GHINWA PISSAROCI/Strategic Analyst
INTRODUCTION:
The ongoing tariff war which looks like a global economic recalibration by United States is actually a strategic realignment. This is going to create a much needed strategic reset in the long run. The new world order is long getting stagnated due to lack of meaningful reforms and institutional revitalization. The delay cannot be withheld any more. The Global South is demanding its due which has been neglected for far too long. The clash between emerging powers and existing powers is all set to create a calculated instability both in economic terms and also on strategic front.
ANALYSIS:
The tariff war is just a beginning, there are more surprises in store. The economic uncertainty and related micro economic meltdown will multiply creating widespread sudden collapse, while disrupting present economic and strategic order.
However, it is estimated that as many as 43 nations around the globe will go bankrupt and 28 nations will face decline beyond repair foe decades. Nearly 22 countries will lose their sovereignty due to strategic readjustment in coming years in which major powers will change borders and secure their own interests.
In fact, more pain is awaiting for the entire globe as the existing powers are unwilling to accept the new realities and there is a growing impatience among the emerging powers who want their share of prosperity. Indeed, tariff war has just followed the remnants of earlier sanction war.
For a while both will coexist depending which weapon is best fitted for addressing a particular situation. A global tariff war, especially between the US, China and EU, risks fracturing the post-WWII liberal international order and accelerating the decline of multilateralism.
This evolving tariff war holds heavy consequences for global trade flows, supply chains, and household costs. While bilateral deals offer potential relief, the economic toll and political tensions remain difficult to unravel.
Tariff impositions lead to increased costs of imports and exports, triggering contraction in trade volumes. According to WTO estimates, a full-scale tariff war could reduce global trade by up to 12% over a five-year period.
The tariff war is both a symptom and driver of US-China strategic decoupling. Both powers may weaponize trade further – through technology restrictions, financial sanctions, and resource control – intensifying global polarization.
The WTO and similar institutions risk becoming obsolete or irrelevant. Countries may increasingly bypass multilateral frameworks in favor of bilateral and regional arrangements, undermining global governance norms.
Tariff wars will encourage countries to form regional economic and political alliances (such as ASEAN+3, BRICS expansion, EU-Africa trade corridors). This shift may lead to competing trade blocs with divergent regulatory standards.
Leaders may use protectionist policies to appeal to domestic audiences, particularly in populist political climates. This shift risks undermining liberal democratic norms and increasing isolationist tendencies. As job losses mount in tariff-impacted sectors (manufacturing, agriculture, logistics), and prices rise, nations may see increased protests and political instability, especially in fragile democracies.
A sustained global tariff war would be a structural disruptor of the international system. It threatens economic prosperity, accelerates geopolitical fragmentation and challenges the liberal rules-based order. Strategic foresight, regional cooperation and multilateral engagement are vital to managing this systemic risk but the attitude of current US administration looks very unhelpful.
The re-escalation of tariff wars among major global economies represents a critical juncture for the international system. The far-reaching consequences of a prolonged and broad-based tariff war on global economic architecture, strategic alignments, and geopolitical stability could create a gloomy prospect.