Beyond Protectionism: Geopolitical Alignment and the 2025 U.S. Reciprocal Tariff Regime

Abstract Book of the 11th International Conference on Applied Research in Management, Economics and Accounting

Year: 2026

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Beyond Protectionism: Geopolitical Alignment and the 2025 U.S. Reciprocal Tariff Regime

Vivan Shankar

ABSTRACT:

This study investigates whether the 2025 U.S. reciprocal tariff framework is more accurately interpreted as a standard protectionist measure or as an instrument of geopolitical reconfiguration. Drawing on data from 91 trading partners, we develop a Tariff Vulnerability Index (TVI) that integrates measures of tariff exposure, export reliance on the U.S. market, and the extent of U.S. import dependency. Contrary to dominant interpretations, national income level demonstrates no statistically robust association with tariff intensity (t = -1.76, p = 0.082). In contrast, geopolitical alignment accounts for the predominant share of observed variation (F = 16.24, p = 3.25 × 10⁻¹¹), with states embedded in competing supply networks experiencing markedly elevated tariff burdens. China constitutes a structural anomaly, exhibiting a TVI approximately 2.8 times greater than that of the second-most affected nation. These results indicate that the 2025 tariff system functions principally as a mechanism of strategic disengagement rather than as a response to economic vulnerability. We contend that such policy designs pose significant risks to the integrity of global trade architectures by compelling non-aligned economies to affiliate with bloc-based trading systems grounded in geopolitical allegiance.

Keywords: Tariff Incidence, Trade Policy, Geopolitical Decoupling, Reciprocal Tariffs, Tariff Vulnerability Index, Bilateral Trade, Export Dependency, Supply Chain Fragmentation