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Prof. Michael Hudson, a world-renowned classical economist, discusses the US plan to revive its geoeconomic dominance.
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Hudson argues the US is executing a deliberate strategy to maintain global dominance through controlling four monopolies—oil, information technology, transportation corridors, and the dollar payment system—by weaponizing economic sanctions and military force against rivals while extracting tribute from dependent allies, but this strategy faces existential constraints from the inability to keep both rivals and vassals subordinate simultaneously.
- The US abandoned post-WWII win-win hegemony for explicit zero-sum extraction: forcing oil producers to recycle revenues into US assets and accepting US-imposed 'toll' monopolies on trade routes
- Rivals (Russia, Iran, China) are developing independent alternatives (Arctic shipping, pipelines, alternative payment systems) faster than the US can impose choke points
- US vassals (Europe, Middle East monarchies) face political collapse if they continue acting against their economic interests, creating instability that undermines the entire system
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Post-WWII US hegemony was 'benign': the US ensured prosperity in allied frontline states (West Germany vs East, South Korea vs North, Taiwan vs mainland) so they would remain loyal; this created mutual benefit, but current US strategy under Trump abandons this model and cannibalizes allies, making hegemony unsustainable.
“after World War II, the US free trade empire, I mean, yeah, for example, the Europeans were completely subordinated to the US. However, at least it was beneficial to some extent. The US was considered benign hegemon. That is, who made sure that its frontline states were prosperous. That is, that the Western Germans were more prosperous than Eastern Germans, the South Koreans were more prosperous than North Koreans, and Taiwanese Chinese were more prosperous than mainland Chinese. So, you know, the frontline states were thriving. But now, as the US can't afford this format for well, for its dominance in war, it begins to cannibalize its rivals, demand excessive uh vassalage,”
Trump's strategy requires controlling international transportation—both maritime shipping routes and overland pipelines—to prevent rivals from exporting oil and to force all trade to pass through US-controlled chokepoints.
“In order to uh the oil imposing the US control of the world oil trade to get its income for itself and the artificial intelligence computer technology trade, uh it the US does need to control shipping and international transportation as well because the way that how can you export your oil without doing it by ships or by overland means such as a pipelines. Well, the United the the very first fight that Trump picked with Europe and most of the America's main I won't say enemy, but its main opponent is of course Europe. It its allies Europe, Japan, and its other allies.”
The US destroyed the Nord Stream pipelines and is now using NATO allies in the Baltic to prevent Russian oil exports through the Latvian port of Ventspils, violating UN law of the sea to block Russian trade while preventing Russia from accessing independent export routes.
“this this required two things. Number one, the blowing up of the North Sea pipeline as we've discussed. But number two, what you're seeing now, the constant bombing of Russian shipping through the Baltic. The exportation through for long-term a long time Russia exported its oil through the Latvian East Coast of Ventspils that went through the Baltic. Russia's now still exporting oil through the Baltic and you have Estonia Latvia permitting you in NATO basically great stopping Russian oil exports through the Baltic. Well, all of that violates the UN law of the sea. That's not free trade.”
China has developed alternative payment systems to the Swift bank clearing system and alternative oil and transportation infrastructure through the Belt and Road Initiative, creating independent pathways that undermine US sanctions and financial control.
“The United States tried to exclude its rivals from the Swift bank clearing system. China set up an alternative to that. Everything the United States has done by imposing financial sanctions on other countries to try to say, 'Well, we can cut off your financial payments without How can there be an oil trade? How can there be a trade and industrial products if uh you can't process the payment for it? You not only need to transport this trade, you need to transport the transfer the monetary payments. So, we're controlling that system, too.”
From 1971 to recently, US military spending abroad was recycled back into the US through foreign central banks purchasing Treasury securities and, more recently, through foreign private investors buying US stocks and bonds, primarily funding the US stock market which has been driven up mainly on debt.
“From 1971 till very recently, what took the place of gold? US spent money in the foreign markets. Foreign markets were recycling this to the United States. At first local recipients of dollars, companies, economies, governments would turn over the dollars to the central bank and what would the central bank do? Well, as we've discussed it before and as I discussed in my book Super Imperialism, foreign central banks bought US Treasury IOUs, Treasury bonds, securities, notes are short-term. Uh and then in the last few years, uh instead of this intergovernmental central bank recycling, you had foreign private investors buying US stocks, US bonds. All of this money was recycled into the US stock market that was mainly being uh driven up uh on on debt.”
Europe is not acting in its economic self-interest by subordinating itself to US dominance; European countries need inexpensive energy to power their industry and avoid deindustrialization, but instead accept higher-priced US liquefied natural gas and military dependence, resulting in economic decline.
“Well, Europe isn't acting in its economic self-interest. That would be to get inexpensive energy to power its industry and avoid the deindustrialization that you're seeing in Germany and other NATO countries. It can't afford the higher prices of oil and its chemical industry can't afford to operate at a profit when there is an interruption of the derivatives of the oil trade, sulfur to make sulfuric acid for mining and fertilizer made out of natural gas, not to mention helium, the one of the first production sites that Iran hit was in Qatar's helium production that was itself 20% of the world's helium trade, totally destroyed.”
This military escalation is existential on both sides—the US is fighting to maintain global hegemony while Russia, Iran, and China are fighting for national survival—ensuring the conflict will continue to be very destructive and create massive collateral damage to the global economy, African economies, and the global South through food crisis.
“I say this escalation is if it really is existential on both sides, then it's going to continue to be very destructive and the collateral damage will be the world economy, the Asian economy, Africa, and the global south that is not going to get the fertilizer that's going to reduce their crop their ability to feed themselves, and uh they're essentially subject them to famine. This This is This year, 2026 is going to be a world historical year for the showdown when the dynamics that we've been discussing all come together.”
The petrodollar agreement of 1974-1975 guaranteed that OPEC could charge any price for oil and would recycle oil earnings into US financial markets (stocks and bonds), creating the mechanism for US hegemony after the end of the gold standard.
“the whole idea of the petrodollar agreement of 1974-1975, that uh OPEC could charge whatever it wanted for its oil, and it would be uh reinvested oil earnings in the US financial market, stocks and bonds. Well, all of that was working.”
The durability of the US strategy fundamentally depends on whether semi-feudal Arab monarchies can survive as US clients; these regimes are increasingly unpopular as their populations are Palestinian, Indian, or face extreme inequality, creating conditions for political upheaval like occurred after World War I.
“the success of this US policy depends on how long can the Arab Middle East be ruled by these rotten semi-feudal monarchies? How long can the Emirates survive? How long can Jordan, Bahrain, Saudi Arabia itself survive when most of the population is either Palestinian or Indian, or you have a very unequal society by Emirates who basically uh control the economies and have thrown in their lot with the United States. Uh this is going to almost every war the backwash of a war has been settled by huge political upheavals. World War I saw the end of many European monarchies and a trans-transition to some sort of constitutional monarchy or quasi-democracy. The Ottoman Empire was broken up and divided and made into colonies of Britain, France,”
The US attempt to break Chinese tech dominance proved infeasible, and Russia and Iran are unwilling to surrender, making the likelihood of US success in its current strategy doubtful despite the logic.
“Because, you know, the US wanted to break Chinese tech dominance. It proved that that wasn't really feasible. They also see that the Russia is well willing to go all the way. Essentially, Iran isn't being defeated, they're not giving up. They see what the Americans are doing. The Iranians, as you said, are willing to destroy data centers of the United States in the Middle East. They're willing to knock out I think they took out the diesel desalination plant in Kuwait, which means they can actually make this country cease exist cease their existence.”
The United States lost its industrial power and creditor status during the 1970s-2025 period and has become a debtor country, requiring a new strategy to maintain dominance since it can no longer compete on manufacturing or lending.
“the United States uh had in the interim since the 1970s has lost its industrial power, it's lost its creditor power of uh turning into a a debtor country. Uh it needed a new strategy.”
Germany's AfD party has grown from nothing to the most popular party by opposing current European alignment with the US and advocating for energy diversification, peace with Russia, tech diversification with China, and transportation corridor diversification.
“The good example is Germany with AfD, you know, growing out of nothing to becoming the most popular party. Well, what are they saying? They're saying we should act in our interest. And what is that? Well, have to diversify energy supplies, have to make peace with Russia. Uh and, you know, other interests would be the in diversify technology, work with China as well, diversify transportation corridors, uh diversify finance.”
Trump outlined a deliberate plan in his first administration (2018) to use US military power to enforce dollarization and control of US financial markets as the primary mechanism to sustain US balance-of-payments dominance, replacing the gold standard system that collapsed in 1971.
“Trump himself was outlining the plan already in his first administration way back in 2018. He said that the number one aim was set up he saw that America's military spending abroad and attempt to enforce a US-centered world order, dollarization, US financial markets had been since 1950 the main balance of payments drain on the United States and it was foreign military spending that forced the United States off gold in 1971.”
Wars on Iran, Venezuela, and Russia have explicit economic functions—to strengthen the US dollar and ensure oil revenues are recycled through the US financial system rather than used for autonomous development by these countries.
“the interview with Scott Bennett where he makes the point that uh the wars on Iran, Venezuela, even Russia, they all have an economic function to strengthen the US dollar.”
The US-centric model of globalization organized around US financial markets, the US dollar, and US-controlled transportation corridors has exhausted itself after decades of integration and massive unsustainable debt accumulation.
“After decades of globalization, that is the integration of markets and uh also build-up of huge unsustainable debt, we now see that this uh US-centric format for globalization, that is integrating the world around organized around the United States, this model has seemingly exhausted itself. That is organized around US financial markets, the US dollar, US-controlled transportation corridors. All of this is now being dismantled by economic warfare and even war.”
Even if all warfare ends now, there will still be a food crisis this coming autumn (2025), indicating that the supply shocks are already locking in consequences regardless of political settlement.
“Even if all this war has ended now, it's hard to see it not being a food crisis this autumn, so.”
China's Belt and Road Initiative is designed to integrate the Eurasian continent so that Asia does not need to control the Rimland (Mackinder strategy) because internal connectivity eliminates dependence on external maritime routes.
“that's what of course what China has been trying to do through its Belt and Road Initiative is essentially integrate Eurasia, the whole Asian continent within so that it doesn't need to have the Mackinder strategy of controlling the periphery.”
The fundamental question determining success or failure of US neo-imperial strategy is whether the US can prevent the rest of the world from acting in its own economic self-interest and developing independently, or whether countries will pursue autonomous development and abandon subservience.
“What can the United States stop the rest of the world from acting in its own economic self-interest to promote its own development instead of being subservient to promote the US economy which will not use this income for its own development, but really just to increase its monopoly, control, and military threat to other countries. That's really the question.”
The second monopoly the US seeks to control is information technology and computerization, with Saudi Arabia, UAE, and Bahrain investing billions in US tech stocks and AI data centers, but these stocks are declining because these companies cannot build the required infrastructure in the US due to insufficient electricity and water resources.
“the US wants to control a monopoly in information technology and it associated computerization and the internet. And this is why what has been a stabilizing the US balance of payments has been a huge private foreign investment and government investment including the United Arab Republics, the UAE and Saudi Arabia and Bahrain into the US golden sovereign stocks of information technology, computer chips and Amazon and Google...Well, the problem is now that the these stocks are going down because analysts have found out well, in order for these companies to make this vast increase in earnings in monopoly rents that they've expected as a result of building huge information technology centers, we can't do that in the United States because we don't have the electricity. And uh we And we don't have the water to cool the electricity uh the chips”
Iran focused its bombing on Amazon's information technology investment in Bahrain as part of a strategy to sever the economic and financial symbiosis between the US and Arab OPEC monarchies, preventing these countries' oil revenues from being invested in US AI infrastructure and preventing their hearts from 'following the money' into American partnerships.
“A few days ago, Iran focused its bombing on Amazon's investment in information technology in Bahrain. Uh Iran's position is, 'Well, what's our strategy? Number one, we want to drive the United States out of the whole West Asian region...But Iran then says, well, in driving if we're going to drive the United States out of the West Asia, it can't just be the military bases. We have to end the whole economic and financial symbiosis between the United States and these these local monarchies there. And the under this symbiosis of investing their oil export proceeds in American stocks and bonds and partnerships with American AI industry, their hearts are going to follow where the money is. We've got to prevent this economic symbiosis so there's there's not going to be any linkage at all between the US economy and these economies so that we can then essentially free the region away from the United States.'”
Trump proposed imposing tolls on the Strait of Hormuz under the guise of charging OPEC countries for US military protection, claiming the US would extract 20% of the value of oil exports as toll revenue, representing an explicit violation of international law of the sea that prohibits tolls on international waters except for grandfathered cases.
“Trump finally has found a way to charge uh, the OPEC countries for the costs of the military uh, he calls it defense or guardian angel of defending these countries from Iran and any other attacker. And he said, well, there will be he said a few days ago, there are going to be tolls in the Strait of Hormuz. Forget international law about no tolls being allowed to be imposed on international waters. There are going to be tolls. We will get them, not Iran.”
The US violated the Iran nuclear deal memorandum of understanding by never intending to actually fulfill it; specifically, the US instructed the UAE to refuse to return $12 billion in frozen Iranian assets that was supposed to be the token first payment to signal good faith.
“the whole agreement was to be put in motion by this payment of at least a token sum of $12 billion of the hundreds of billions of dollars that of Iranian savings that the United States has told its allies, especially in the Emirates and the Arab OPEC countries uh to confiscate. Well, Hegseth said, well, he's worked with the Emirates to say don't give them a penny. And so the Emirates and Bahrain and other countries have said we're not going we're not going to give return any of this 12 billion much less 100 billion to Iran.”
Iran argues that under the Law of the Sea, a state in war can defend itself by controlling waters used to launch attacks against it; since Oman hosts US military bases from which missiles and bombs are sent into Iranian territory, Iran has the legal right to control the Strait of Hormuz.
“this Law of the Sea doesn't saying you can't charge tolls does not preclude us and other countries from defending ourselves in a state of war. Oman is in a state of war with us because Oman is hosting US military bases from which missiles and bombs are being sent into our territory. So, of course, we have control over the Strait.”
The stock market being up is not an indicator of economic health when the underlying economy is weak; the S&P 500 has been driven up mainly on debt and financial manipulation rather than productive capacity growth.
“many things can go wrong here...yes, the stock markets are up and if that was the only indicator for economic health, wonderful America would be back, but uh you know, many things can go wrong here.”
China's tech development should be 'scaled back' to restore US tech dominance, indicating that US strategy includes preventing rivals from achieving technological parity.
“we see that China should be cut off from a key supplier of oil. Uh it should also, of course, be its tech development should be scaled back to restore US tech dominance.”
The US opposes renewable energy (wind and solar) where China dominates technological leadership, preferring to maintain the world's dependence on fossil fuels because US hegemony depends on controlling oil monopoly rents and liquefied natural gas exports.
“This is why Trump has fought against alternatives to oil in the form of wind energy and solar energy, which China has dominated in. So, that's the the link between transport. And now for your question, how can this succeed? Well, it can only exceed by Let's start with the America fight against Europe to subordinate its allies, Europe and Japan, to the United States.”
After the current war, there may be a historical moment for progressive political transformation in the Middle East—either the Sykes-Picot redrawn borders are finally dismantled and replaced with modern representative governments, or the region follows Japan, Britain, and Germany into permanent satellite status.
“is there going to be a similar political revolution in going throughout West Asia in establishing economies that actually use their oil not as to recycle their economic surpluses to the United States leader, not to fall into the position that countries like Germany or Britain are in. It's just being satellites of the United States and certainly not Japan that America's trying to get rearmed to serve the United States. Are they going to go down the same road as Japan, Britain, and Germany? Or are they somehow is there going to be a social revolution there like America feared it would be the case after World War II? Are we finally going to see the the carve-up that occurred after World War I with the Sykes plan to redraw the lines and put in British and French installed local monarchies? Are we finally going to see them brought into the modern progressive era?”
The US strategy of global hegemony makes 'perfect sense' if 'global hegemony is the key objective' and morality is disregarded, but the openness with which US officials state these goals is 'quite interesting.'
“I I I see what they're going for, and it's a you know, if we throw all the morals out window, and uh global hegemony is the the key objective, all of this makes perfect sense. The fact that they're saying it out loud, as well, is quite interesting.”
Russia is now realizing that the conflict is not actually with Ukraine but with NATO itself, and is recognizing that Western countries like Germany, France, and Britain are acting as US satellites by providing weapons and missile guidance systems to hit Russian targets.
“At some point Russia is at now realizing this is not it's not fighting against Ukraine. Ukraine is the arena for this fighting. The fight is with NATO and Ukraine just doesn't matter. The Russian troops can do are moving westward in Ukraine...How but This This doesn't prevent the NATO countries from just sending missiles from Ukraine into Russia. So, and the the enemy isn't really Ukraine any longer. It's It's Germany, France, and Britain that are acting as US satellites in attacking Russia with and letting the United States plans. I think it's in Wiesbaden and other cities where they are guiding the missiles that are hitting the Iranian You have to say the Ukrainian missiles that are hitting Russia.”
After Rubio's objection, Trump backpedaled and announced a new arrangement where OPEC Arab countries would invest in US infrastructure and AI centers domestically rather than pay tolls directly, serving the same function of extracting and recycling oil export revenues into US control.
“Trump then backpedaled. And the next day, a few days ago, gave a press conference saying, 'All right, we're going to We've made a new agreement with the OPEC Arab countries. They are going to pay us for the cost of our defending them as their guardian angel, but not through tolls. They're going to invest in the United States just as way back after 1975, Saudi Arabia and the OPEC countries invested their oil export earnings here. They're going to invest in US industry as partners.'”
The US has lifted sanctions on exporting advanced computer chips to the UAE specifically to incentivize Emirati investment in US AI infrastructure and data centers, effectively selling military technology to achieve financial partnership.
“just yesterday the United States has lifted sanctions on exporting the most advanced computer chips to the the Emirates and it's done that so that the Emirates can invest with the United States. This is tens of billions of dollars to create these new computer chip transfer centers like the cloud Amazon cloud investment in Bahrain was supposed to have done.”
Russian negotiations with China over the Power of Siberia pipeline price have stalled because Russia recognizes that oil prices will spike due to US-induced Middle East conflict and supply destruction, but China refuses to pay the higher prices Russia is now justified in demanding.
“Russia quite correctly says, 'Well, we can see that the price of oil is going to go up because it looks now like the United States is goading Iran and the Arab OPEC countries to destroy each other's oil production. Well, the NATO is fighting against Russia to destroy its oil export capacity. And without OPEC oil, there's going to be a huge oil shortage, and the United States will supply this basically through shipping gas to country countries that need this energy.”
The strategic advisor's assessment is that if tasked with restoring US geo-economic dominance, the current strategy of weakening rivals, controlling transportation and energy, monetizing protection, and isolating competitors is rational and effective—suggesting the strategy reflects deliberate planning, not incompetence.
“Well, I'm thinking if, you know, if I was uh in Washington advising Trump how to restore US geo-economic dominance, I would uh I would probably advise what they're doing now to a large extent. That is, you know, for the US to revive its technological dominance, for it to control international transportation corridors, that is the maritime uh corridors and restore uh yeah, third to restore America's financial dominance with this currency. You know, you want to keep uh rivals of the United States weakened. You want to keep the rivals divided, prevent them from integrating, and also uh keep the vassals dependent.”
The 2026 year will be a 'world historical year' when all the dynamics discussed (oil supply disruptions, fertilizer shortages, monetary system breakdown, transportation control, political regime collapse) come together to create a systemic crisis.
“This This is This year, 2026 is going to be a world historical year for the showdown when the dynamics that we've been discussing all come together.”
The US destroyed 20% of Qatar's global helium production capacity (valued at $5 billion to install and took years to build) when Iran bombed Qatar's helium facilities, causing a helium shortage that will last years and giving the US and China a monopoly that they are using as leverage for international control.
“the one of the first production sites that Iran hit was in Qatar's helium production that was itself 20% of the world's helium trade, totally destroyed. That it cost I think $5 billion to install originally and took a number of years to install. All of this is unavailable for the next few years causing a helium shortage. China and the United States are major producers of helium. China has stopped its helium exports and the United States now is using its helium monopoly as a lever of international control.”
Lindsey Graham stated that Iran is oil-rich and this oil wealth will fall under US control after the war, indicating that US political leaders openly state the acquisitive intent.
“Uh Iran uh as uh Lindsey Graham made the point that yes, Iran is oil-rich, and this will now fall under US control when it's over.”