The post-1980s neoliberal consensus of small government and free trade is being replaced by a mercantilist approach. Governments, particularly the U.S., now actively intervene to protect domestic industries and secure geopolitical strength, treating trade as a zero-sum game. This represents a fundamental economic shift for investors.

China's renewed commitment to the previously stalled Power of Siberia 2 gas pipeline is a direct geopolitical response to the U.S. using trade and energy as weapons. This move signals a strategic pivot to reduce its energy dependency on the Western Hemisphere amid escalating trade tensions.

The tariff war was not primarily about revenue but a strategic move to create an "artificial negotiating point." By imposing tariffs, the U.S. could then offer reductions in exchange for European countries committing to American technology and supply chains over China's growing, low-cost alternatives.

While publicly announcing a trade truce with China, the Trump administration simultaneously signed deals with other Asian nations to diversify supply chains and bolster defense partnerships, effectively preparing for future confrontation with Beijing.

The U.S. industrial strategy isn't pure "reshoring" but "friend-shoring." The goal is to build a global supply chain that excludes China, not to bring all production home. This creates massive investment opportunities in allied countries like Mexico, Vietnam, Korea, and Japan, which are beneficiaries of this geopolitical realignment.

Beyond the US-China rivalry, a new front is opening between Brussels and Beijing. Incidents like the French suspension of fashion retailer Shein are not isolated but symptomatic of growing European mistrust and a willingness to take action. This signals a potential fracturing of global trade blocs and increased regulatory risk for Chinese firms in the EU.

Unlike previous administrations that used trade policy for domestic economic goals, Trump's approach is distinguished by his willingness to wield tariffs as a broad geopolitical weapon against allies and adversaries alike, from Canada to India.

The era of economic-led globalization is over. In the new world order, geopolitical interests are the primary driver of international relations. Economic instruments like tariffs and export restrictions are now used as levers to assert national interests, a fundamental shift from the US-centric view where the economy traditionally took the lead.

The credit's requirements for North American manufacturing and sourcing from trade partners were designed to counter China's dominance in the EV supply chain. Its elimination undermines this strategic goal, leaving tariffs as the primary, less effective tool.