## Editor’s Letter

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**Canonical URL:** [Editor’s Letter](https://www.imf.org/-/media/files/publications/fandd/article/2026/06/editors-letter.pdf)

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### Geoeconomics: scope and shift
- 5JUNE 2026
- F&D
- “Resilience matters—but so does restraint.”
- The end of the cold war promised a more peaceful age of international relations, but that vision is under threat as governments increasingly turn to tariffs, sanctions, and export controls to advance national security goals.
- The line between economic and national security policy is blurring; a new era of geoeconomics is taking hold.

### Analytical frameworks and historical context
- Geoeconomics is not new; for most of the world—from Brazil to India to Türkiye—it’s how international business has historically been conducted.
- The world’s largest economy is now engaging in geoeconomic tools, with consequences for everyone.
- Christopher Clayton, Matteo Maggiori, and Jesse Schreger:
  - Show how control of choke points—such as financial infrastructure, technology, or critical commodities—can confer immense power.
  - Warn that overuse of geoeconomic power is self-defeating because it drives other nations to seek alternatives and erodes the very leverage being wielded.
  - Call for policy tools that allow limited intervention to enhance economic security while preserving the benefits of globalization.

### Costs, benefits, and policy trade-offs
- Jeffry Frieden: economic coercion takes a toll on efficiency, innovation, credibility, and domestic cohesion.
- Kim Ruhl: enhancing geoeconomic resilience is essential, even if it means reduced efficiency; the US must adopt tariffs, sanctions, and industrial strategies as tools of economic statecraft when grappling with nonmarket actions by adversaries.
- Common theme: Resilience matters—but so does restraint.
  - Excessive dependence is a vulnerability.
  - Excessive fragmentation jeopardizes the immense economic benefits that flow from cooperation.
  - The challenge is to strike a balance—diversifying and cooperating where possible, and preserving institutions that make power predictable rather than arbitrary.

### Implications for middle powers and regions
- Gedion Timothewos (Ethiopia’s foreign minister): Sub-Saharan African countries face declining aid and a crumbling multilateral peace architecture, but there are opportunities for leverage in the global race for Africa’s critical minerals.
- N. K. Singh: Middle powers such as India can shape the emerging order by building issue-based coalitions.
- Beatrice Weder di Mauro: Europe should stop thinking of itself as a middle power and start acting like a great power in proportion to its economic heft.

### Rethinking cooperation and institutions
- Aaditya Mattoo, Michele Ruta, and Robert Staiger: Geopolitical competition need not end trade cooperation, but it requires rethinking the rules.
  - The multilateral system must make room for geopolitical rivalry while avoiding disruptive trade wars and protecting neutral countries.
- Maintaining a shared commitment to rules is portrayed as essential to keeping the world economy connected.

### Editorial conclusion
- Geoeconomics describes a shift in how nations pursue security, growth, and influence in a more contested world; it is likely not a passing phase.
- Economic thinking must evolve with real-world experience and account for these forces as policymakers navigate an increasingly volatile world.
- The issue aims to stimulate fresh thinking, reflection, and further debate.

*F&D, 5JUNE 2026. Gita Bhatt, editor-in-chief.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2026/06/editors-letter.pdf_