This notion underpins the Chinese doctrine Unrestricted Warfare, a 1999 treatise by Qiao Liang and Wang Xiangsui. Its core argument was simple: future wars would extend beyond battlefields to economic and technological domains, making economic conflict a central front.
Tariffs and Metals: The Weapons of Economic War
In economic warfare, one uses measures to weaken rivals and strengthen oneself. This is playing out between the world’s two largest economies. One stark example is the tariff policy of the United States, which since Donald Trump’s return to office in January 2025 has escalated to levels unseen in nearly a century. According to Yale University estimates, the effective US tariff rate now stands at 17.3%, the highest since 1935, when it was 17.5%. These figures are not just statistical curiosities; they are reshaping global trade flows and living standards.
Action invites reaction. China’s response has been to weaponise rare earth metals. Economic power, history reminds us, inevitably translates into control over strategic resources. China’s Ministry of Commerce has imposed stringent export licensing, throttling supply and driving up costs for European and American manufacturers, especially in the automotive sector. Neodymium prices, for instance, have risen more than 13% in just two months. As input costs climb, electric vehicles become more expensive, squeezing manufacturers’ margins, forcing cost-cutting and triggering layoffs. Rising unemployment feeds political instability in democracies—a stark reminder that economic war has tangible and painful consequences.
In Europe, however, this dimension of conflict is often overlooked. To grasp the scale of today’s economic war, one must first understand why Europeans struggle to acknowledge it. There are at least two reasons.
The End of ‘Happy’ Globalisation
The first is historical. The collapse of the Soviet Union fostered a powerful narrative: that the world was inexorably moving towards perpetual peace, echoing the vision of the German philosopher Immanuel Kant. Cooperation and collective problem-solving were elevated as the only acceptable paradigm. The campaign against global hunger epitomised this optimism—a conviction that famine could be eradicated outright. Ukraine’s war exposed grain as an economic weapon, and Gaza shows hunger’s role in conflict.
For Europeans, accepting this disillusionment—the return to a world where man is wolf to man—remains profoundly uncomfortable.
The second reason is more philosophical. Economic war presumes divisions between rich and poor states, with wealth itself generating conflict. The creation of wealth invariably entails struggle—between individuals, within societies, and across nations. Marxist and communist experiments failed spectacularly. Contemporary attempts to redress inequality—such as woke politics—represent diversions, shifting focus to cultural issues rather than economic disparities. In the absence of meaningful solutions, denial becomes the default. The reality of economic war is simply ignored.
What Is to Be Done?
The first is historical. The collapse of the Soviet Union fostered a powerful narrative: that the world was inexorably moving towards perpetual peace, echoing the vision of the German philosopher Immanuel Kant. Cooperation and collective problem-solving were elevated as the only acceptable paradigm. The campaign against global hunger epitomised this optimism—a conviction that famine could be eradicated outright. Ukraine’s war exposed grain as an economic weapon, and Gaza shows hunger’s role in conflict.
For Europeans, accepting this disillusionment—the return to a world where man is wolf to man—remains profoundly uncomfortable.
The second reason is more philosophical. Economic war presumes divisions between rich and poor states, with wealth itself generating conflict. The creation of wealth invariably entails struggle—between individuals, within societies, and across nations. Marxist and communist experiments failed spectacularly. Contemporary attempts to redress inequality—such as woke politics—represent diversions, shifting focus to cultural issues rather than economic disparities. In the absence of meaningful solutions, denial becomes the default. The reality of economic war is simply ignored.
Statement
Globalisation’s naive optimism is dead; economic war defines our age. The US, under Trump, has raised tariffs to 17.3%—levels unseen since 1935—while China weaponises rare earth metals, throttling supply and inflating costs for Western industries. Europe, lulled by post–Cold War illusions of perpetual peace, remains dangerously unprepared. Economic policy is now artillery; trade flows are battle lines. The friend–enemy logic Schmitt warned of governs markets as much as borders. Europe must stop being in denial, forge a unified industrial strategy, and act decisively—or watch its prosperity become collateral in a conflict it refuses to name.
