Experts warn geoeconomics is shaping global policy

“The global order is shifting toward a more competitive multipolar system, and the economy is no longer simply a tool for transactions but has become a weapon of power between nations,” Matteo Maggiori, a professor at Stanford University, said Aug. 20 during a lunchtime session of the three-day 2025 World Economists Conference held at COEX in Gangnam, Seoul. He emphasized that geoeconomics is once again emerging as a key topic.

In economics, geoeconomics is the study of power games between nations using the economy as a weapon. Under this framework, economic policy is treated as a tool for national security, placing greater emphasis on state-level strategy than on market logic. A notable example occurred in January when former U.S. President Joe Biden blocked Nippon Steel’s acquisition of U.S. Steel. The deal was rejected because steel is considered a strategic security asset, even though the proposal could have created synergies with allied companies. U.S. President Donald Trump’s tariff wars since taking office are also viewed as reflecting a geoeconomic approach.

Professor Maggiori identified “chokepoints” in key industries such as finance, energy, and manufacturing, where a small number of countries control essential resources. “For example, the United States holds a leading position in financial services, and China in manufacturing, allowing them to exert pressure on other nations,” he said. “We have entered an era in which geoeconomic realities must be considered in government policy design and corporate management strategies alike.”

Jesús Fernández-Villaverde, a professor at the University of Pennsylvania, explained that hegemonic countries have used economic tools to achieve diplomatic and security objectives. “Major powers have strategically employed tariffs, financial sanctions, and resource controls, which can sometimes create a trade-off between economic integration and security,” the professor said. “It is necessary to evaluate the benefits of sanctions against their international costs in a balanced way.”


강우석 기자 wskang@donga.com