A new world order? The geopolitical fallout from Covid-19

By Joe Barnes
Bonner Means Baker Fellow


The Covid-19 pandemic has plunged much of the world into a health and economic crisis. But what effect will it have on geopolitics – roughly, the struggle for power and influence among the world’s great powers?  Will the pandemic be like World War II or the collapse of the Soviet Union, epochal events that profoundly altered the world’s balance of power?  Or will it mark a deadly, impoverishing period that will see an exhausted world return to the geopolitical status quo ante?  Even as countries struggle – more or less successfully – to stem the spread of Covid-19 and the economic devastation it has caused, the global balance among great powers remains critically important not just to those powers themselves but to countries everywhere. This is because conflict and cooperation among influential states shape the economic and security environment that smaller countries must navigate whether they like it or not. The pandemic, of course, has not yet run its course, nor has the economic damage that follows in its wake. But a few very preliminary thoughts are in order.

The geopolitical fallout from the pandemic will depend in large part upon which major geopolitical players emerge strongest in economic terms. Economic power matters. It creates the financial resources necessary to finance a robust military capability and to underwrite economic initiatives. Here the jury is still out. But a number of countries – including the United States and leading EU members – have moved into deep recessions. Efforts to address the economic downturn have led to the massive acquisition of public debt as governments help distressed households and firms. China appears likely to emerge in relatively better economic shape. Moreover, China’s massive foreign currency holdings give it space to fund extensive economic initiatives abroad. Given the ongoing turmoil in energy markets, countries highly dependent upon oil and gas for export earnings and/or government revenue – Russia, Persian Gulf countries and Mexico, to name just a few – may find themselves in particularly dire financial straits. There is an important caveat to this observation. States may be willing to continue to bear substantial costs – particularly in the military arena – despite reduced economic circumstances. Whatever the economic fallout from the pandemic, for instance, the United States is unlikely to cut its defense expenditures dramatically, whether Donald Trump or Joe Biden is elected in the fall.

How governments handle the pandemic and its economic consequences will also shape the future geopolitical landscape. Here the response of the Trump administration – tardy, fitful, often incoherent and prey to the administrative chaos that is one of its hallmarks – is a cause of concern. The administration’s approach to the pandemic is unlikely to create confidence – already much diminished since Trump became president – in the United States’ competence in addressing crises of any sort. But China, too, will not come out of the crisis with its reputation unscathed, as its initial lack of transparency about the onset of Covid-19 has come under extensive (and often well-earned) criticism. Trump has announced that the United States is withdrawing from the World Health Organization (WHO), an astonishing step in the middle of a global pandemic. While he may be responding, however wrongly, to clear shortcomings in the WHO, the move also reflects Trump’s long-documented distaste for international organizations.

It is now a cliché that the Covid-19 pandemic represents a global threat that requires a collective response. In this instance, the cliché is certainly true. Yet the pandemic has, to date, generated trends both toward cooperation and conflict. This would mark an important, if first, step toward ultimate fiscal union among the EU’s member states. Elsewhere, though, the pandemic appears to be increasing rivalry between major powers. This is particularly the case in Chinese-U.S. relations.

These have deteriorated sharply since Trump began his tariff war against China. But Chinese-U.S. relations have been on a downward path since long before Trump took office. This decline derives from the historic change, over recent decades, in the calculus of international power associated with China’s astonishing economic rise and increasingly assertive foreign policy. China is now a major power prepared to challenge the United States for global influence and, on the military front, counter U.S. naval dominance in the Far East.

The pandemic has raised concerns about the dependence of the United States upon Chinese medicines and medical equipment. While Trump’s attacks upon China may be extreme and almost certainly counterproductive, they are echoed in a more general disenchantment with China among foreign policy elites, not just in the United States but also in the EU and elsewhere. This disenchantment is shared by increasing numbers of liberal internationalists here and elsewhere who are repelled by the Chinese government’s treatment of its Muslim minority and its ongoing efforts to undermine what is left of democracy in Hong Kong. A more hardline approach to China is rapidly becoming bipartisan.

Finally, the future geopolitical landscape will also be shaped by the outcome of our election in November. That outcome in turn will be driven, in part, by public perception of the president’s response to the pandemic. Joe Biden will likely attempt a restoration of President Obama’s general approach to foreign policy; we can expect a greater emphasis on cultivating traditional allies and on collective international action. This approach will certainly shape a Biden administration’s approach to Covid-19.

Where does this very provisional analysis leave us? With more questions than answers. But this merely reflects the huge uncertainties associated with the course and impact of the Covid-19 pandemic.  We simply don’t know, at this point, the full scope of the pandemic. Here in the United States, for instance, we have a very imperfect sense of how ongoing, contentious steps by individual states to reopen their economies will ultimately play out. The impact of the current wave of protests and disturbances over the appalling killing of George Floyd – marked by large crowds of protesters in close quarters – is also unknown. Uncertainty also marks the future of the Covid-19 pandemic in European countries as they, too, relax restrictions. Then there is the rest of the world (often forgotten in U.S. media coverage) where the virus is sweeping countries with far fewer medical and financial resources than the United States and Europe.

The bottom line: we should exercise extreme humility in assessing the geopolitical consequences of the Covid-19 pandemic. The world is a very different place than it was six months ago. It will be a very different place six months from now.