Glossary
Plain-language definitions for terms you'll encounter in geopolitics and international economics.
Decoupling vs derisking
Two different policy framings for the same underlying problem: how to reduce strategic exposure to China without breaking the trade relationship that funds much of European industry. 'Decoupling' implies a broad commercial separation — fewer supply-chain ties, less investment in either direction, parallel technology stacks. 'Derisking' implies selective diversification in narrowly defined critical sectors (semiconductors, critical minerals, batteries, pharmaceutical inputs) while keeping the wider trade relationship intact. The European Commission, under Ursula von der Leyen, formally adopted 'derisking' in March 2023; Mark Leonard at the European Council on Foreign Relations and Sander Tordoir at the Centre for European Reform have written the clearest analyses of the gap between the EU and US positions. Washington tends to use 'derisking' rhetorically while pursuing policies — chip controls, FDI screening, outbound-investment restrictions — that look closer to decoupling in the technology perimeter. The distinction matters because the two framings imply very different industrial policy commitments and very different diplomatic costs. See the decoupling-vs-derisking and EU anti-coercion-instrument analyses on this site for the working definitions actually in use.
Dollar liquidity (as power)
In a financial crisis, banks and firms outside the United States still need dollars — to settle trade, to refinance dollar debt, to meet collateral calls. Only the Federal Reserve can create dollars without limit. Whoever controls access to that liquidity in a crisis exercises a form of power most observers miss until it is being used. Adam Tooze develops this reading at length in *Crashed* (2018), arguing that the Fed's 2008 and 2020 dollar swap lines to selected foreign central banks were the decisive interventions that kept the global financial system from fragmenting — and that the choice of which central banks got swap lines (the ECB, BoE, BoJ, SNB, and a small expanded group) and which did not was a strategic act, not a technical one. The swap-line geography maps closely onto the US security alliance system. The same liquidity architecture explains why extraterritorial sanctions bite: banks that lose dollar correspondent access cannot fund their books in a crunch. The sanctions analyses on this site treat this liquidity dimension as the binding constraint, not the SWIFT messaging layer.