Superpowers Deepen $35 Trillion Economic Rivalry as Fragmentation Raises War Risks
Updated
Updated · The New York Times · Jul 10
Superpowers Deepen $35 Trillion Economic Rivalry as Fragmentation Raises War Risks
1 articles · Updated · The New York Times · Jul 10
Summary
A new IMF-linked warning says superpower competition is no longer a series of isolated shocks but a broader fragmentation that is making the global economy less secure and raising the risk of war.
The shift is being driven by a more multipolar world, where interdependence in energy, critical minerals and advanced chips creates choke points that states can exploit through tariffs, export controls and financial pressure.
$35 trillion in annual trade and decades of integration helped lift living standards, with extreme poverty falling from 43% in 1990 to about 10% today, underscoring what is at stake.
That same integration now feeds a feedback loop: countries try to insulate themselves from supply and security risks, but tariffs, industrial policy and higher military spending can deepen fragmentation further.
As nations build economic walls for security, are they unintentionally paving the road to a new global war?
With global trade being 'rewired,' which nations will become the new economic powerhouses, and which will be left behind?
As US sanctions lose their bite, what new form of power will dominate the fragmented global stage of tomorrow?
The $35 Trillion Global Fragmentation: US-China Rivalry, Middle Power Rise, and the Future of Economic Order
Overview
The report highlights a world economy marked by growing fragmentation and deep uncertainty, as most respondents express a negative outlook for both the near and distant future. Over half describe the global outlook as turbulent or stormy, with nearly one in five fearing catastrophic risks ahead. This pessimism is fueled by slowing growth in major economies, including the US and China, and a projected global growth rate of just 2.6% in 2026. The intensifying US–China rivalry, especially in technology, is reshaping markets and increasing risks, while middle powers are rising in influence, further dispersing global power and complicating international cooperation.