“Trade wars are good and easy to win” —Donald Trump, 2018
Six years later, the world is on the brink of discovering just how catastrophically wrong that assumption was. What began as tit-for-tat tariffs and nationalist slogans has now evolved into a weaponized economic doctrine: the age of reverse tariffs.
In an attempt to regain industrial supremacy and combat inflation, the United States has flipped the trade playbook. Instead of taxing imports, Washington now subsidizes exports under the banner of “reshoring” and “economic patriotism.”
This effectively turns global markets into battlegrounds, as cheap, subsidized American goods flood world markets, undercutting foreign competitors and destabilizing economies worldwide.
These reverse tariffs—less visible than traditional import duties—have one goal: corner global trade without appearing overtly protectionist. The impact is devastating for manufacturing hubs around the world, many of which cannot compete against a state-backed export machine.
China’s Counter-Play: Silent Siege Economics
China, long accustomed to economic war by other means, is responding with calculated precision. Instead of retaliating through open tariffs, Beijing is weaponizing its dominance in rare earths, lithium, graphite, and high-end semiconductors.
These materials are critical to everything from smartphones to missile guidance systems. By slowly tightening export controls, China is sending a clear message: industrial blackmail is a two-way street.
Meanwhile, China is accelerating its “dual circulation” model—increasing domestic consumption and minimizing reliance on foreign markets—while expanding its BRICS+, RCEP, and Belt & Road trade spheres, laying the groundwork for a parallel economic order.
In the background, cyber operations and digital disruption are being used to test Western financial infrastructure. The battlefield of the 21st century isn’t just kinetic—it’s code.
First Casualties: Trade-Based Economies Like Singapore
Nowhere is this disruption more acute than in small, trade-dependent economies like Singapore, South Korea, and the UAE.
Singapore, built on the back of globalization and open sea lanes, is already feeling the tremors. Its GDP forecasts have been slashed. Port traffic has dropped as shipping demand withers under fractured supply chains. Financial intermediation, one of its core strengths, is under threat from rising geopolitical risk and Western financial weaponization.
The global free trade system created after WWII is collapsing. Countries that once thrived on neutrality, openness, and logistics supremacy are now exposed and vulnerable. In this new world, survival depends not on efficiency but on alliances, control, and sovereignty.
This is no longer just an economic crisis.
This is the prelude to World War III.
War-Gaming the Scenario: Timeline to Catastrophe
Phase 1: The Trigger (2024–2025)
- The US implements “reverse tariffs,” subsidizing exports to outcompete rivals globally.
- China retaliates with rare earth and semiconductor export restrictions.
- The EU hits back with tariffs on American tech, escalating the Atlantic trade war.
- The WTO collapses as major powers openly defy its rulings.
Phase 2: Economic Warfare (2026–2027)
- “Friend-shoring” becomes the new trade doctrine. Countries trade only with trusted allies.
- India is forced to pick sides, restricting pharma and agri-exports to preserve strategic autonomy.
- Russia weaponizes gas again, plunging Europe into another energy shock.
- Cyberattacks hit global stock exchanges, sowing financial chaos.
Phase 3: Military Posturing (2028–2029)
- US-China tensions explode in the South China Sea. China declares an ADIZ over the Taiwan Strait.
- India-China border simmers.
- Germany re-militarizes, Japan debates nukes, and Saudi Arabia signs a pact with China.
- Naval clash in the Spratlys—a Chinese warship rams a US frigate. Both sides escalate.
Phase 4: The Spark (2030)
- Taiwan declares independence. China blockades the island.
- US and Japan respond. Missiles fly.
- India faces a two-front threat—Pakistan escalates in Kashmir, and China pressures the northeast.
- Russia moves into the Baltics. NATO intervenes.
- Nuclear posturing begins. World leaders go underground.
By 2031, the world is at war.
Net Assessment: Why This Ends In War
- Economic desperation leads to military adventurism. History is replete with examples—Germany in the 1930s, Japan in the 1940s, Russia today.
- Alliance systems are rigid. One spark in Taiwan or the Baltics will drag half the planet into the conflict.
- Trade wars lack deterrents. There is no MAD (Mutual Assured Destruction) equivalent in trade; escalation feels manageable until it is not.
Markers to Watch
- WTO formally declared dysfunctional by major powers.
- China stockpiling food, oil, and minerals beyond strategic reserves—signs of preparing for a long economic decoupling.
- The US passes the “Economic National Security Act,” penalizing trade with adversarial nations and enforcing reverse tariffs.
- India signs a formal military pact—with either the US or Russia—signaling a definitive end to non-alignment.
- Taiwan holds an independence referendum, triggering China’s red line.
What Must India Do?
Economic Measures
- Diversify trade partners and reduce dependency.
Fast-track FTAs with Africa, ASEAN, and Latin America. Minimize import reliance on China in electronics, pharma, and chemicals.
- Build national reserves.
Create a 12-month buffer in grain, medicine, and oil. Invest in foreign farmland and overseas warehousing in friendly nations.
- Move toward a rupee-based trade ecosystem.
Expand currency swap agreements and UPI-backed digital settlement with partners to bypass dollar weaponization.
Military Preparations
- Cap defense imports at 30%. Accelerate the production of Tejas Mk2, AMCA, drones, missiles, and naval platforms.
- Develop cyber and space command capabilities. Prepare for satellite jamming, cyber sabotage, and drone swarms.
- Operationalize the two-front war doctrine.
Integrate theatre commands. Preposition war reserves in Ladakh, Northeast, and Andaman-Nicobar. Train for hybrid and asymmetric warfare.
Diplomatic Moves
- Stay non-aligned but agile.
Maintain freedom of maneuver—support QUAD and I2U2, but avoid entangling alliances like NATO.
- Lead the Global South.
Act as a moral and economic anchor for developing nations facing the fallout of great power conflict. Offer vaccine diplomacy, digital infrastructure, and debt assistance.
- Modernize deterrence doctrine.
Update India’s nuclear and space policies for a new age of multi-domain war.
Final Warning—And A Call For Leadership
The world is sleepwalking into a catastrophe. The institutions we relied on have failed. The agreements that kept peace are crumbling.
But history is not destiny. There is still a path—not to war but to preparedness, partnership, and peace.
India has the unique potential to stabilize the world—the bridge between East and West, the voice of the Global South, and a beacon of responsible power. But to lead, we must prepare now.
The storm is coming.
Only the ready will survive.
Only the wise will lead.
Group Captain MJ Augustine Vinod (Retd)
Defence Analyst | Strategic Affairs Expert
“In war, there is no prize for the runner-up.”
—Gen. Omar Bradley
- IAF Group Capt MJ Augustine Vinod VSM (R) is COO, AutoMicroUAS. The views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect the EurAsian Times’ views.
- He tweets at @mjavinod
