Deepening geopolitical and geoeconomic tensions and risks: A global overview

The world is navigating an era of unprecedented geopolitical and geoeconomic turbulence, marked by shifting alliances, resource competition, and economic fragmentation. Below is a detailed analysis of key flashpoints and their global implications.

US-China Strategic Rivalry: The US-China rivalry remains the defining conflict of the 21st century, spanning trade, technology, and military domains.Trade Wars-The U.S. maintains tariffs on approximately $370 billion of Chinese goods imposed since 2018, while China retaliated with tariffs on $110 billion of U.S. products. Bilateral trade dropped by 9% in 2023. Tech Competition-The U.S. CHIPS and Science Act (2022) allocated $52.7 billion to bolster domestic semiconductor production, directly countering China’s ambitions. Taiwan’s TSMC controls 60% of global chip manufacturing, intensifying tensions over Taiwan’s sovereignty. Military Posturing/China’s 2023 military exercises near Taiwan involved 200+ sorties, while the U.S. increased freedom-of-navigation operations in the South China Sea, contested by six nations.

Russia-Ukraine War and Energy Shock: The protracted conflict has reshaped global energy markets and security alliances.Economic Fallout-Sanctions on Russia have frozen $300 billion of its central bank assets. Despite this, Russia’s GDP grew 2.6% in 2023 due to wartime spending and oil sales to India/China.Energy Realignment-EU reduced Russian gas imports from 40% (2021) to 15% (2023), turning to LNG from the U.S. and Qatar. Global LNG prices surged 200% post-invasion before stabilizing.Human Cost-UN estimates 10,000+ civilian deaths in Ukraine as of March 2024, with reconstruction costs projected at $411 billion reported by World Bank.

Middle East Instability: Escalating conflicts threaten vital trade routes and energy corridors. Israel-Hamas War/Over 60000 casualties reported in Gaza since October 2024. Regional tensions spiked after Iran’s April 2024 missile strike on Israel, risking broader conflict. Red Sea Disruptions-Houthi attacks forced 90% of ships to reroute via Africa, adding 10–14 days and 15% higher fuel costs. Shipping rates Asia-Europe rose 150%, with insurance premiums up 30%.

Economic Fragmentation and “Friendshoring: Nations are decoupling into competing blocs, reshaping global supply chains. Trade Shifts-FDI in China fell 6% in 2023, while Vietnam saw a 32% rise and India attracted $65 billion. Mexico became the top U.S. trading partner, surpassing China.Rise of BRICS Plus-The expanded bloc (Egypt, Ethiopia, Iran, UAE) now represents 36% of global GDP (PPP). De-dollarization efforts include **60% of Russia-China trade settled in yuan/ruble.

Climate and Resource Competition: Critical minerals and climate policies are new battlegrounds. Green Energy Race-The DRC produces 70% of global cobalt, while Australia supplies 50% of lithium. Export restrictions on critical minerals surged 400% (2020–2023). Climate Diplomacy Stalls: COP28 failed to phase out fossil fuels, with developing nations demanding $2.4 trillion/year by 2030 for climate action.

Global Economic Impact: Growth Slowdown-IMF projects 3.1% global growth in 2024, with trade volume growth at 0.9% the lowest in decades. Inflation Pressures-Eurozone inflation eased to 2.6% (March 2024), but food and energy volatility persists.

The suggested Path Ahead:
UN Secretary-General António Guterres warns, “Divided economies will mean a divided world.” Solutions demand renewed diplomacy, multilateral cooperation, and inclusive frameworks to address inequality and climate risks. As tensions escalate, the cost of inaction grows unbearable for both people and the planet. This analysis underscores the interconnected crises defining time, urging stakeholders to prioritize stability over strategic rivalry.
[Compiled with data from IMF, World Bank, UN, and industry reports (April 2024).]

Probable Geopolitical and Geoeconomic Risks (2025–2030):
Escalation of Great Power Conflicts: Risk-US-China tensions over Taiwan or South China Sea could trigger accidental military clashes, disrupting global trade (30% of which passes through the South China Sea). Russia’s prolonged war in Ukraine risks spillover into NATO states (e.g., Baltic cyberattacks). Trigger Points/AI/quantum tech dominance races, Chinese pressure on Taiwan post-2024 US elections, or Russian sabotage of undersea cables.

Fragmentation of Global Trade and Finance: Risk-Accelerated “friendshoring” could split supply chains into US/EU and China/Russia blocs, raising costs (IMF: 7% global GDP loss by 2050 in a fragmented world). De-dollarization efforts (e.g., BRICS+ currency) may destabilize markets. Trigger Points-Secondary sanctions on third-party China-Russia trade partners (e.g., Türkiye, UAE) or collapse of WTO dispute mechanisms.

Energy and Food Security Crises: Risk- Climate disasters (droughts, floods) and conflict-driven disruptions (e.g., Red Sea, Black Sea) could spike prices. Global grain reserves are at 30-year lows (FAO), while 60% of oil trade flows through contested chokepoints (Strait of Hormuz, Malacca). Trigger Point-Major crop failure in the U.S. Midwest or India, or Iran blocking Hormuz in retaliation for strikes.

Climate-Driven Instability: Risk-Water scarcity (e.g., Nile, Mekong disputes) and migration crises (World Bank: 216 million climate migrants by 2050) may fuel conflicts in Africa, South Asia, and Latin America. Trigger Points: India-China Brahmaputra dam disputes, EU border crises from Sahel migration, or Arctic resource clashes.

Technological Warfare and Cyber Collapse: Risk-AI-driven disinformation, ransomware attacks on critical infrastructure (healthcare, energy grids), and autonomous weapons could paralyze societies. Global cybercrime costs may hit **$10.5 trillion annually by 2025 (McKinsey). Trigger Points-Election interference in 2024 U.S./EU votes, or a catastrophic attack on a major financial hub (e.g., SWIFT).

Potential Solutions:
Diplomatic Re-engagement: Revive Multilateralism-Strengthen UN Climate Fund, WTO reform, and crisis hotlines (e.g., US-China military communication channels). Neutral Mediation-Leverage non-aligned states (India, Indonesia) to broker ceasefires (e.g., Ukraine, Gaza) and resource-sharing pacts.

Economic Resilience Building:Diversify Supply Chains-Invest in critical mineral recycling (EU’s Critical Raw Materials Act) and regional energy grids (Africa’s Desert-to-Power initiative).Debt Relief-Expand IMF liquidity tools and G20 debt pauses for climate-vulnerable states (e.g., Sri Lanka, Pakistan).

Climate Security Frameworks: Global Green Deal- Link COP29 pledges to binding targets, funded by carbon taxes on shipping/aviation and IMF Special Drawing Rights. Water Diplomacy-Establish transboundary river treaties (e.g., Nile Basin Initiative) and desalination partnerships (Israel-Jordan model).

Tech Governance: AI Arms Control-UN-led treaty to ban lethal autonomous weapons and regulate AI bias.Cyber Norms-Enforce rules against critical infrastructure attacks (modeled on 2015 US-China cyber accord).

Inclusive Growth Policies: Global Taxation-15% corporate tax floor (OECD deal) to fund development and offset AI-driven job losses. Youth Investment-G20-led skills programs targeting 1 billion young workers in Global South by 2030.

It can mention that the next decade will test humanity’s ability to balance competition with cooperation. Without urgent reforms to governance, trade, and climate systems, the world risks cascading crises—from famine to war. However, proactive diplomacy, equitable resource sharing, and tech accountability could forge a more stable multipolar order. The cost of division is simply too high to ignore.
[Analysis done based on the data from IMF, World Bank, UNDP, and Chatham House (2024).]

Md. Kafi Khan: Columnist and Company Secretary, City Bank PLC