The Biden administration’s new tariffs on Chinese goods are primarily symbolic and political, with negligible economic impact, but they aim to protect and foster the U.S. clean energy supply chain, particularly in the EV sector. However, the tariffs are politically motivated and could undermine industrial policy goals by focusing on geopolitical competition rather than applying uniformly to all countries.

By funding the war against Russia, Bretton Woods institutions, such as the World Bank and International Monetary Fund, undermine the rule of law as embodied in their charters. They have probably violated principles of economic impartiality, prudence and political non-interference.

New international institutions, mechanisms and laws — as well as the reform and improvement of existing ones — should no longer be dominated by the West. The shaping of a new global order should be done through multilateral cooperation.

The year 2023 represents a turning point. If economic realities guide global prospects, it will be a positive turnaround. If geopolitics will continue to penalize economic prospects, a negative inflection point is more likely.

In The Economic Weapon: The Rise of Sanctions as a Tool of Modern War, historian Nicholas Mulder reminds us that even when Britain and Russia were savagely battling each other during the 1853-56 Crimean War, they continued to service their debts to each other. Likewise, when hedge funds launched predatory attacks on Asian currencies during the 1990s Asian financial crisis, they ultimately still played by the rules (even though their unethical behavior brought some East Asian countries’ economic progress to a halt).

After the 2008 global financial crisis, the world seemed ready to undertake meaningful reform of the international monetary system. But the promised structural changes never happened. And the recent spring meetings of the International Monetary Fund and the World Bank indicated that the current bout of global economic upheaval will similarly fail to spur transformation.

The Ukraine conflict will hit low-income developing countries with particular ferocity. These countries are not in Europe, nor are they involved in the war. Yet their people will suffer soaring energy costs, hunger, poverty and financial ruin.

Disappointing indicators show similar picture in US, China and Europe

In the postwar era, the multilateral development banks were created to facilitate global trade. Today, they are ‘America First’ targets.

China should be willing to loosen trade and investment restrictions if it seeks to play a leading role in globalization, International Monetary Fund First Deputy Managing Director David Lipton said.