Hormuz closure unsettles American dominance

The US has been begging and pleading with Iran to open the Strait of Hormuz to nations attacking them. As the Canary noted, the strait is open to nations who are not bombing Iran. Evidently, the US is finally facing robust opposition to its previously unchecked hegemony.

Traditionally, the imperialist settler state of the USA have been able to dominate proceedings via two avenues:

• domination of aerospace which allows it to issue threats to smaller nations
• its ability to ransack global south resources and economies via bombs, sanctions, IMF/World Bank loans, and funding counterinsurgencies.

Iran’s refusal to capitulate to the US’ demands to open the Strait of Hormuz doesn’t mean that the world’s biggest military power has become powerless. However, it does mean that the gap between America’s geopolitical ambitions and its capabilities is widening.

Herein lies the opportunity for global south countries to widen this gap even further so they are never threatened with being turned into rubble again. And, the US’ domination of the globe is facing robust opposition from not just Iran, but also China.

Hormuz to China’s ascendency

The U.S. is well aware of its loss of productive capacity to China, especially on critical minerals.

At a recent Senate committee hearing, officials testified that the entire US military apparatus, from fifth-generation aircraft and precision-guided munitions to satellite constellations and naval vessels, depends on a reliable supply of rare earth elements (REE) and minerals, including gallium, antimony, germanium, and others.

Chinese hegemony of these REE and minerals is a “clear and present” danger, officials said. The Senate heard:

“Today, our primary strategic competitor, China, controls the global supply chain for numerous critical minerals. On heavy rare earths alone, China controls 95 percent of global output, with the United States importing almost 100 percent of what we use, 90 percent of that coming from China. This control provides Beijing with the ability to weaponize these supply chains, threatening to disrupt our Defense Industrial Base and compromise military readiness in a crisis.”

The beauty is that instead of taking ownership of the rabid post-1970s neoliberal era, which led to the hollowing out of the industry in the West, they blame China for “malign adversarial efforts to manipulate markets” and its efforts to “undermine” the US’s domestic market.

Accountability is not their competitive advantage, one can say!

USA’s inability to diagnose or treat internal contradictions

This is part of capitalism’s hubris. A part of the solution, according to them, lies in leveraging their “private capital markets, one of our few remaining comparative advantages against Beijing.”

In fact, as Costas Lapavitsas, Professor of Economics, SOAS University of London, explains, it was US multinationals that:

exported productive capital, established global production chains, outsourced labour-intensive processes upstream, and financialized their own operations through share buybacks rather than domestic investment.

He says that the hollowing out of the US industrial base was carried out largely by the very corporations Trump and his predecessor Biden are most aggressively defending.

Critical minerals through economic coercion

Another way US hubris gets in the way is the belief that countries are breaking Chinese ties.

The Senate heard that countries are:

poised to ditch the predatory debt trap diplomacy Beijing has foisted upon them in this area.

Not only is this self-aggrandizing claim wrong, but the opposite is true. Trump, in fact, boasts about the use of economic sanctions and coercion.

The list is endless of economic coercion being used by the USA for access to minerals. Just recently, Trump threatened to withhold HIV medication from Zambia to coerce access to minerals; his so-called peace deal between Congo and Rwanda is a guise for American corporations to “make a lot of money,” and then he is coercing Venezuela for access to its oil and critical minerals by the illegal kidnapping of President Maduro.

Or that in Indonesia, Trump used the threat of tariffs to sign the Agreement on Reciprocal Trade (ART) with Indonesia, which gives US investors the same access as domestic firms across the entire critical minerals value chain.

That the US’s World Bank sits on the Gaza Board of ‘Peace’ says everything about America’s economic and debt policy for the global south.

Meanwhile, between 2000 and 2019, China cancelled at least US$3.4 billion of debt in Africa, according to a study by Johns Hopkins University.

China holds important levers

In April and October 2025, China imposed export controls on heavy rare earths, expanded them to include any product containing Chinese-sourced materials or technology, and added five more elements to the restricted list. Worth noting, these restrictions were retaliatory – the US first imposed export restrictions on 140 Chinese semiconductor firms.

Trump and Xi were supposed to meet in China in March-April, and now he has postponed the meeting to May. White House has cited the war on Iran as the reason.

Economist Michael Hudson explained that Trump believed that the US could conquer Iran in two to four weeks.

He intended to use regime change in Iran as leverage to confront China, threatening to cut off its oil supply unless China agreed to export key raw materials such as gallium and tungsten, which the US military needed. Well – that didn’t work out!

Hormuz exposes dependency

U.S. Trade Representative Jamieson Greer was recently asked if the U.S. would need an extension on rare earth access by October. He said, “We’ll assess that down the road.” He admitted the process with China was working “fairly well” but noted, “a few things here and there where we didn’t feel like we were getting rare earths in a timely fashion.” Chinese counterparts, he said, “took note of that and have it under consideration.”

China – they can’t bomb countries into rubble without your magnets needed for jet engines – keep that in mind!

The USA’s handicaps on minerals should not be underestimated. Even at the height of the US-backed Ukraine and Russia’s war – US kept importing uranium from Russia. Yes, American exceptionalism is really something. Europe couldn’t buy Russian LNG, but the USA could buy Russian Uranium.

Worth adding that these were the two countries – China and Russia –  that recently vetoed the US-backed Bahraini proposal to authorize defensive military action for securing commercial shipping in the Strait of Hormuz.

Brand America, dollar hegemony injured

China beat the United States in global approval ratings in 2025, with a median of 36% approving of China’s leadership, compared with 31% for the U.S., according to the latest Gallup polling.

Even the pro-American Economist published a cover of Chinese President Xi overshadowing Trump that read – “Never interrupt your enemy when he is making a mistake.”

Deutsche Bank has warned in a new report that the rise of the petroyuan poses a clear challenge to the U.S. currency. The petrodollar system, built on a 1974 agreement between the U.S. and Saudi Arabia, faces a “perfect storm” from the ongoing war on Iran initiated by the US/UK/Israel, the bank said.

Reduced global oil trade would also create more room for the pricing of goods and services to shift away from the dollar, the report said. Both petro (i.e., oil) and one of the US’s main exports, as well as the US dollar, the US’s currency, would be impacted adversely. Hormuz is evidently a central strategic point.

Bombing countries into rubble is still a viable threat

The US military budget is roughly $1 trillion annually. That is more than the next ten countries combined, including China, Russia, and every European power. The US operates 800-plus military bases worldwide.

American exceptionalism will be here for the near future despite losing industrial productive capacity to China. As Lapavitsas noted, the Federal Reserve’s balance sheet functions as “the ultimate collateral backstop for global markets.” The dollar remains the world’s currency; nearly 60 percent of global reserves and roughly half of all cross-border payments are settled in dollars.

Despite losing productive capacity, US banks and multinationals still dominate global finance and corporate control. As Lapavitsas notes, three large investment funds—BlackRock, Vanguard, and State Street control roughly 25 percent of all US corporate equity. These same firms are the largest shareholders in European, Japanese, and emerging market corporations.

Growth at any cost

This was the reason Starmer was proud of his photo op with BlackRock’s Larry Fink.

Owning the elites like Starmer and NATO’s Mark Rutte across the globe is another card up the US’s sleeve. They have Modi, who is mentioned in the Epstein files, as well as his best friend Adani, facing an SEC indictment, giving the US blackmail leverage over India’s prime minister.

They have Pakistan’s elite on Trump’s Board of Peace and its crypto traders chasing the Americans cryto industry.

However, popular support in both India and Pakistan against Trump – another contradiction – is not in favor of the USA. Not dissimilar to what the popular masses want in the UK or other NATO countries like Italy.

Are the stacks in favor of the global majority? Or the elites with Trump as the head of the snake? The gap between American ambitions and its capabilities is certainly widening. As Iran’s closure of Hormuz shows, here lies the opportunity for global south countries to widen this gap even further – and not get bombed or sanctioned back to the Stone Age.

Featured image via the Canary