Tariffs were once blunt tools of protectionism. Now they’re precision weapons—and BRICS just loaded the counterstrike with rare earths and the spectre of inflation.
In the intricate tapestry of 21st-century geopolitics, trade—once championed as a pathway to global cooperation—has devolved into a battlefield where tariffs and economic alliances serve as modern weapons of influence and control.
While the West, led by the United States and the European Union, has long wielded tariffs and sanctions as leverage, the evolving response from emerging trade blocs threatens to flip the script, exposing uncomfortable hypocrisies and raising critical questions about fairness, interdependence, and power.
Tariffs: From Protectionism to Power Play
The US and EU have used tariffs extensively to shield domestic industries and enforce political objectives, especially amid resource shortages and strategic rivalries. The US’s tariff escalations since 2025, targeting China and others, epitomise this trend.
While China has responded with retaliatory tariffs, India has taken a more nuanced position—hesitant to commit fully to US tariff demands but not imposing sweeping counter-tariffs. India refused to join US tariffs on Chinese EVs in 2025, while quietly securing lithium deals with Argentina and Australia—playing both sides of the new resource chessboard. Instead, India continues to leverage its strategic role in global trade through careful diplomatic engagement.
CEPR’s 2025 report warns that tariffs have evolved into blunt instruments of economic diplomacy, risking the fracturing of critical trade relationships that underpin global growth and innovation.
The escalating trade disputes have disrupted global supply chains and elevated costs. The European Central Bank’s 2025 stress tests predict that these trade tensions could reduce global GDP growth by nearly 1% through 2027, while amplifying inflationary pressures.
Trade Blocs Reshape the Economic Landscape
Regional trade alliances like BRICS and ASEAN, home to vast resource reserves and populous markets, are asserting greater economic autonomy. Their control over essential natural resources—including energy and rare-earth minerals vital for technology and defence—grants them leverage that Western economies must reckon with.
A recent Bank of England report describes how the strategic hoarding or redirection of resources by these blocs has the potential to upend established supply chains, forcing the West to confront inflation spikes, currency volatility, and slowed technological development.
These blocs could restrict critical exports not only as retaliation but as a tactical move to reshape global economic dependencies. When BRICS throttles rare earth exports by 20%, the cost of an iPhone doesn’t just rise—it weaponises your grocery bill. Such shifts may elevate prices and increase input costs in manufacturing, technology, and military sectors, generating a potent secondary economic weapon: trade-induced inflation.
Inflation as Economic Warfare
Supply restrictions imposed by trade blocs carry the risk of triggering inflation surges in importing countries. These inflationary effects reduce purchasing power, weaken currencies, and strain broader economic stability.
History and current economic analysis suggest that inflation can be used indirectly as an economic weapon by disrupting affordable access to key resources and production inputs. This added pressure can deepen economic vulnerabilities in countries that have historically imposed sanctions or tariffs.
Ethics and the Future of Sanctions
Sanctions and tariffs remain important instruments for addressing violations of international norms when applied multilaterally and with transparency. Sanctions work when the world agrees. When one side writes the rules and the other pays the bill, they breed resentment—and smarter adversaries. However, when unilateral or politicised, they risk undermining the foundations of international cooperation and can destabilise the global economy.
Economic experts caution that weaponising trade amplifies divisions and complicates diplomatic relations, urging balanced approaches that maintain fairness while protecting strategic interests.
Navigating a Fragmented Future
With global supply chains increasingly fragile and trade blocs flexing economic muscle, the traditional Western dominance in trade, technology, and military supply is now being contested. Inflationary pressures and supply disruptions will test the resilience of economies and the resolve of policymakers worldwide.
The West built the global trading system. Now it must decide: reform it fairly—or watch BRICS rebuild it without us.
Recommended Further Reading
Roaring Tariffs: The Global Impact of the 2025 US Trade War (CEPR, 2025)
A detailed analysis of recent tariff escalations and their economic impact globally, including growth and supply chain effects.
Natural Resources Volatility and Causal Associations for BRICS Economies (PMC, 2022)
An insightful study on the strategic role of resource control in emerging economies and how it affects global economic dynamics.
International Trade and Macroeconomic Dynamics with Sanctions (ScienceDirect, 2023)
An academic exploration of sanctions regimes, their economic consequences, including inflation, and trade disruptions.
Supply Chain Disruptions and the Effects on the Global Economy (ECB, 2022)
A thorough investigation of how geopolitical tensions reshape supply chains and contribute to inflationary risks in the global economy.
References for “Economic Battlegrounds: Tariffs, Supply Chains, and the Future of Global Trade Alliances”
Centre for Economic Policy Research (CEPR). “Roaring Tariffs: The Global Impact of the 2025 US Trade War.” 2025.
https://cepr.org/voxeu/columns/roaring-tariffs-global-impact-2025-us-trade-war
European Central Bank (ECB). “Trade wars and central banks: lessons from 2025.” 2025.
https://www.ecb.europa.eu/press/key/date/2025/html/ecb.sp250930~c973459788.en.html
European Central Bank (ECB). “Supply Chain Disruptions and the Effects on the Global Economy.” 2022.
https://www.ecb.europa.eu/press/economic-bulletin/focus/2022/html/ecb.ebbox202108_01~e8ceebe51f.en.html
Bank of England. “Confronting today’s challenges to trade – speech by Swati Dhingra.” 2025.
https://www.bankofengland.co.uk/speech/2025/october/swati-dhingra-speech-at-the-central-bank-of-ireland-escb-cluster-2-academic-conference
PubMed Central (PMC). “Natural Resources Volatility and Causal Associations for BRICS Economies.” 2022.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9707950/
ScienceDirect. “International Trade and Macroeconomic Dynamics with Sanctions.” 2023.
https://www.sciencedirect.com/science/article/pii/S0304393225000819
Reuters, BBC News, Investec news portals, 2024-2025 coverage on global tariff policies and trade diplomacy.
https://www.reuters.com/world/us/trumps-trade-war-tariff-deadlines-key-upcoming-events-2025-10-13/
https://www.bbc.co.uk/news/articles/cn93e12rypgo
https://www.investec.com/en_za/focus/trade-wars.html
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