Mercantilism 2.0‚ the economic manifestation of multipolarity‚ is streaking across the geostrategic firmament.  The sun has set on globalization‚ the economic manifestation of a unipolar world order reflecting American primacy.  The transition to a new economic order of the emerging multipolar world is occurring against the backdrop of Cold War 2.0 which has been ushered in by the Ukraine — Russia War.  For those thinking in time‚ Feb. 22‚ 2022 will serve as a useful marker of the tectonic shift in the world’s trajectory. In a decoupling scenario‚ the U.S. would cease buying goods and services from China and instead buy the same or comparable goods and services from India. So‚ what is Mercantilism 2.0?  In its simplest form‚ Mercantilism 2.0 is characterized by trading with friendly countries while avoiding and abstaining from commercial intercourse with unfriendly countries that are viewed as actual or potential national security threats. The driving force of Mercantilism 2.0 is national security‚ which is symbolized by the inextricably intertwined trinity of military security‚ political security‚ and economic security.  The unchanging reality of the economic world is scarcity of resources and unequal endowment of such resources‚ so absolute autarky is an impossibility for a state and‚ therefore‚ resource imbalances must be intermediated through trade among states.  In a multipolar world‚ such trade is deliberately fragmented and restricted to a subset of friendly states rather than conducted freely among the universe of all states. The core objective of Mercantilism 2.0 is to forge resilient and secure supply chains binding together a group of countries with converging vital national interests and converging perceptions of the threats to such interests. Accordingly‚ the foundation of Mercantilism 2.0 is economic security within the framework of a symbiotic geostrategic ecosystem. (READ MORE: Biden’s ‘Buy American’ Requirement Will Hurt Domestic Broadband Providers) By contrast‚ the driving force of globalization was comparative advantage‚ not national security.  In the erstwhile unipolar world‚ national security was not the determinant of world trade as no other state had accumulated sufficient power to mount a credible challenge to America’s position as the sole superpower with global reach.  With no threats to its national security on the horizon‚ the United States could focus on nurturing economic prosperity reflecting the logic of comparative advantage‚ i.e.‚ exporting goods and services that the U.S. could produce at a lower economic cost than other countries‚ while importing goods and services which could be produced by other countries at a lower economic cost. The end of globalization does not mean the end of world trade — it simply means the end of world trade based on comparative advantage.  Mercantilism 2.0 heralds the reordering and rearrangement of world trade to reflect a new pattern based on national security considerations. Given the recognition that China is likely to be America’s greatest national security threat for the foreseeable future‚ the U.S. would like to counterbalance China by forging a security partnership with India to address the Middle Kingdom’s ambition to be Asia’s hegemon.  Likewise‚ India increasingly views China as its greatest national security threat for the foreseeable future.  So‚ Mercantilism 2.0 would prompt a recalibration and rebalancing of the trading pattern among China‚ India‚ and the United States reflecting geostrategic priorities. Accordingly‚ the U.S. could shift its imports away from China and instead redirect them to India.  Similarly‚ India could shift its imports away from China and redirect them to the U.S.  For example‚ reflecting comparative advantage‚ in 2022 U.S. imports of goods from China amounted to $536.3 billion‚ while U.S. imports of goods from India amounted to only $85.5 billion. Likewise‚ for the comparable period India’s imports of goods from China amounted to $98.5 billion while India’s imports of goods from the U.S. were $50.2 billion. In a decoupling scenario‚ the U.S. would cease buying goods and services from China and instead buy the same or comparable goods and services from India. Similarly‚ India would cease buying goods and services from China and instead buy the same or comparable goods and services from the U.S.  China’s loss would be gains for India and the U.S. respectively‚ but the total amount of world trade would remain the same. (READ MORE: The US Needs Help for Its China Addiction) Enlisting Mercantilism 2.0 as a Cold War 2.0 instrument to resuscitate U.S. primacy as has been suggested by National Security Advisor Jake Sullivan and Treasury Secretary Janet Yellen is likely to be a detour to a dead end. Ultimately‚ the real challenge for America is to shape the transition from unipolarity and globalization to multipolarity and Mercantilism 2.0 with realism and restraint so that it reflects pragmatic flexibility rather than ideological rigidity. Instead of being part of the problem‚ Mercantilism 2.0 can be part of the solution for a modus vivendi that facilitates a pathway from Mutual Assured Destruction to Mutual Assured Survival. Samir Tata is founder and president of International Political Risk Analytics‚ an advisory firm based in Reston‚ Virginia‚ and author of the book‚ Reflections on Grand Strategy (Palgrave Macmillan‚ 2022).  The post Cold War With China Requires Mercantilism 2.0 appeared first on The American Spectator | USA News and Politics.