Yesterday’s News 2026-09-07

curated news excerpts & citations
… trying to ‘unbury the lede’

Embargo Act illustration

Paul Krugman:
Who has the power in a trading world?

On Friday Donald Trump threatened to cut off all trade with nations with which the United States runs a trade deficit. His demand, oddly, was directed at the Federal Reserve: He would impose trade embargoes unless the Fed cuts interest rates. I won’t even try to untangle his logic, if there is any, because today’s primer isn’t about Trump. It is, instead, about how to think about a world in which governments — even the government of the United States, which created the rules-based trading system that prevailed until recently — increasingly use threats to cut off international trade as a tool of coercion.

… “weaponized interdependence,” a term coined in 2019 by the political scientists Henry Farrell and Abraham Newman. Farrell and Newman focused mainly on national governments’ efforts to exploit their control of international networks, such as America’s use of the dollar’s central role in the international monetary system to impose sanctions on nations it considers hostile. At this point, however, weaponized interdependence is everywhere: Iran attempting to force the United States to call off its war by closing the Strait of Hormuz, China threatening the West with a cutoff of rare earths, the Trump administration using the threat of tariffs to pressure Canada to remove cultural protections for French — or become the 51st state?

(Paul Krugman   more…)

Dean Baker @ National Memo:
Liberated? Despite Trump Tariffs, Steady Trade Deficit Jumped In July


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