For eight decades, the West, especially the European nations, has treated markets as neutral arenas that were ruled by rules – not power. This era is over. The global economy is now characterized by rivalry, coercion and control. Trading is no longer just in a rules based on the rules, but has become part of the geopolitical strategy. And that is not a temporary disorder.
Like the IMF chief Kristalina Georgieva has warnedThe world eaten into competing blocks. The old vision of globalization has collapsed. What seemed to be a natural setup for many in Europe was indeed a historical anomaly: a system that was built on an American world order that was enforced by institutions such as NATO and the Bretton Woods system. This scaffolding trembles now.
The global market market we accept makes a world of weapons dependent on each other. To navigate it, the West needs a new kind of alliance: a NATO for trade.
The end of the 80-year economic illusion
After the Second World War, the United States and its allies built an economic system that is supposed to prevent a return to the destabilizing chaos of the 1930s. Institutions such as IMF, World Bank and Gatt were founded to underpin global capitalism under American leadership. The security was provided by the US military ceremony, which was codified in NATO. Trade flourished. So also Europe, the restoration and integration of which was signed by American guarantees after the war.
When the Cold War ended, the illusion was that global capitalism was distributed independently of geopolitics. In the nineties, many believed that the market was self -regulating and naturally of peace -promoting advocates of peace promotion.
Today this illusion broke with the return of the great power competition. Economic liberalism no longer corresponds to geopolitical reality.
We enter into a way of thinking of the war economy – one in which national security exceeds price efficiency. This shift was accelerated by two shocks: the invasion of Russia into Ukraine and the economic rise of China.
For example, the dependence of Europe was exposed to cheap Russian gas when Russia armed its rivers in 2022. Germany in particular had given more of the market logic than at geopolitical risk. A rating of 2021 even secured Nord Stream 2 months earlier. The result: an energy crisis and a crazy scramble for LNG.
Far away, while the West held the orthodoxy of the free market, China has built up a business that will be ready for the war for decades. Under the initiatives “Made in China 2025” and “Military Civil Fusion”, they identified key sectors and moved them to dominate them, including rare earths, batteries, solar and AI. China produces today Over 75% From lithium-ion batteries and Almost all of the world in the world. It controls the supply chains for the energy transfer – and increasingly the components of military power.
It is crucial that China is not afraid to use this market dominance for political purposes. In 2010 it lowered exports to Japan about an argument. And its green technical dominance creates dependency in Europe and beyond. China Gallium and Germanium have recently imposed, which is of crucial importance for global semiconductor development.
In response to this shift, the US security advisor Jake Sullivan has the US openly argued for a more strategic form of capitalism that rejects free market models. The trade is no longer neutral. What matters are not just costs, but control.
80-year illusion over, a new paradigm is being created
In summary, we will enter a new, really geopolitical-economic paradigm in eight decades.
The comfortable war between the post-war war periods seemed the markets of the greatest importance and the history supposedly ended-had space for a raw and hobbes.
But in contrast to the 1930s, the West is not central or defenseless; We are wealthy and late wake up the challenge. We now have to use our strengths in a clear way.
The task is to update the institutions and ways of thinking of the liberal order of the 20th century in order to hit the more lively reality of the 21st century.
If we are successful, geo economy does not have to lead to a catastrophe, but we have to subordinate the trade with the strategy – intentionally and intelligently – just as our ancestors did in the 1940s when they built the system that delivered peace and prosperity for so long.
The trade agreement of EU-US underlines this shift
The inequality of the latest EU-US trade agreement, in which the block duties swallow 15%, is a perfect example of this shift. It also shows that the decades of dependence on Europe on the United States has become a strategic susceptibility.
This episode increases the necessity of Europe and others to structurally diversify our trade relationships and value chains in a world of escalating economicing. It has to make us deepen partnerships beyond the transatlantic axis without relying too much on China.
This is not the 1930s. Europe remains a wealthy, democratic and stable region. But generations after the war have no storage of systemic disorders. We assumed that liberalism was permanent. We believed: “It’s the economy, stupid.” Now we learn that strategic power, not the market price, determines the results.
Defense is a typical case. Until recently, most NATO members underline their military. By 2021, only six reached the 2% GDP target. That changed quickly after 2022. But the defense industry was caught flat. A plan to send 1 million mussels to Ukraine showed that the EU’s production capacity has decreased far. For decades, Europe optimized for efficiency, not endurance.
The same applies to trade. Germany’s model of change – diameter – Handel –Change through trade –is covered. Berlin is now investigating Chinese investments and reduces the dependency on authoritarian suppliers. Strategic autonomy throughout Europe is the new catchphrase. But the way of thinking only begins.
A NATO for trade: the strategic task ahead
Market liberalism assumed that trade would bring peace. But today the trade is a lever tool. The new mantra must be resilience – including the development of domestic capacities, even if it is more expensive. This is not a temporary attitude. It is the new normality.
And this new era requires new institutions. Just as NATO was built to defend common security, the West now needs a strategic alliance to defend the common economic sovereignty – a NATO for trade – including nations such as Japan, South Korea and Australia.
Economic security must become a common goal, not just a national one. The United States has already taken steps with domestic investments in chips and clean tech and prohibits important tech exports to China. Now the EU suit follows with the Chips Law and critical raw materials law. These are necessary, but inadequate measures. We now have to build an economic coalition of the will.
This means joint systems, aligned trade rules and the collective protection of critical supply chains. This means accepting higher costs to protect long -term freedom. Cheap goods are not cheap if they make us dependent on enemy forces and geopolitical power games.
The task is not to withdraw from global trade, but to rebuild it on strategic conditions. The free market cannot defend itself. How peace must be protected by alliances.
End of economic liberalism, the return of the strategy
Market liberal is dead. It died when we stopped thinking that trade was almost at a price. It died when supply chains became slaughtered places. And it died when autocrates were dependent on each other during democracies.
If we want to preserve prosperity, we have to be ready to defend it – not only with tanks, but with contracts, tariffs and trustworthy partners.
A NATO for trade is not a metaphor. It is the next necessary institution in a world in which trade is no longer protected from politics. If the West can build it, the collapse of market liberalism does not have to mean a decline. It can be the beginning of a more resilient and safe economic order.
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