2024 saw some geopolitical fault lines, including: the prolonging of the Russo-Ukrainian military conflict; the addition of Sweden into NATO; the intensification of the conflict in Palestine; Israeli strikes in Iran and Lebanon; and the fall of Bashar of Al-Assad’s regime in Syria. 2024 also saw Donald J. Trump make a comeback, winning the White House and deepening the anxieties of multilateral organisations, multinational companies, and countries who trade with the United States and China.
With China emerging as a leader in the world order, the unipolarity of U.S. dominance has been replaced with multipolarity, when two or more states have similar power to run the world’s business. This multipolar world is different than the bipolarity that existed during the Cold War period when then balance of power was dominated by the U.S. and the Soviet Union, who were at the centre of military and economic alliances. Bipolarity ceased to exist after more middle powers rose in the mid-1990s. The Stimson Centre, an American think tank, published a paper entitled, “Assumption Testing: Multipolarity is More Dangerous Than Bipolarity for the United States,” that argues that no single country holds unchallenged military and economic power, especially in the last four years. “The U.S. simply does not hold the level of military and economic power it did during the early decades of the Cold War,” the authors write. “Nor does today China match the Soviet Union at its peak.”[i]
How Trade and Security Will be Affected by a New World Order?
In an ideal globalised world, integration can be found in trade, financial, cooperation, and human mobility. A fragmented world, on the other hand, is when all these aspects are disintegrated, or worse – moving backward.
Trade in a globalised world ideally accommodates the free flow of goods and services across country borders. The 9/11 catastrophe changed the security landscape, increasing the scrutiny of people travelling by air, yet trade volume continued to rise until the 2008 recession, when trade stagnated, a phenomenon described as “slowbalisation.” During the first Trump administration (2017-2020), the U.S. announced a 25% tariff on US$250 billion’s worth of Chinese goods, which was later reduced to a 7.5% tariff on US$120 billion worth.[ii] China responded with a 5% tariff on U.S. goods, which it reduced to 2.5% on US$75 billion’s worth when the U.S. reduced its tariff.[iii] China also suspended imports of U.S. cars and car parts, severely hurting the U.S. automobile industry. Trade relations have become more stable between the countries since.
Global trade followed the same pattern as the U.S., increasing in the late 20th century but been slowing since 2008. In the last four years, the Organisation for Economic Co-operation and Development (OECD) reported a consistent decline in global foreign direct investment (FDI), from US$1951 billion in 2021 to US$1579 billion in 2022, and falling further in 2023 to US$1355 billion and in January-June 2024 to US$802 billion.[iv] Optimistic policy makers argue that the COVID-19 pandemic was the most significant reason for such a decrease, however, it is yet to be determined if the descending pattern will continue in the near future.
Human mobilisation was also reversed in the last five years because of the reaction to COVID-19. The practice in most developed economies of prioritising the local workforce over foreign talent will mean a further reduction of human mobilisation in 2025. Technological advancements, however, have allowed for meetings to be conducted virtually, making remote work more acceptable, meaning foreign talent can still work across borders, even if not physically.
U.S.-China strategic competition impacts geopolitical stability, and as the intensity of the competition had deepened between two countries it has affected Taiwan’s relations with China and created divergence between Southeast Asian countries. In 2012, the Association of Southeast Asian Nations (ASEAN) could not present a joint communique on China’s presence into the South China Sea because Cambodia decided not to sign the statement at the very last minute. Some ASEAN countries are closely aligned with China, while others have expressed displeasure at Chinese patrols of the South China Sea. ASEAN is becoming more polarised when it comes to the South China Sea, even as member countries have increased their trade interdependency with China.
In 2025, we could see more adversarial relationships despite the establishment of multilateral organisations. The collapse of the Al-Assad regime has created a power vacuum in Syria, which could be exploited by irresponsible actors who want to reverse stability in the Middle East. The U.S.-China strategic competition will be shaped differently by Trump administration than it was by the Biden administration. The tariff war between Washington and Beijing could be the beginning of a series of economic retaliations between the powers, which could expand to security and military conflicts.
What to Look For in 2025?
Policy makers will watch certain situations – Syria, U.S.-China, and post-ceasefire Palestine – closely in 2025. Those three are in relative positions of calm right now, but they could become drivers of fragmentation if they change. The power vacuum in Syria could lead to intervention by state and non-state actors as happened in Iraq, Libya and Afghanistan. In February and March alone, chaos and civilian death in Syria escalated, causing more disorientation for its people. The U.S.-China Trade War will not only affect Washington and Beijing but have implications for exporting economies like Taiwan, Vietnam, and Malaysia who rely on the trade of semiconductors and electronics. In the Middle East, the Trump administration’s idea of relocating Palestinians to neighbouring countries like Jordan and Egypt has been rejected by those countries. It is still uncertain how the ceasefire in Palestine will turn out. Jordan and Egypt have kept their borders tightly secured, amplifying humanitarian issues inside Palestine.
Based on these developments, it is challenging to measure fragmentation, but it seems that the world is headed in that direction in 2025.
Disclaimer:
The views and opinions expressed in the INSIGHTS publication series are those of the individual contributors and do not necessarily reflect the official policy or position of Rabdan Security & Defense Institute, its affiliated organizations, or any government entity. The content published is intended for informational purposes and reflects the personal perspectives of the authors on various security and defence-related topics.
[i] Ashford, E. and Cooper, E. (2023). Yes, the World is Multipolar And That Isn’t Bad News for the United States, Foreign Policy, https://foreignpolicy.com/2023/10/05/usa-china-multipolar-bipolar-unipolar/
[ii] York, E. (2025). Trump Tariffs: Tracking the Economic Impact of the Trump Trade War, Tax Foundation, https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/#timeline
[iii] Ibid.
[iv] OECD (2024). New OECD FDI Data: Trends, Impacts and Regulations https://www.oecd.org/en/blogs/2024/11/oecd-fdi-data-impacts-regulation.html
