The global economy has entered a new phase. Trade wars were once about tariffs and broad restrictions. Today, governments prefer targeted strikes. Export controls and sanctions have become the main weapons of geoeconomic pressure. The U.S. restricts sales of advanced chips to China, Beijing threatens to cut rare earth exports, and Moscow uses natural gas as leverage. These moves don’t hit thousands of companies at once – they focus on a few sectors where dependence is critical and substitutes are scarce. The consequences are vast: companies lose markets, states rebuild supply chains, and third countries unexpectedly gain by stepping into the gaps.
Geoeconomic pressure is now a defining feature of international politics. Its logic is simple: states use existing economic ties to force rivals to change behavior. It doesn’t always mean outright bans. More often it comes as hints, threats, or partial restrictions that create uncertainty. That alone reshapes corporate strategy, drives investment in new technologies, and pushes firms to diversify markets.
Unlike tariffs that hit broad sectors, export controls and sanctions act like a scalpel. They target the chokepoints of the global economy: products and resources without which entire industries stall. That is why Washington and Beijing focus on chips, rare earths, and telecoms. Europe, meanwhile, became hostage to Russian gas. In each case, barriers are absolute. Once access is cut, there is no quick workaround.
The U.S. chip policy has become the symbol of this new era. In 2022, Washington banned sales of advanced GPUs – the A100 and H100 – to China. For NVIDIA, the world’s leading chipmaker, this was a direct hit on revenues. The company tried to soften the blow by offering modified products to Chinese clients, but uncertainty remained. Losing access to the world’s largest market meant not only lower sales but also higher business risk.
The case of Dutch company ASML is just as telling. ASML is the only maker of EUV lithography machines needed for cutting-edge semiconductors. The U.S. pushed the Dutch government to restrict ASML’s sales to Chinese firms. For ASML, this meant losing a multibillion-dollar market. Washington relied on a legal tool known as the “foreign direct product rule,” which extends U.S. control to foreign firms if they use American technology. The result: political pressure effectively rewrote ASML’s business model.
China responded quickly. Semiconductor giant SMIC saw its sales fall under U.S. restrictions. But instead of retreating, the company doubled down on domestic investment and sharply raised spending on R&D. The goal was clear: build homegrown alternatives and cut reliance on foreign suppliers. Chinese firms also reshaped their supply chains, turning to South Korea, Vietnam, and Malaysia.
Export controls thus had a double effect. They limited China’s immediate options, but they also accelerated its drive toward technological autonomy. U.S. and European companies lost market share, while China gained fresh momentum to innovate.
Sanctions are not new, but they now play a larger role in global strategy. Russia became the main target. The first wave came in 2014; the second, much broader, in 2022. The sanctions covered finance, trade, and energy. Western firms lost access to the Russian market, while Russia redirected oil and gas exports to Asia – mostly to China and India, and often at a discount. Those countries became the big winners.
Iran faced narrower but no less painful measures. After Washington pulled out of the nuclear deal in 2018, sanctions hit oil exports. Revenues collapsed, and transport of crude became harder.
China was also sanctioned, though in a much more selective way. Huawei and ZTE were targeted between 2019 and 2021 with bans on buying or selling telecom equipment. These restrictions forced both firms – and the Chinese state – to speed up investment in alternative technologies.
The pattern is the same: sanctions hurt, but they also push companies and states to adapt.
Why do governments focus on these areas? Because they are the most vulnerable.
Semiconductors are example number one. Without modern chips, no economy can sustain its defense sector or advanced industries. The U.S. holds key positions in design and equipment, so restrictions here cause maximum disruption.
Rare earths are China’s lever. They are essential for electronics, batteries, and defense systems. With Beijing controlling such a large share of global production, even the threat of export cuts shakes markets.
Oil and gas are Russia’s main weapon. Europe spent decades relying on Russian energy. When supplies were cut back in 2022, the continent was hit with an energy crisis.
These are the chokepoints of the global system. Where dependence is deepest and alternatives are scarce, pressure delivers the strongest results.
Geoeconomic pressure rarely affects only one side.
U.S. and European companies lose revenue. NVIDIA and ASML gave up part of the Chinese market. European firms feared the loss of Russian energy.
Chinese firms suffered too, but they boosted investment in domestic R&D and shifted supply chains. They turned toward new partners in Asia and built capacity at home.
Russian firms lost Western clients but found new buyers in Asia.
Third countries often benefit. India gained access to cheap oil. Vietnam and Mexico attracted production as companies moved supply chains out of China.
Export controls and sanctions are no longer temporary tools. They are becoming permanent features of global politics. Governments know their power, and they are ready to use them.
Companies have no choice but to adapt. They spend more on research, diversify supply chains, and look for new markets. The global economy is moving toward a more fragmented but more resilient model. Each country tries to reduce its exposure to critical vulnerabilities.
Those who adapt fastest will come out ahead. China is pushing harder on innovation. India is securing a stronger role in the oil trade. Southeast Asia is turning into a new hub for production.
Export controls and sanctions have already redrawn the map of the global economy. The U.S. and China are hitting each other at the chokepoints. Russia and Iran faced sweeping restrictions but found alternative markets. Europe discovered the cost of over-reliance on a single supplier. And third countries gained advantages they never expected.
The main lesson is clear: in today’s world, economics is no longer just about production and trade. It is a weapon. Those who can exploit the chokepoints hold the upper hand. In the years ahead, export controls and sanctions will become the norm. The old rules are gone for good.
Alen Serik, expert of the portal EconomyKZ.org
