In a world marked by rapid change and shifting alliances, the ongoing trade disputes between major economies, such as the United States of America and China, serve as a potent reminder that the only certainty is uncertainty. These conflicts, fueled by tariffs, sanctions, and retaliatory measures, are creating economic turbulence, disrupting global supply chains, and reshaping international alliances. The role of China in the unfolding Gaza conflict is a case in point. As the worldwide order adjusts to new dynamics, traditional rules of realpolitik prevail, where interests—not ideologies—drive relationships and strategies. In this complex landscape, the role of emerging blocs like BRICS is becoming increasingly significant, offering both challenges and opportunities in a world where the only constant is change.
The trade war between the USA and China, which began in 2018, is emblematic of the broader economic and geopolitical uncertainty facing the world today. The USA imposed tariffs on over $360 billion worth of Chinese goods, increasing the average tariff rate from 2.7% to 17.5%. China retaliated with tariffs on $110 billion of USA exports, 5.7% to 20.4%. While both countries reached phased trade agreements in 2020 and 2022, tensions have persisted, affecting technology, finance, and other issues.
The uncertainty generated by these disputes has led to significant shifts in global supply chains. Companies that once relied on Chinese manufacturing are diversifying their supply chains, seeking alternatives in Southeast Asia, Mexico, and beyond. According to a survey by QIMA in 2021, over 75% of US businesses were actively seeking to diversify their supplier base outside China. This restructuring is not just a temporary adjustment but a fundamental realignment of global trade networks that may permanently alter the landscape of international commerce.
Trade wars also contribute to shifting international alliances. As the USA and China confront each other, other nations are recalibrating their strategies. Traditional allies like the European Union have found themselves caught between these two economic giants, compelled to balance their political and economic interests carefully. For instance, while the EU is aligned with the USA on many issues, it remains wary of fully decoupling from China, given its substantial trade relations. In 2023, China was the largest partner for EU imports of goods (20.5 %), followed by the USA (13.7 %), the United Kingdom (7.2 %), Switzerland (5.5 %) and Norway (4.7 %). From the export perspective, in 2023, China was the third largest partner for EU exports of goods (8.8 %). It was preceded by the USA (19.7 %) and the United Kingdom (13.1%), followed by Switzerland (7.4%), and Türkiye (4.4 %).
This uncertainty and shifting alliances are fertile grounds for blocs like BRICS (Brazil, Russia, India, China, and South Africa) to assert influence. The BRICS countries, which together represent over 40% of the world’s population and approximately 23% of global GDP, have increasingly positioned themselves as counterbalances to Western-led economic structures. BRICS is actively seeking to expand its membership, with countries like Saudi Arabia, Türkiye, and Egypt expressing interest in joining. This expansion could amplify the group’s economic and geopolitical clout, providing an alternative platform for countries seeking to hedge against the unpredictability of the USA-China rivalry.
The impact of global trade wars is a double-edged sword. On the one hand, trade wars introduce negative consequences such as economic instability, market volatility, and supply chain disruptions. These conflicts erode trust between nations, hinder investment, and complicate global governance efforts. The International Monetary Fund warned in 2019 that prolonged trade tensions could reduce global GDP by 0.8% by 2022.
On the other hand, these tensions could have some positive effects, depending on perspective. For example, they might encourage diversification and innovation by compelling businesses to develop new markets, explore alternative suppliers, and invest in emerging technologies. A study on the heterogeneous impact of the USA-China trade war in the presence of global value chains found that a tariff increase in intermediate goods benefits the domestic industries that produce the targeted intermediate goods but hits the domestic industries that rely on the targeted intermediate goods. In addition, compared with a tariff increase in intermediate goods, a tariff increase in consumption goods causes a bigger rise in the domestic consumer price index. Vietnam and Mexico have benefited the most from such tensions.
In the context of realpolitik, trade wars serve as tools for nations to protect strategic industries, enhance national security, and recalibrate their global standing. In a system driven by permanent interests rather than permanent alliances, trade wars become mechanisms to secure those interests. In the case of the USA-China trade war, evidence is growing that the two countries’ GDPs have been negatively impacted, but countries in their constellations have benefited, inferring that this trade war aims to serve primarily national security and global standing anchored in commerce and economy.
Whether by means of response or opportunism, the expansion of BRICS comes at a time of heightened global uncertainty. With increasing geopolitical tensions, BRICS represents a platform for member states to pursue their economic and political interests independently of traditional Western powers, which are often associated with neocolonialism. The group’s New Development Bank, for example, offers an alternative to the World Bank and IMF, providing funding for infrastructure and development projects without the same political conditions attached.
BRICS’ expansion could enhance its ability to shape global economic rules, promote multipolarity, and provide a counterweight to USA. and EU economic dominance. For instance, by advocating for reforms in international institutions like the United Nations and the World Trade Organization, BRICS could help foster a more balanced global order where multiple centres of power coexist. Oman should align itself with such calls.
However, the success of BRICS in this uncertain landscape depends on its ability to manage internal differences and present a cohesive vision. The interests of BRICS members are not always aligned. For example, India and China have longstanding border disputes. Nevertheless, the group’s shared interest in challenging Western hegemony provides a common platform that could potentially overcome these differences, at least in the short to medium term.
As trade wars and shifting alliances become the new norm, the ‘certainty of uncertainty’ prevails in international relations. The old rules of the game - based on fixed alliances and predictable outcomes—are increasingly giving way to a more fluid and dynamic environment. Here, there are no permanent friends or enemies, only permanent interests.
This environment calls for a recalibration of strategies by states, businesses, and other stakeholders. Countries must be agile and capable of adapting to rapidly changing circumstances while remaining focused on their core interests. For businesses, this means building resilient supply chains, exploring new markets, and staying ahead of regulatory and political changes. The experience from Mexico and Southeast Asia suggests that this is an opportune moment to create domestic production capacity and complexity or scale up existing ones.
In a global system often perceived as driven by realpolitik and economic interests, the place of value becomes complex. While values such as justice, rule of law, democracy, human rights, and environmental sustainability continue to be invoked by many Western nations, their application is often selective, based on strategic considerations rather than universal principles.
This creates a paradox: while values are essential to building trust and cooperation, they are frequently subordinated to pragmatic interests. In this context, the challenge for global actors is to balance their immediate interests with their long-term commitments to a value-based international order. For BRICS, the challenge will be to present an alternative that goes beyond mere opposition to Western dominance, offering a coherent vision that integrates values with interests.
Oman finds itself at a critical juncture as global trade wars, particularly between major powers like the USA and China, create a landscape of economic uncertainty and shifting alliances. Given its strategic location in the Arabian Peninsula and its longstanding policy of neutrality and balanced diplomacy, Oman must carefully navigate these complexities without compromising its neutral stance. For example, around 94% of Oman’s exports to China are hydrocarbon products (crude oil and gas). China ranked as the top destination for Omani exports.
Oman should accelerate its economic diversification strategy to reduce its dependence on any single commodity or external market. In 2022, Oman ranked 75 out of 133 countries in Economic Complexity Index. By expanding sectors like manufacturing industries, logistics, fisheries, renewable energy, and mining, Oman can enhance its economic resilience against global trade disruptions. Initiatives aligned with Oman Vision 2040 aiming to attract foreign direct investment (FDI) from diverse sources and develop industries that are less vulnerable to geopolitical tensions have already been initiated, but require continuous calibration.
To mitigate the risks associated with global trade disruptions, Oman should invest in its technological and digital infrastructure. Enhancing digital connectivity, cybersecurity, and digital trade capabilities will allow Oman to participate in the growing digital economy and ensure that its businesses remain competitive in an increasingly digitalized global marketplace.
Oman should focus on strengthening its domestic economic resilience by investing in education, skills development, and innovation. Building a knowledgeable and adaptive workforce will enable Oman to respond more effectively to external shocks, whether from trade disruptions or geopolitical tensions. Promoting entrepreneurship and small and medium-sized enterprises will further enhance the country’s economic flexibility and sustainability.
Oman should continue to employ a strategy of “strategic hedging,” where it engages with multiple major powers—such as the USA, China, Russia, and the EU—without overcommitting to any single alliance or bloc. This approach allows Oman to balance its relationships, avoid entanglement in global conflicts, and protect its national interests while preserving its autonomy and neutrality.
In summary, Oman’s response to the current global trade wars and shifting international alliances should be guided by its longstanding principles of neutrality, pragmatism, and strategic flexibility. By diversifying its economy, leveraging its unique geographic position, promoting multilateralism, and maintaining a balanced approach to international relations, Oman can navigate the uncertainties of the global landscape without compromising its neutrality. In a world where change is the only constant, Oman’s ability to adapt and maintain its strategic independence will be key to its continued prosperity and stability.
The current landscape of global trade wars, shifting alliances, and the rise of alternative blocs like BRICS underscores the reality that change is the only constant. In a world where traditional alliances are being tested, and the rules of engagement are rapidly evolving, states must remain vigilant, adaptable, and strategically focused. The certainty of uncertainty is a defining feature of this era, and those who navigate it successfully will be the ones who understand that in international relations, there are no permanent allies or adversaries, only enduring interests.
As global actors recalibrate in this dynamic environment, the ability to balance realpolitik with principled action will determine the shape of the new global order. The future is uncertain, but it is in navigating this uncertainty that opportunities for a more balanced and multipolar world may emerge.
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