The Global Economy and Authoritarian Risks

The world seems to be gradually realizing the threats posed by authoritarian economies.

China, for instance, is tightening its grip on the export of essential minerals and lithium batteries. With such restrictions impacting the U.S. and other countries, it raises the question: why did anyone think that relying on a major supplier governed by a mercantilist regime like the Chinese Communist Party was a wise move?

To make matters worse, China is limiting exports to undermine Western defenses while oversaturating markets with overproduced vehicles and heavily subsidized steel, making it difficult for market-driven producers to compete.

This situation is concerning.

And it’s not just the U.S. that faces these challenges.

All market-based economies are on shaky ground.

European multinational companies are urging the EU to tackle the issue of dumping facilitated by the Chinese government. Recently, a senior figure at the German steel firm Thyssenkrupp noted the urgent need for protection, stating, “The steel industry cannot survive.”

The Trump administration has opted to impose tariffs on Beijing and has hinted at further sweeping actions to tighten access to the American consumer market. Tariffs, while a necessary response, beg the question of what a long-term resolution would look like.

This could very well be a significant challenge during Trump’s presidency as the U.S. grapples with how to engage a dominant China.

For decades, China has employed tactics like coercion and monopoly power to establish its dominance in global trade.

Today must mark a turning point in freeing ourselves from Beijing’s influence.

We need to reconsider the notion that the global economy should remain open to every country, regardless of their behavior.

Instead of bolstering our adversaries, it might be wiser to exclude them and create a semi-global economy that supports rule-abiding nations and market participants.

The current shifts in global trade offer a rare chance to build a stronger, more stable economy reminiscent of the Bretton Woods Agreement in 1944—one that prioritizes stability, prosperity, equity, and growth.

Achieving this requires forming new alliances, promoting open markets, establishing clear regulations, and updating our rules. More importantly, we need tangible outcomes. We must work towards eliminating rogue states that disrupt the system and undermine fair play.

The Near Global Economy concept envisions a voluntary, U.S.-led economic alliance among nations that leverage market forces to protect our marketplaces.

Those who are willing to adhere to U.S. economic and trade principles will receive preferential access to the markets, investment, and technology of the United States.

While this economic pact is open to all who follow market regulations, it can impose restrictions or even close doors to entities that distort fair competition through dishonest means.

To build a semi-global economy, we must stand by four critical tenets: fairness, stability, openness, and freedom.

• Fairness: A dedication to market principles is essential. American companies and workers suffer losses not because they’re unproductive, but because some foreign competitors operate without accountability—using tactics like forced labor, environmental damage, or bribery to dominate markets. China’s monopoly over key minerals, driven by price manipulations rather than actual advantages, displays this clearly.
• Stability: Essential for growth. Russia’s invasion of Ukraine has destabilized Europe significantly. Issues like aggressive warfare, coup attempts, and cyber-attacks should exclude offending states from our semi-global economy.
• Openness: Information must flow freely. When transparency exists, businesses can plan better and mitigate risks. Without it, corruption thrives. We must tackle financial opacity, anonymous ownership, and tax havens head-on.
• Freedom: A fundamental element of economic power. Oppressive governments violate property rights and render investments uncertain. Conversely, if reformers gain power, the Near Global Economy can offer them a pathway to inclusion.

Declaring hostile actions against your customers isn’t smart business.

China’s economy is also dependent on global market practices, just like the U.S.

This week, China’s government effectively issued an economic death warrant by its actions.

Now is the moment to forge a new trading system that focuses on active partnerships, equitable rules, and clearly defined boundaries.

Creating frameworks that advocate for these principles is how we can prevail in the economic conflict that’s already in motion.