If you wanted to, how could you go about trying to isolate the US economically?

We asked Shippo, our AI assistant, to tell us how, if the countries of the world outside the US, collectively or individually, wanted to take steps to isolate the US economically, they could go about doing it.

Here’s Shippo’s report.

We expect a report not unlike Shippo’s lies well-thumbed on the desks of many world leaders outside the US, including Australia, right now.

If the rest of the world wanted to economically isolate the United States, they could employ a combination of tariffs, sanctions, trade restrictions, and financial measures to cut the US off from global markets. Here’s how they might do it:

1. Trade Barriers & Tariffs
• High Tariffs on US Goods: Countries could impose high tariffs on American exports, making them less competitive.
• Import Quotas: Limiting the amount of US goods that can be imported.
• Preferential Trade Agreements: Countries could exclude the US from new trade pacts while favouring alternative suppliers.

2. Financial & Banking Restrictions
• Ban the Use of the US Dollar: The global economy is deeply tied to the US dollar. If countries coordinated to conduct trade in alternative currencies (like the euro, yuan, or a new trade-backed currency), it could weaken the dollar’s dominance.
• Exclude US Banks from SWIFT or Alternative Payment Networks: If countries created their own financial messaging system and excluded US banks, it would limit American access to global finance.
• Freezing US Assets & Foreign Reserves: Foreign nations could seize or freeze U.S.-held assets in their jurisdictions.

3. Energy & Commodity Restrictions
• Oil & Gas Embargo: Major oil-producing countries could cut off exports to the US, forcing reliance on domestic production.
• Rare Earth Minerals & Key Raw Materials: Many critical raw materials for technology (such as lithium, cobalt, and rare earth elements) come from outside the US. If exporters stopped supplying these materials, American industries would struggle.

4. Manufacturing & Supply Chain Disruptions
• Restrict Technology & Semiconductor Sales: The US depends on Asian countries (especially Taiwan and South Korea) for advanced semiconductors. Cutting off access to these could cripple tech industries.
• Re-shoring Manufacturing Away from the US: Countries could move supply chains away from the US, avoiding American companies.

5. Sanctions & Diplomatic Pressures
• Boycotting US Products & Services: Global consumers and businesses could shift away from American brands.
• Visa Restrictions on US Citizens & Business Leaders: Preventing travel to key markets would limit business opportunities.
• Cutting Military Cooperation: Many US companies rely on arms exports; if allies refused to buy American weapons, it could hurt the defence industry.

Challenges & Unintended Consequences

Shippo added this cautionary note however: While complete economic isolation would be nearly impossible, a coordinated effort could significantly weaken US economic dominance over time. It would though likely come at a high cost to participating countries as well, for these reasons:
• The US is the world’s largest consumer economy, and many countries rely on American demand. Cutting off trade could hurt their own economies.
• The US dollar is deeply embedded in global finance; replacing it would take decades.
• Many multinational corporations (even non-US ones) have deep ties to the American economy, making full isolation difficult.

Credit Feifei Peng and Unsplash

By Michael Barker, Editor, Fremantle Shipping News

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