Q. The 2025–26 global tariff war and the resurgence of protectionism signal a shift from globalisation to ‘strategic decoupling.’ Critically examine this trend and its implications for global economic interdependence and national sovereignty.
How to Approach
Establish what strategic decoupling means, examine its implications for interdependence and sovereignty, then critically assess whether this is a genuine shift or globalization simply restructuring itself.
Answer
The post-2025 global tariff war marked by sweeping US tariffs on Chinese goods, retaliatory measures and friend-shoring of supply chains signals a fundamental shift in how states relate to global economic interdependence. Strategic decoupling refers to nations deliberately reducing dependence on rivals in critical sectors like semiconductors, clean energy and defence manufacturing.
From Hyperglobalisation to Strategic Autonomy
The post-Cold War consensus that deeper integration benefits all has collapsed. COVID-19 exposed supply chain vulnerabilities, and growing US-China rivalry pushed states toward what Philip Cerny called the Competition State, prioritising national economic security over open markets. The US CHIPS Act, India's PLI schemes and the EU's Strategic Autonomy agenda all reflect this shift from market logic to geopolitically driven industrial policy.
Implications for Interdependence and Sovereignty
Strategic decoupling does not end interdependence; it restructures it around geopolitical alignment rather than economic efficiency. As Joseph Stiglitz warns, this fragmentation raises costs, reduces innovation and risks splitting the global economy into competing blocs. Developing countries face the sharpest consequences, pressured to choose sides rather than benefit from open access to all markets.
Paradoxically, decoupling both strengthens sovereignty by reclaiming policy space and complicates it by raising the economic cost of genuine autonomy, as David Held's concept of complex interdependence suggests.
Strategic decoupling is not deglobalisation; it is globalisation reorganised along geopolitical lines. The real challenge is building resilient interdependence that preserves strategic autonomy without abandoning the cooperative frameworks needed for climate, digital and health governance.
