​​​​​​​China Has Turned Trade Dependence Into Strategic Leverage

Northern Trust’s latest Weekly Economic Commentary examines a world caught between renewed Middle Eastern energy disruption and China’s growing willingness to weaponise its position in global supply chains.

• China is now the largest goods exporter and the largest trading partner of roughly 150 countries, giving Beijing an economic network that can increasingly be converted into political leverage.

• The strongest chokepoint remains critical materials: China accounts for more than two-thirds of rare-earth extraction and over 90% of refining and processing capacity.

• Europe sits squarely inside the dilemma. Its annual goods deficit with China exceeds €300 billion, while efforts to reduce strategic dependence risk Chinese retaliation; deeper integration, however, increases Beijing’s leverage.

Read the full commentary for how energy chokepoints and trade dependencies are increasingly turning economic relationships into instruments of geopolitical power.