Fragile US-China truce threatened by tensions over Iran

GEOECONOMICS has emerged as a central concept to explain the volatility and complexity of today’s global landscape. It highlights the use of tariffs, sanctions and wider financial measures as tools of statecraft – measures now increasingly paired with the threat of military action.

While these trends pre-date the second Trump administration, US President Donald Trump has personified them in 2025 and 2026, reshaping the global political economy.

Perhaps the most prominent example is Trump’s aggressive use of tariffs. Yale University Budget Lab researchers estimate the overall average effective US tariff rate for imports has jumped to some 16.9 per cent, the highest since the 1930s’ Great Depression, from roughly 2.4 per cent at the start of 2025. This is a huge, and still widely underappreciated, change.