up the US financial system even as the country buries itself in debt and reckless economic policies. The United States also uses other tools to maintain control of the global financial system. To move large sums of currency to pay for these trade purchases, you are dependent on one of two US-based trading systems. The first is the Clearing House Payments System (CHIPS), and the other is the Federal Reserve Wire (Fedwire) system. If you are denied access to either system, good luck trying to run a business or economy. It has been said that this is like trying to travel the world without a passport. These financial tools are the key “chokepoints” - over which the United States exercises influence and coercion well beyond the realm of military threat. It is also how they have targeted narco money and terrorist financing. This extraordinary power lies in the hands of the President. He doesn’t need to go to Congress for permission. Robert Rubin, the Treasury Secretary under Clinton, warned that “once you do it, you become a less reliable supplier.” When that power is abused, it undermines trust. Even before Trump, the bullying of allies to freeze out Chinese competition like Huawei and Chinese EVs moved from trade irritants to growing disquiet. The US wielded a big stick, and the allies got nothing in return for acquiescing. Under Trump, the abuse of these levers has become much bolder. It is the means that he is using to try to break the people of Cuba. The tools are used against airlines, hotel chains and VISA. Not a good look. He has also used it against respected international voices. This past March, the United States froze the assets of UN Special Rapporteur Francesca Albanese, who was preparing reports on human rights abuses against civilians in Palestine. They cut off her access to any US-based financial institution. Her crime? Recommending that Benjamin Netanyahu be charged with war crimes for his conduct of the war in Gaza. Trump then targeted Canadian jurist Kim Prost, who is on the International Criminal Court. These actions represent direct threats against both the United Nations and the international rule of law. It has made the United States look like a rogue state doing the bidding of Israel. Such dangerous overreach forces countries to reconsider their willingness to go along with these chokepoints. The Iran war put the global economy at risk without any perceivable strategic goal other than allowing Trump and Netanyahu to stay one step ahead of their scandals. Little wonder that Canada and the European allies are looking to establish new trading and security systems while leaving the United States increasingly isolated. The Iran deal has been even more disastrous for Israel. Trump has turned on Netanyahu. For the first time, the G7 has shown a willingness to call out Israel for its brutal invasion of Lebanon. The fallout of the Iranian disaster is just beginning. Iran has taught the world’s most powerful empire a lesson in the politics of the chokepoint. For the rest of the world, it has become a strategic necessity to find a way out of the American chokepoints. Way to go, Donald… If any photos or images on this site are under copyright, please let us know and we will provide appropriate credit. This content is used in accordance with applicable copyright laws, including “fair dealing” under Canadian law and “fair use” under Section 107 of the U.S. Copyright Act, for purposes such as criticism, comment, and news reporting.Thank you for reading Charlie Angus / The Resistance. If you’d like to upgrade to a paid subscription your support will help keep this project independent and sustainable. I’m grateful to have you here - thank you for your support.
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