Will Today's Global Trade Wars Lead To World War III?

The splintering of international economic interdependence is a worrying sign for peace through trade.

- Daniel W. Drezner

You might not know about a minor trade skirmish in the Balkans that started late last year. But you should, because it signals a worrying shift in how national security considerations are altering the fabric of globalization in ways eerily similar to how they did at the dawn of the 20th century. That first shift helped start World War I, so in case you’re wondering, yes, I’m going there: The current rise in protectionism could be the precursor to World War III.

The story starts in 2008, when the small southeast European nation of Kosovo unilaterally declared independence from Serbia after nearly a century of being bound to its larger neighbor, followed by a war for secession that ended only after NATO intervened. The Serbian government refused to recognize the breakaway province and, as part of this diplomatic position, late last year successfully pressured members of Interpol to not admit its former territory as a member.

In response, Kosovo decided to impose a 10 percent tariff on Serbian imports. As the dispute escalated, it raised the tariff rate to 100 percent, even though Serbia is the country’s most important trading partner. Both the United States and the European Union pressed Kosovo to drop the tariffs and negotiate a reduction in tensions. Instead, its government widened the levies to include Bosnia and Herzegovina, since that country also does not recognize Kosovo’s independence.