🌍 Hedging Is the New Normal

We are living in a new world of hedgers. The shocks of the last several years—COVID-19, Russia’s war in Ukraine, U.S. President Donald Trump’s tariffs, and the Iran conflict—have upended how nations approach international affairs. The smooth flows of a globalized and rules-based world have clotted into uncertainty, forcing states to find new pathways for trade, diplomacy, resource extraction, and defense cooperation. Countries no longer consider historical partnerships, values-driven alliances, and regional blocs to be sufficient to protect and advance national interests.

Hedging is the practice of avoiding exclusive dependence in a world of unreliable partners. It involves cultivating competing relationships across different domains so that no crisis or betrayal will leave a state out of options. In decades past, states tended to hedge their bets in specific circumstances. India, for example, emerged from colonization as a nonaligned nation but hedged amid China’s rapid growth to build ties with the United States—even as it maintained warm relations with Russia. Now, this is not just a tactic limited to emerging powers or a response to particular geopolitical shake-ups. Hedging has become central to international relations, shaping how powers great and small approach trade, technology, finance, energy, and security.

States are no longer hedging within a system that is episodically volatile but out of a recognition that there no longer is much of a system at all. The rise of what we might call “hedgemony” is both a response to the reshuffling of the global order and an accelerant of this transformation. Although these moves are being pursued by individual governments in search of stability and security, the net result may be a world that is less predictable and even more dangerous.

Twenty-five years ago, globalization was embraced as almost a panacea. Deeper integration across borders was expected to make the world richer, more cohesive, and more humane. U.S. President Bill Clinton encapsulated the vision in his 2000 State of the Union address, when he argued that “open markets and rule-based trade are the best engines we know of for raising living standards, reducing global poverty and environmental destruction, and assuring the free flow of ideas.”

That conviction shaped an era of free trade agreements and global value chains: Companies shifted manufacturing to lower-cost jurisdictions and sourced inputs from wherever they came cheapest. Products designed in one country used components from others, were assembled elsewhere, and eventually funneled for shipping through centralized hubs to markets worldwide. That model bore cheap goods and global economic growth, but it also scattered the seeds of future fragility. The 2008 financial crisis was an early warning that globalization carried the risk of cross-regional contagion.

Interdependence was not easily undone. By the eve of its 2022 invasion of Ukraine, Russia was supplying around 40 percent of the European Union’s pipeline gas imports. China still refines roughly 70 percent of the world’s supplies of 19 of the 20 most important strategic minerals—though the United States and other Western nations are fervently trying to change this amid intensifying U.S.-China competition and Beijing’s periodic throttling of critical mineral exports.

Now that the spell of innocuous interdependence has been broken, nations are moving with grim resolve to foster diversified, even redundant, dependencies. Countries are increasingly hedging their bets with hegemons—namely, by seeking strong ties with both China and the United States—while also striving to lessen hegemonic dependency through greater self-sufficiency and diversified relationships. Even the superpowers are hedging: The Biden administration’s CHIPS and Science Act and Trump’s Pax Silica both sought to reduce reliance on China and, by association, Taiwan;

🔗 https://foreignpolicy.com/2026/04/29/hedging-strategy-geopolitics-international-affairs-global-order/