NYT: The World’s Superpowers are scrambling for an edge. It makes all of us less safe.

Barely a month after I became the economic counselor to the International Monetary Fund in 2022, the war in Ukraine would pose a challenge I hadn’t quite anticipated: managing the economic fallout of wars, Mr. Gourinchas, the chief economist of the International Monetary Fund from 2022 to June 2026, writes.

Since then, the global economy has had to navigate a series of conflicts — economic ones, like President Trump’s volley of tariffs, and actual ones, like the war in the Middle East involving the United States, Israel and Iran.

Too often, these shocks are viewed as isolated disruptions. They are not. They are interconnected symptoms of a deeper fragmentation reshaping the global economy. This fragmentation, both geopolitical and geoeconomic, risks ushering in what could become a new age of war. One defined not necessarily by constant military confrontation but by a persistent undercurrent of strategic economic rivalry and coercion and rising economic insecurity. And, yes, also increased risks of actual wars.

We shouldn’t be surprised that the world’s center of gravity is shifting. That’s consistent with poorer economies growing and catching up to their developed peers. Rising powers naturally reshape the global landscape into a multipolar one — China obviously comes to mind, but many other advanced and emerging economies across Asia, Latin America and Eastern Europe have benefited from this more than 60-year expansion.

The result is a dangerous feedback loop. As countries seek to insulate themselves from perceived risks, they risk fragmenting the global economy further still. This, in turn, encourages further insulation efforts — through tariffs, industrial policy, financial regulation, export controls or rising military spending.

The global economy has proved remarkably resilient so far. In response to the Iran war, energy markets have adjusted, and financial markets have remained calm. Countries such as China, Japan, Korea and the United States cushioned the disruption by tapping oil reserves or switching energy sources. Despite escalating trade tensions, global trade did not decline but strengthened in 2025. Instead, countries and firms adjusted trade routes and supply chains. Shocks that might once have triggered systemic breakdowns have instead been absorbed.

But don’t mistake resilience for invulnerability. Risks are mounting beneath the surface. Financial systems built on deep integration — notably around the U.S. dollar — could prove harder to sustain in a fragmented world. As countries seek to reduce their trade dependence on one another or, in Canada’s case, the United States, new fault lines may emerge, particularly as rapid technological transformations introduce fresh vulnerabilities around cryptocurrencies, critical minerals and artificial intelligence.

The question is whether the multipolar world we inhabit tomorrow will take the form of opposing blocs, whose contours have yet to emerge — witness the ructions among members at the latest NATO summit — or a more cooperative system built on shared rules and continued integration. Without a course correction, we risk drifting toward division.

Increasingly, the world’s superpowers are searching for strategic advantages, identifying choke points, adopting inward-looking policies and increasing military expenditures, all in the name of resilience and sovereignty. These actions may be individually rational, but collectively they make the world less secure, less prosperous and less stable.

Economics is not everything. Addressing economic issues, though, could be the starting point to repairing the more recent geopolitical cracks. It begins with acknowledging the risks. In a world of genuine strategic competition and coercion, we would be naïve to pretend nothing needs to change. Yet fragmentation doesn’t have to be our destiny. The challenge is not whether to build resilience but how to do so.

Importantly, the evidence suggests that economic instruments of coercion such as sanctions, tariffs and export controls rarely result in a strategic gain. They often accelerate fragmentation and invite retaliation. Ultimately, this is self-defeating. These tools should be used sparingly.

Lastly, international institutions can’t retreat in the face of these challenges; instead, cooperation must adapt and deepen. Shared issues such as artificial intelligence, financial stability, climate change and migration cannot be managed by countries acting alone. A multipolar world requires more coordination, not less.

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