Tariffs, Trade wars & global turbulence: Emerging New World (dis)Order revisited
Dr Kingsley Makhubela & Dr Petrus de Kock
While the world is scrambling to keep up with tariff war actions undertaken by the Trump administration, there is a temptation to obsess only about current events, forgetting the substantive turbulence that has engulfed the world system since 2022, a mere three years ago. That historical frame can be stretched, perhaps, with a few more years to 2020, to include the destructive impact the Covid-19 pan(dem)ic had on nations, supply chains, and the global economy.
Nevertheless, towards the end of 2022, a few months after the onset of the Russian special military operation (SMO) in Ukraine, we released our book entitled – Emerging New World (dis)Order: local & global risks of systemic disintegration, state failure, and state collapse.
The book incorporated key geopolitical, geo-strategic, and global economic dynamics that unfolded in the wake of the Russian SMO. A moment, we argued, that will go down in history as the day post-Cold War era globalisation, and its attendant supporting world order, died. Or, had alternatively at least sustained a lethal blow to the head.
Even Larry Fink, President of BlackRock announced, in his annual 2022 letter to investors, that globalisation as it has been unfolding since the end of the Cold War, is no more, and that the global economic- and trading system will be permanently altered as a result.
We furthermore contended, at the time, that the post Cold War world order is witnessing a moment of bifurcation. However, if there is a need to update our original theses, then we can at this stage add the word, fragmentation, as prime descriptor of dynamics unfolding in the global system. These changes have created more than just a Cold War 2.0.
The grand chess game of major power confrontation, via proxy site – Ukraine, plunged the world into a phase of fragmentation, geopolitical, military-strategic, and geo-economic reorganisation. It has additionally allowed the 20th century evil genie of nuclear war, or, direct major power military confrontations and misadventures, to escape from the bunker where the doctrine of Mutually Assured Destruction (MAD) has been hiding, since just about 1990. Thus leaving analysts scrambling around for ‘sense’ in the geopolitical insane asylum exploding around human heads all over the planet.
Since 2022, and the unleashing of economic war actions on the Russian Federation, numerous nations have embraced, and accelerated processes of de-dollarisation of trade, and the establishment of alternatives to the US dollar, and banking system dominated, SWIFT. Importantly, this additionally challenges the US dollar as global trade- and reserve currency.
Interestingly enough, even before being inaugurated as president, Trump had warned nations that move away from the US dollar, as dominant global fiat currency instrument, that if they continue on such a path, he will impose 100% tariffs on them in response. MAGA therefore means, first and foremost – maintenance of the the US dollar’s dominance, and by implication American dominance in the heartbeat of the global economy.
We argued in Emerging New World (dis)Order that dynamics unfolding both on the kinetic battlefields of proxy war site Ukraine, as well as in the economic warfare domains (as directed at Russia), are delivering an ever more integrated Eurasia.
This is a region of the planet that encompasses a population of 3.5 billion people, significant resources, and potential, together with Asia, of dominating the global economy. Eurasia incorporates countries such as China, India, Iran, Russia, and multilateral platforms through which close strategic cooperation is fostered.
The Shanghai Cooperation Organisation, the Eurasian Economic Union, and an expanded BRICS, are but three of the multilateral platforms that complement strategic bilateral relations across the region, that have tremendous influence on making an ever more integrated, and coherent Eurasia, a reality. This broad regional grouping, we contended then (in 2022) when Emerging New World (dis)Order was published, has been turning its back on a unipolar western dominated system.
But, back to Trump 2.0, for a moment. While some might want to see major differences between him (Trump), and his predecessors, of which there are many, but, a strand of continuity pertains to a truism held by US foreign policy establishments since the 1950’s and 60’s.
The latter is a geo-strategic view of the world wherein China and Russia, should ideally not be allowed to foster close, comfortable, and god forbid, strategic and especially no military ties. The same goes for Trump, because, when reading between the many lines of postmodern power play speech he utters, the USA today would still prefer a comfortable distance between these two nations. On the one hand he tries to de-conflict hot war with Russia (via proxy site Ukraine), while ratcheting up- to the n’th degree, Trade war actions, on #China.
Yet, the opposite of the 20th century Cold War hangover in the current world, called the neocon dream, has come true. In the mid 20’s of the 21st century, we see China and Russia, as anchor nations of Eurasia, today, closer than they have ever been in history. At all levels, encompassing domains of trade, culture, infrastructure (both physical and digital), political relations, and strategic coordination of positions- and actions in regional- and global political-security theatres (and institutions).
Once again, while the Trump tariffs are terrorising world markets, and blowing like a wind of incoherent panic through corporate boardrooms, and politicians’ empty heads the world over, these dynamics further entrench one of the conclusions we had reached in 2022.
This being that there is not a New World Order emerging from some conspiratorial deep state swamp, but, a New World (dis)Order. A world disorder that, in its latest trade war manifestation, will unleash not only market volatility and uncertainty, but, most likely recessionary conditions that is but one economic or military-security shock removed from a global depression.
What does this mean for South Africa, and Africa, we ask?
Before entertaining the above question, while the world is obsessed with Ukraine, the Middle East is in the throes of biblically inspired genocidal conflicts. Gaza, Lebanon, and Syria provide a frame not only for the Israeli and US war machine’s actions in the region, but, Yemen’s Houthis, a non-state actor, has been deploying sophisticated long-range weaponry to cripple global shipping while challenging the might of the world’s mightiest navies (like the US Navy), to show them incapable of ensuring safe passage through one of the world’s most important shipping choke points (the Red Sea & Suez Canal).
In the above developments we observe how fragmentation, conflict, and confrontation are the dominant forces shaping behaviour, narratives, and world views. And, additionally, also hammer additional nails in the coffin of globalisation.
But, back to Africa.
While attention is focused on some of the above hot conflict zones of the planet, the African environment has also seen its fair share of geopolitical upheavals that has gone mostly unnoticed. The latter is not for any lack of significance, but illustrative of how even Africans are ignorant of the extent to which the high seas of, and sea changes in a turbulent world system, has been manifesting in our proverbial back yard.
In West Africa, for several years already, a major upheaval has been afoot. By now Niger, Mali Burkina Faso, Chad, and Central African Republic have removed French military forces from their territories. Beyond that, economic actions have been taken against French multinational miners, and related companies active in some of these countries. Further afield, Senegal, as well as Cote d’Ivoire have also been questioning not only French military presence in these countries, but their participation in the post-colonial financial system still dominated by the French government and central bank.
These geopolitical upheavals in Africa also show the emergence of Russia as influential military, economic, and political partner to African nations that are now, decades since the first wave of decolonisation, shaking some of the remnants of the French colonial order that have been hanging onto African soil for its own nefarious purposes.
In a period of uncertainty the question is – how do nations, corporations, and individuals (re)position themselves, contend with new and very significant risks, while opening new opportunities for trade- and economic interaction?
The answer to this question might be surprising, and requires one to shed very many preconceived ideas about a waning western ‘rules based world order’. Additionally it calls for a fundamentally revised understanding of what Eurasia is, and how strategic regional interactions, can shape another pattern of re-globalisation, in a multipolar global order.