Geopolitics › Global issues & flashpoints
Trade wars and economic statecraft
2018–; escalated 2025· Issue or flashpoint
FactTreaties, membership, measured data, events.
The use of tariffs, export controls, sanctions and subsidies as weapons of national power, now central to world politics.
See it on the Geopolitics map →The picture
After 1945, the GATT and later the WTO steadily cut tariffs. Since 2018 that has reversed: US tariffs on China, Chinese curbs on rare earths, gallium and germanium, Western sanctions on Russia, and big subsidies such as the US CHIPS Act. In 2025 the average effective US tariff rate rose from about 2.4% to roughly 17%, the highest since the 1930s, per Yale's Budget Lab. The EU, Japan and South Korea struck deals capping most rates at 15%.
Why it matters
Trade wars raise prices, reroute supply chains and turn economic ties into leverage, so ordinary business decisions now carry geopolitical risk.
Key facts and numbers
Tariff notices in the US Federal Register, China's Commerce Ministry announcements, WTO tariff data, and effective-rate estimates from Yale's Budget Lab and others.
What to watch
Debated: whether tariffs bring factories home or mainly raise costs; most studies find US importers and consumers paid most of the 2018–19 and 2025 tariffs.
Inside this (5)
Connections (2)
▸US–China strategic rivalry erupted in 2018 into Trade wars and economic statecraftFact
The relationship
In 2018 the Trump administration, citing a Section 301 finding that China forced technology transfers and stole intellectual property, put tariffs on about $370 billion of Chinese goods; China retaliated. The fight widened into export controls, investment screening and sanctions, and the Biden administration kept most tariffs.
Since when and why
Tariffs began July 6, 2018; the Phase One deal of January 2020 paused escalation; Biden raised some, including 100% on Chinese EVs in 2024.
How we know
USTR's 2018 Section 301 report, tariff lists in the Federal Register and Chinese retaliation notices; China largely missed Phase One purchase targets.
What to watch
Debated: whether the tariffs changed China's behavior or mainly rerouted trade; studies find US consumers and firms bore most of the cost.
▸World Trade Organization (WTO) was built to referee Trade wars and economic statecraftFact
The relationship
The WTO, created in 1995 from the 1947 GATT, sets trade rules and settles disputes so countries need not retaliate on their own. As members turned to tariffs and subsidies in the name of national security, it lost its referee role: its appeals body has been frozen since 2019, and security exceptions are hard for it to judge.
Since when and why
Founded January 1, 1995 under the Marrakesh Agreement that ended the Uruguay Round; based in Geneva; 166 members; China joined in 2001.
How we know
WTO dispute records, including a 2022 panel ruling against US tariffs on Chinese goods that Washington appealed 'into the void' of the frozen appeals body.
What to watch
Whether WTO reform, including fixing dispute settlement, succeeds, or whether trade fragments into rival blocs governed by deals and power.