Tariffs, Subsidies, and the Struggle to Shape the Next World Order: Antonio Gramsci, an Italian political thinker writing from a fascist prison cell in the 1930s, captured something timeless about periods of deep upheaval.
He saw that when old systems collapse and new ones have not yet taken hold, the result is chaos, uncertainty, and the rise of forces once thought unimaginable.
Today, almost a century later, his warning feels uncannily familiar. Across the world, the structures that defined the post-Cold War order – especially the institutions of free trade and liberal democracy – are eroding.
The End of Globalization Has Arrived
A new world is struggling to emerge, but it is still taking shape, and in the space between, instability, rivalry, and confusion are growing.
Unipolarity is over. The long arc of neoliberal globalization has ended. What was once described as inevitable – free markets spreading freedom, supply chains binding the world together, economic growth dissolving old rivalries – has instead revealed its limits. What we are witnessing is not a temporary disruption. It is the end of an era, and the early, violent stirrings of something new.
The signs have been building for years. The financial crash of 2008 exposed the hollowness of the global financial system. The pandemic shattered illusions about supply chain resilience. The return of great power competition made clear that economic interdependence would not prevent rivalry. Wars, sanctions, technological decoupling—these are not passing storms. They are the weather of a new era.
The question many are asking today is whether the United States can actually win a tariff war against China when Beijing is willing to spend so heavily to prop up its industries. Every year, China pours three to four percent of its GDP into industrial subsidies, shielding key sectors from global market pressures. Tariffs may raise costs for Chinese goods, but subsidies can blunt the pain, keeping production lines running even when basic competitiveness has eroded.
At first glance, it looks like a losing battle. But appearances deceive. China’s massive subsidization is not a sign of health. It is a sign of exhaustion. A vibrant economy does not need endless government life support. China’s industrial policy has become a crutch for a system weighed down by debt, demographic collapse, environmental degradation, and political sclerosis. Subsidies may postpone the reckoning, but they cannot prevent it.
The real point is that the United States is not fighting to win a tariff war in the old sense. It is fighting to adjust to a new reality. Tariffs, supply chain reshoring, export controls – these are early moves in a much larger shift away from the failed orthodoxies of the unipolar moment. The real contest is not about whether tariffs can outlast subsidies. It is about whether the United States can reforge its economic and strategic foundations for an era when power, not efficiency, decides outcomes.
China’s path tells us a lot about where the global economy is heading. Integration did not liberalize China. It empowered it. Beijing took the tools of globalization and turned them into weapons. Yet China is not the unstoppable force it once appeared to be. Its economy is slowing. Its society is aging. Its debt levels are suffocating growth. The model that fueled its rise – massive investment, cheap labor, export surpluses – is cracking under the weight of its own contradictions.
At the same time, China’s success in building an industrial juggernaut has made the world more dangerous. Trade and investment are no longer neutral. Every supply chain, every data flow, every financial transaction now carries strategic weight. The old dream of a seamless global economy is gone. In its place is something rougher, more adversarial: a system shaped by national interests, power politics, and hard choices.
The United States is waking up to this, though slowly. Tariffs on Chinese goods, efforts to bring critical industries back home, investments in semiconductors, limits on strategic technologies—none of these would have happened if the old consensus were still alive. They mark the beginning of something different: a reassertion of the idea that national survival matters more than economic abstractions.
But tariffs alone are not enough. The bigger task ahead is to build a new framework for national power. That means revitalizing American industry. It means reconnecting finance to the real economy. It means rethinking trade, investment, and technology policy through the lens of sovereignty and resilience, not just price and efficiency. It means forging alliances not just based on shared values, but on shared strategic needs.
International institutions will have to change too. The WTO, the IMF, and the rest of the old Bretton Woods order’s machinery were built for a world that no longer exists. They may be reformed. They may be replaced. But they cannot be relied upon to guide us through the storm that is coming. New rules, norms and institutions will emerge – through trial, error, and sometimes conflict.
The same reckoning applies outside the United States. Europe must stop pretending it can survive as a neutral player in a world of geopolitical blocs. India, Japan, Brazil – all must make hard choices about their place in the evolving international order. Strategic autonomy will be the coin of the realm. Those who fail to achieve it will find themselves vulnerable to forces they cannot control.
None of this will be easy. The world is not smoothly transitioning from one international order to another. It is stumbling, fighting, and lurching toward a new equilibrium. Fragmentation will bring risks. Competition will bring confrontation. Some regions will become battlegrounds not just for influence, but for survival.
The goal is not to retreat into isolation or to seek dominance through raw coercion. The goal is to build a system where sovereignty is real, where strategic resilience is prioritized, and where cooperation happens on the basis of strength, not fantasy.
There are many who still dream of restoring the old international order, of reweaving the torn fabric of globalization. But the threads are broken. The old order is in terminal decline. What lies ahead must be built from scratch, with a clear-eyed view of the realities we now face.
Gramsci saw it in his time. We must see it in ours. The old world is dying. A new one struggles to be born. And the monsters that fill the space between will not disappear on their own. They must be confronted, contained, and overcome by those willing to build something stronger than the ruins they inherit.
The choice before us is simple, even if the path is not. Either we summon the courage to forge a new order for a more fractured and competitive world, or we will be consumed by the monsters of transition.
About the Author: Andrew Latham
Andrew Latham is a non-resident fellow at Defense Priorities and a professor of international relations and political theory at Macalester College in Saint Paul, MN.
