Opinion: US policy accelerates China's rise as the world's leading economic power

Tartu University Professor Urmas Varblane analyses how US trade policy undermines the rule-based international order and facilitates China's rise to global economic leadership. The international trade system established after World War II is giving way to an approach based on geopolitical interests. Trade has become a weapon in great power competition.

Tartu University Professor of International Business and Academician Urmas Varblane warns that the United States' current trade policy not only damages international cooperation but directly accelerates China's rise as the world's leading economic power.

Rule-based order in decline

The international trade system created after World War II was built on a simple principle: countries reduce trade barriers and resolve disputes through international institutions. This approach also gave smaller countries the opportunity to participate in the global economy on equal footing and created the foundation for unprecedented economic growth.

Over the past decade, however, this system has increasingly come under strain. Major powers, particularly the US, have begun pursuing not agreed international rules but rather their own strategic and geopolitical objectives. Trade has become a tool of power struggle.

US-China confrontation

This trend is most sharply evident in US-China relations. In Varblane's assessment, the paradox lies in the fact that American protectionist policy, which is supposed to rein in China's growth, could actually accelerate Beijing's strengthening in the global economy. As the US withdraws from international cooperation frameworks, China fills the resulting void.

This process places particularly smaller open economies, including Estonia, in a difficult position. Smaller countries are the greatest beneficiaries of the rule-based order, as it protects them from the arbitrary actions of major powers. In a world of geopolitical trade logic, however, they have considerably fewer cards to play.