Part 6 of a series entitled Global Ideology and Human Value by Sunny Lee, Founder and President at CGPS (Center for Global Peace and Security), and Director at IKUPD (Institute for Korea-U.S. Political Development), Washington DC.
The defining characteristic of international politics is the national interest of individual states. Concurrently, economic drivers have propelled globalization into a dominant global phenomenon since capital liberalization became a core state strategy in the late 20th century. Today, however, trade protectionism, nationalism, and domestic priorities are merging to create a powerful counter-momentum, increasingly displacing the free markets and cross-border capital flows that once defined the global economy.
Over 30 years, neoliberalism based on global supply chain has been the mainstream of international economics but it drastically faces a dilemma and perplex shaking the continuance in a short time. Instead of such a global scale of turmoil, a new economic trend based on nationalism totally changes the overall range from lifestyle, consumer choice, and investment strategy to prospective adventure for better human life. Especially, Covid-19 collapsed the triple system of production, manufacture and supply chain as the symbol of globalization so that every country strives to survive for itself.
The United States has strengthened trade policy with a slogan ‘Made in USA under MAGA’ which strongly impacts the global manufacturing system. Such an aggressive trade protection policy disintegrates the fundamental structure of the global supply chain. According to the OECD, the effective rate of protection(ERP) in the U.S. was 19.5% in 2025, reporting the highest level since the great depression in 1933. As well, European countries limit foreign capital to take over their strategic industries, screening foreign investments to safeguard national security and strategic autonomy. These measures are particularly focused on preventing state-backed entities from gaining control over critical sectors such as technology, energy, and defense.
Ironically, these symptoms reinforce the monopoly system in the national stage with chauvinistic power beyond multinational corporations in neoliberalism. For example, overcoming excessive tariffs and trade barriers, China has been eager to export its global factory system including manufacturing facilities, brands, core technologies, and even industrial standards. China’s massive projects frighten major countries in the EU such as France and Germany which strengthen trade protection policy and block China’s overcapacity to damage their domestic productivity and economy. In addition, overwhelming production in three industries of electric car, battery and solar energy as the government’s main strategy results in excessive supply in global markets and aggravates instability of the world economy.
The era of globalization is rapidly reorganizing the global map focused on economic interests, strategic connection, and optional cooperation by national priority. The insecure environment of supply chains such as Covid-19 and the Ukraine War has initiated national protection policy by demolishing foreign dependence structure. Furthermore, political agitation increases people’s dissatisfaction due to a lowered domestic economy and job opportunities deprived by foreign markets. At the top of reasons, strategic competition is a worldwide syndrome that AI, semiconductor, energy, and food supply become not just economic goods but strategic assets directly connected to national security.
Economic Prosperity in New Global Trend
The global society has been exposed to an unpredictable situation since protectionism abruptly emerged as major countries target economic prosperity with strategic nationalism caused by Trump’s tariff war. Currently, the U.S. and Israel’s military attacks against Iran induce a new global trend to reinforce nationalism. Iran terrifies the energy routes toward the world markets so that most countries get troubles with not only domestic economy but also trade relations. Stock markets have shown volatility by investors caring about the uncertainty surrounding the conflicts, while oil and gold prices incredibly jump up. Such drastic crises tighten nationalism and protectionism, agitating global supply chains.
Not only global energy order and trade structure but also economic growth confront critical dilemmas, impossible to get back before Middle East conflicts. The World Bank lowered the global growth rate to 2.5% in 2026 from 2.8% in 2025. The energy shock deteriorates global inflation through high costs across the economy. In developing economies, inflation is projected to rise to 5.2% in 2026 from 4.2% in 2025. As well, in developed economies, inflation is forecasted to increase to 2.9% from 2.6%, edging further central bank targets in most countries. U.S. stock markets rapidly drop down as the S&P 500 and the tech-heavy Nasdaq Composite have been hardly lifted by a rebound in beaten-down software stocks. Stocks across Europe and Asia have also fallen sharply, with the Stoxx Europe 600 index ending the trading day 1.7% lower, and Hong Kong’s Hang Seng Index tumbled more than 2%.
McKinsey & Company’ Economic Conditions Outlook in June 2026 diagnosed that the global economy is more downbeat than before with divided expectations. In particular, since energy prices loomed large, global companies have been making defense changes in response. The results of the latest McKinsey Global Survey show disruptions affecting maritime transit through Strait of Hormuz during a period of heightened economic and geopolitical instability.
Furthermore, rapid increase of energy prices emerges as the most critical risk to economic growth, causing inflation and supply chain disruptions, globally as well as in home countries. It reports overall geopolitical instability/conflicts 35%, energy prices 34% and inflation 26%. Europe shows 46%, 41% and 26% respectively much worse than North America. As a result, global companies are automatically making operational changes in response to trade policy shifts caused by the Strait of Hormuz challenges and become less aggressive than growth-oriented investment strategies.
Currently, global scale of geopolitical shifts signify a new cartography of competitiveness for structural reforms. Catalyzing competitiveness for using productive investment propels economic prosperity through a detailed strategy of effective investments. While Europe closes its $923 billion annual investment gap, the U.S. increases investment in manufacturing to reduce dependency on imports. Meanwhile, China adds three times as variable productive assets each year as Europe and the U.S. combined, yet capital returns are around 40 percent lower. As such, cost differentials, time to markets, and productivity levels are all influencing the new global trend. While rebalancing investment requires a boost in productivity and innovation, specialization in less cost-sensitive industries prefers practical policies.
Trade Protectionism and Monopoly System
Trade protectionism basically comes from major powers’ monopoly ventures to shake the international trade system with national priority. The global export momentum remained uneven in the first half year of 2026 with remarkable growth concentrated in the United States, China, and Mexico. In contrast, import demand diverged across major economies with strong growth in China, India, and Mexico. Meanwhile, global shipping activity would be mitigated due to weaker trade momentum as geopolitical disruptions have persisted.
Although global supply chain pressures reached the highest level since 2022, US-bound shipping rates from Shanghai rose modestly. US-to-China freight rates also remained well below the elevated levels seen in 2025. The U.S. exports reached $327.1 billion with up $8.3 billion in April more than in March, 2026 and imports hit $383.0 billion with up $7.6 billion. The monthly deficit decreased by 1.2% with $55.9 billion. In contrast, China’s exports reached $382 billion with imports at $275 billion, producing a trade surplus of roughly $105 billion.
First, the U.S.-China trade war has reflected strategic rivalry over technology and global leadership beyond economic interests. The U.S. overwhelmingly imposes tariffs on Chinese goods, triggering retaliation. Especially semiconductor export bans signify trade weaponization for geopolitical containment. The impact of tariffs has negatively reverberated through global supply chains, bolstering domestic industries as a countermeasure to tariffs.
Second, the EU pursues strategic autonomy by using trade defense instruments against unfair competition. For example, the Carbon Border Adjustment Mechanism(CBAM) acts both as climate policy and protectionism. The EU also seeks to reduce reliance on China for solar panels and promote sustainability in trade agreements to foster green technologies. While implementing tariffs to counteract dumping practices by non-EU countries, the EU enhances domestic production capabilities in strategic sectors.
Third, Russia weaponizes its energy exports by restricting supplies to Europe in response to sanctions. This clearly demonstrates how trade protectionism extends beyond standard goods to critical resources like oil and gas. Global dependency on Russian energy creates deep vulnerabilities, as these disruptions cause significant economic repercussions. Due to political negotiations tied to energy dependency, some EU countries are pursuing energy partnerships with non-traditional partners to mitigate these risks.
Currently, global trade is going through the most important transition in decades. Overall situation such as geopolitical tensions, supply chain disruptions, inflation shocks, and national security concerns pushes governments to place economic self-interests ahead of global efficiency. This shift has made trade protectionism, referring to government actions that restrict imports or prefer domestic industries through tariffs, subsidies, or regulatory barriers.
Because global trade shapes prices, employment, investment flows, and long-term growth, its effect ripples through supply chains, financial markets, and consumer behavior.
The COVID-19 pandemic proved how many countries were dependent on foreign suppliers for essential goods, including medical equipment and semiconductors. As well, geopolitical tensions such as the Ukraine War and the Iran War highlight how trade relations could be used as political leverage by reshaping policy priorities. Governments increasingly use tariffs, industrial subsidies, and local content requirements to protect strategic industries. For example, the U.S. and the EU have rapidly strengthened domestic manufacturing capability and reduced reliance on specific foreign suppliers.
According to the WTO, the number of trade-restrictive measures has risen sharply since 2018, signaling a long-term trend rather than a temporary phenomenon. Especially, current protectionism focuses on technology, energy, and national security sectors which deepens trade protectionism. They are all connected to national competitiveness that the monopoly system will no longer allow transnational cooperations beyond national interests. Under the government’ fulfilling strategy and support, the monopoly system will reorganize global markets and the core part of trade protectionism in advance. Monopolies can arise through various means such as patent control, government regulation, or market dominance in shaping the future landscape of global trade and commerce, leading to efficiencies and innovation.
First, high-tech companies such as Google, Amazon, and Facebook defeat challenges to keep up the dominant markets. Google’s omnipotent control over search engine and Amazon’s priority in online retail are considered as the exact case of current monopolies. These companies ironically announce that their capacity allows for better services and innovation, even though they squash competition and control vast amounts of data.
Second, the pharmaceutical industry often sees temporary monopolies due to patent protection. Although companies are allowed to recoup research and development costs, they purposely lead to high drug prices. Gilead Sciences’ pricing of Hepatitis C medication is a notable case, drawing public outrage over patent laws and healthcare rights.
Third, media conglomerates’ monopoly system severely damages democratic value and fairness. Large media companies can control a significant portion of what the public can see, hear, and read. For example, the Walt Disney Company’s acquisition of 21st Century Fox assets poaches media diversity and fair censorship by the ultra-media ownership.
Economic Nationalism with Chauvinistic Power
On February 8, 2026, RONNY P SASMITA contributed article to Asia Times, ‘the lure of economic nationalism beyond zero-sum’ on the global rise across ideologies and regions.
When countries become threatened by the dominance of foreign capital, they rapidly establish the wall of economic nationalism for a defensible shield. Not only the United States but also China, Europe, and other major powers are willingly putting economic sovereignty and security over national prosperity and efficiency. In particular, Trump’s slogan ‘America First’ lays a profound nationalism over China’s rise and moreover, signifies an intentional manipulation of the international economic system through tariffs, subsidies, and export bans.
In contrast, China would be condemned of exploiting the openness of globalization to accumulate wealth and industrial strength through economic nationalism, shielding its domestic markets with bureaucratic protectionism. Japan’s Prime Minister Sanae Takaichi has conducted a powerful strategy of economic self-reliance in response to the country’s supply-chain vulnerabilities. In Brussels as a capital of the EU, strategic autonomy has also become a core policy to reduce chronic dependence on China while hedging against political uncertainty and overwhelming economic nationalism by the United States.
Economic nationalism becomes more multi-transnational when it intertwines with chauvinist power prioritizing national interests at the expense of global cooperation. At this point, the very skeptical book, ‘The New Economic Nationalism’ by Madi Sarsenbayev and Monica de Bolle argues that the world resurrects economic nationalism as the central economic actor. When countries intervene so deeply in markets with the slogan of nationalism, the outcomes wouldn’t be equity or resilience but inefficiency caused by public debt and corruption. Currently, economic nationalism obviously represents a desperate scramble by countries with chauvinistic power to seize the shrinking remnants of prosperity while the global economic vessel sinks into stagnation.
The zero-sum idea also describes that one country’s gain must automatically be another’s loss. For example, if China builds a massive battery factory, the U.S. will deepen an existential threat to its auto industry impacting the world market. Nonetheless, China embodies leverage of economic nationalism, boosting domestic manufacturing industries. In response, Japan leads firms to relocate production out of China despite higher costs. As well, the EU as the world’s most successful champion of free trade arms itself to defend market sovereignty. The EU supports merchants’ contention that the world is fragmenting into rival economic blocs marked by mutual competition. Ironically, while developing countries claim protectionism as a necessity to escape poverty, advanced economies defend it as an essential preserving middle-class living standards.
Global Vision beyond Protectionism and Nationalism
Trade protectionism in a multipolar world bears global vision as a future outlook. Nonetheless, emergency situation of parallel trade systems currently shake the critical structure of global economy. The U.S. and its allies form one bloc by economic nationalism, while China, Russia, and others build alternatives. Although this multipolar trade order reduces interdependence, it also excessively increases competition. As the critical case, green technologies, AI, space, and biotechnology become the new trade frontiers in the protectionist battles.
There is a positive vision towards a cooperative global governance beyond trade wars and economic nationalism. Global crises such as climate changes, resource depletion, and food shortage force countries to maintain cooperation by balancing competition despite rivalries. Especially technological competition and supply chain vulnerabilities are worldwide issues that government intervention is properly considered.
However, the rise of uncoordinated national strategies obviously fuels new trade conflicts and economic fragmentation. Only a cooperative global framework with legitimate industrial policies can limit harmful protectionism through national security, industrial development and coordination, and potential principles for transparent support. Such rules assist to reconcile national strategies with international cooperation and preserve efficient open markets.
The world is currently going through highly confrontational policies driven by national interests and prolonged conflicts over trade or government interventions. Since Trump’s tariff war, an aggressive trade protectionism focusing on national interests or strategically important industries has emerged as an international phenomenon. As a result, it becomes a critical agenda to design common global rules that accommodate industrial policies within a cooperative framework. The main goal aims at avoiding arbitrary protectionist interventions or tariff conflicts. Such a coherent system of cooperative global governance and clear guidelines for industrial policies preserves free markets efficiently as well.
In the current context of escalating trade conflicts, reforming the global order might appear as a utopian idea to seize future opportunities. Nonetheless, the ultimate objective should be a system where industrial policy serves collective prosperity rather than narrow nationalism. This vision suggests that an interconnected world, economic security, and development can be achieved through global cooperation instead of confrontation. Countries successfully combining domestic strategic policies with international collaboration will take the best thriving solution in the emerging global economy beyond protectionism and nationalism.
Author: Sunny Lee – Founder and President at CGPS (Center for Global Peace and Security), and Director at IKUPD (Institute for Korea – U.S. Political Development), Washington DC. Sunny Lee is the author of 115 academic books in politics (original English and in German, French, Russian, Polish, Dutch, Italian, Spanish, and Portuguese). She is a bestseller writer not only in politics but also in literature on Amazon. Her recent book is titled: “The Influence on Humankind’s Peace through Korean Reunification: Creating new paradigm in social science by interdisciplinary research.”
(The opinions expressed in this article are solely those of the author and do not necessarily reflect the views of World Geostrategic Insights).
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Part 3 Post -World War II Ideologies and the Enduring Legacy of Communism
Part 4 Global Economy and Capitalism: a Vision for Economic Prosperity
Part 5 Socialism and Welfare: The Social Democratic Compromise