World (trade) War III has begun*.

The White House
I, Daniel Schwen, CC BY-SA 3.0 <http://creativecommons.org/licenses/by-sa/3.0/>
 via Wikimedia Commons



The United States under the current administration, has started to leverage its position in the global order by means of weaponizing its economic dominance. This has come at quite a tumultuous time for the global order, and global economic politics. The US has declared that it will impose a tariff of 25% on goods from Canada and Mexico, with China facing an additional 10% tariff over and above the existing rate1. This reflects the US' increasing desire to distance itself from the global economic order, or rather its role in the global economic order of propping up its allies.


This move signifies arguably the most significant economic policy shift since World War II, when the US started to dole out money to stop the spread of communism into Europe under the Marshall Plan. The new America is a nation that is looking to create an own "walled garden" of sorts within its own borders, while completely distancing itself from the neo-globalised world trade and commercial order, much to the detriment of small countries and economies around the globe.


Today's America believes in the idea, that globalisation is the root of most of its evil (inflation, loss of jobs, etc.) and is waging an all out war against its own economic order, by weaponising its domestic market's high GDP per capita, and thus considerably higher levels of disposable income. Any superpower with as much influence and clout in the world order, would arguably be right to do this to protect its own interests. But the extent to which America is taking it is the question in economists' minds, that is keeping the global economy on edge.


It would be considered reasonably safe to say that we have currently entered an era of de-globalisation, post the era of hyper-globalisation, where national economic sovereignty will play an enhanced role, and multilateral trade blocs and organisations such as the European Union, MERCOSUR, etc., may increasingly be called into question, and small nations in Europe such as the ones in the Balkans and Baltics will feel the brunt of the burden, as they arguably do not have the economic resilience to stand on their own feet without EU or American patronage.


Today's economic realities increasingly seem to dictate that only diversified, market and domestic production/consumption based economies, like Brazil, Russia, China, India and a few select countries can survive this economic "nuclear winter" of sorts, where "bombs" will be exchanged, and tit-for-tat "war-like" economic measures may not be too far-fetched.


SOURCES CITED:

  1. IMPOSING DUTIES TO ADDRESS THE FLOW OF ILLICIT DRUGS ACROSS OUR NORTHERN BORDER (Executive Order dated February 1, 2025)










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