A Summer of Wars Threatens to Boil Over

Israel and Hezbollah may avoid war. But if not, a conflict between them could unleash a wider, regional war in the Middle East with no limits.

If it comes to the worst, the Israel-Hezbollah flare-up may be just one of several wars that begin over the coming summer months. As multiple flashpoints reach or cross the point of no return, the world is moving into uncharted waters.

In Asia, China and the Philippines are going head-to-head in the South China Sea. Chinese coast guard vessels have rammed and damaged Filipino fishing boats. This may seem like a local matter, but the president of the Philippines, Ferdinand Marcos Jr, has warned he could invoke his country’s mutual defense treaty with the U.S. if any Filipino national is killed, forcing the U.S. to defend the Philippines.

In Europe, the president of Serbia is warning that a third world war is imminent as the conflict over Ukraine enters a new phase. Nuclear weapons are once again moving in the continent. Russia said it has stationed nuclear weapons in Belarus, and NATO is considering taking more of its arsenal out of storage. France is proposing that its nukes be used as part of Europe’s broader defense strategy, potentially placing French nuclear weapons in allied nations.

It isn’t just physical wars that threaten to boil over in the summer heat. 

The European Union is moving to impose new tariffs on China-made electric vehicles. The levy on some imports will rise to almost 50%, setting off alarm bells as Beijing warns of a trade war with Brussels. 

 The International Criminal Court potentially labeling some Russian cyber attacks on Ukraine as “war crimes,” could also represent a new kind of showdown between nations around institutions.

For years, the world sought to avoid war, putting economics and development ahead of geopolitics. Now geopolitics trump everything. Multiple conflicts are snowballing, drawing in global powers, and threatening global stability amid a tenuous economic backdrop.

The global economy is cooling. The International Monetary Fund warns that global public debt is nearing 99% of global GDP. Many capitals are fatigued and their treasuries exhausted by the current crises, making them ill-equipped and ill-prepared for new economic pressures fueled by surprise wars.

Countries like the United Arab Emirates and Saudi Arabia, which have served as stable, bright-spots amid a volatile, dim backdrop, now face their own strains, as geopolitics cross their borders, and begin to squeeze them into taking action. These nations are no longer able to guarantee neutrality, creating a world with no “safe zones.”

Behind all of this are the ambitions of select nations, like China or North Korea, who view the potential of new wars breaking out as a possible opportunity. They could stand to benefit from their adversaries being overstretched (and overexposed), like the U.S., as they may believe their moment has arrived to take action like invading a sovereign democracy.

A summer of wars will move the world into a new environment, forcing global stakeholders to rethink strategies.

To start, investors may find that once safe strategies now need to be viewed through a geopolitics lens. Economic, technological, and  territorial conflicts can arise quickly and affect more than just the parties at odds. For example, Indonesia recently announced new tariffs up to 200% on cheap Chinese imports in an effort to protect Indonesian companies from the effects of the U.S.-China trade war.

Then, there are wartime strategies, like stockpiling goods, which could disrupt the global economy. Norway, for example, is stockpiling over 30,000 tons of grain by the end of 2025. As more wars begin, a global resource competition could follow, causing demand for critical resources to outstrip supply. The entire resource world, from exporters to refiners to shippers, may face pressures to behave differently as capitals are besieged by geopolitical paranoia.

Multinationals will also be forced to acclimate to the new geopolitical climate. That may mean forging strategic relationships, as in the case of G42, an Emirati AI firm that received a $1.5 billion investment from Microsoft as part of a U.S.-government-based deal. It could also mean  following the path of AstraZeneca, the U.K., pharmaceutical company which has built a separate Chinese supply chain amid U.S.-China tensions. Wars will force every business to become flexible in dealing with the constant flow of disruption.

Whatever goals nations have set, from development to growth, risk being held captive by the burgeoning wars. This requires governments to take new action. If nations continue to put their own interests ahead of the world’s, chaos and destruction loom. 

It is up to nations then, small and large, to create a new coalition who reject war, in all its forms, and seek a new international framework where peaceful coexistence is possible, even with friction and divergence.

However, those eyeing stability and security should be warned. The taboo on war is as weak as it has ever been. This is not a paradigm shift. This is a metamorphosis. It represents an irreversible change in the architecture of the world, and in the fates of those who have global interests.