Trading is war again

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Outside of the economics of organized crime and gangster films, commerce and violence rarely go hand in hand. In many ways, however, the current phase of international trade is a historical anomaly. Doing business “with a gun on their shoulder” was the daily life of most merchants in recent centuries, who left areas protected by local political power in caravans across the lands or by ship across the seas. They obviously did not carry these weapons to direct them against their trading partners. But most often, they had to protect themselves if necessary by the force of third parties, competitors, potentates, corsairs, brigands and other ransomers. In doing so, they “insured” their journey against risks that could no longer be insured otherwise.

The sea has never been calm

When Marco Polo tells the story of the Silk Roads, he talks about his misfortunes and the violence of the journey. He already talks about Hormuz, land and sea routes, power games and the risks taken by merchants and missionaries to travel the Old World. It was to circumvent the problem of the dangers of trade by land and the political blockages along the way that the Portuguese and Spanish embarked on the maritime adventure by circumnavigating Africa then towards the west, into the unknown.

The sea was then free for those who ventured there but it was not without dangers. It was the domain of anarchy in the first sense of the term. The principle which then prevailed was summarized by the formulano peace beyond the linewhich we find in a more polite manner in the Franco-Spanish treaty of Cateau-Cambrésis of 1559: “West of the prime meridian and south of the Tropic of Cancer […] violence exercised by one of the parties on the other will not be regarded as an infringement of the treaties.”

For centuries, it was therefore normal and even essential for a merchant ship to be armed. It was the era of corsairs, these captains who, on a mandate given by their sovereigns in a “letter of marque”, led a form of indirect warfare on the waters of the globe, consisting of destabilizing the logistics of an enemy power on the high seas by attacking its merchant navy. In the literal sense, it constitutes the violent beginnings of the trade war. Moreover, if we use in French the term “war of course” to designate the action of the corsairs, the German speaks more literally of trade war and the English of commerce raiding.  

The world of Suez

This period lasted until 1856. On this date, in Paris, after the Crimean War, the European powers adopted a formalized version of the way of life concluded two years earlier between France and the United Kingdom which announced the end of the war of racing, letters of marque and privateers.

The positive development of the Franco-British relationship had a lot to do with this first attempt at “technical” organization of the world. Freedom of navigation in safety became a cardinal principle of the planetary arrangement that the navies of the two Western countries were keen to enforce. As voyaging warfare was abolished, arming a merchant ship became useless and even suspect. Apart from armed conflicts which resulted in the flagging of their ships, shipowners are gradually undertaking to renounce this practice. To protect them against possible non-state violence, they can now count on “third-party guarantors”: the European navies, first and foremost the Royal Navy.

The movement for free and safe seas was launched. It is no coincidence that it was a year later, in 1857, that the Danish toll on the Oresund Strait, which made it possible to control access to the Baltic Sea, was abolished. For more than four centuries, the Danes managed to impose a duty of passage of 1 to 2% of the value of cargo on the thousands of ships passing their coasts. This is a tax rate similar to that requested today by Iran to allow oil tankers to pass through Hormuz in 2026, or around 1 dollar per barrel, a little more than 1% at the current price of crude. When it was abolished, the “right of the Sund” still represented one-eighth of the Danish crown’s revenue, but it was seen by other nations for what it was: a simple racket, in that the Danes provided no services – any more than Iran did. Hormuz.Â

The turning point had been taken. From that moment on, we begin to consider that it is normal to be able to sail freely and safely in international waters, including across a strait, whatever your flag. Paradoxically, the commissioning of the Suez Canal in 1869 undoubtedly contributed to accentuating this perception: by building a costly infrastructure which had to be maintained via significant but perfectly justified rights of passage, we highlighted by contrast the scandalous and disproportionate nature of tolls in the straits without associated service.

Protecting the Atlantic

Beyond the symbolic date of 1856, it took a century, some failures, setbacks and two world conflicts for the global commercial system to be organized and fully pacified.

Between the end of the “first globalization” in 1914 and its re-foundation at Bretton Woods in 1944, instability in fact presided over a retreat into empires and their protectionist trade, monetary chaos and the cessation of the marketing of certain resources. This situation resulted in what Cordell Hull, the American Secretary of State from 1933 to 1944, summed up as follows: “When goods no longer cross borders, armies do.” This liberal and commercial analysis of the global crisis of course paid little attention to the profound nature of ideologies, but it precisely pointed to the organization of safe, predictable, insurable and effective international trade as an essential instrument for peaceful international relations. To do this, it was necessary that, on the seas at least, freedom and security be the rule and violence the exception. It was necessary to mark the end of an old European debate on the appropriation of maritime spaces and finally prove Hugo Grotius against John Selden right: it would be a “Mare liberum” and not “Mare clausum”.

This is the role played by the Atlantic Charter, a true “road map for the organization of the world” which, on August 14, 1941, established freedom of navigation as one of the cardinal principles to be established after the victory against Nazism, equality with the intangibility of borders, the self-determination of peoples, social security, the stability of currencies or the organization of collective security.

This freedom having to be able to be ensured in security, anarchic non-state violence on the seas is declining, the acceptance of the right of free and harmless passage even in territorial waters and straits is becoming universal and, overhanging, the presence of l’US Navy on all the seas of the globe enforces it. In 1981, for example, the United States initiated a confrontation with Colonel Gaddafi’s Libya to oppose his claims to “nationalize” the Gulf of Sirte and operated its aircraft carriers in the contested area. In 1995, during the Straits Crisis, the US Navy transited between mainland China and Taiwan. It also continues to do so regularly, like other European navies. We can also read in this light the mobilization of several navies in a series of operations to fight against piracy in the Horn of Africa.

This maintenance of security on the seas through the commitment of “third party guarantors” had the consequence of allowing the development of “flags of convenience”. For centuries, flying the merchant flag of a large country was not a luxury for shipowners but a necessity. A ship carrying the Red Ensign British could count, beyond its own weapons, on the guarantee that an attack against it would lead to the response of warships beating the White Ensignthe English navy then not necessarily responding to attacks on other flags. By offering the world unrequited freedom of navigation, putting an end to private voyaging warfare, and responding to requests for assistance at sea from all ships, Western navies have been a powerful means of organizing international trade without ever collecting a protection tax.

Of course, it was in the well-understood interest of Western countries, and first of all, of the American hegemon. L’US Navy was one of the pillars of globalization which made it possible to remove from the field of trade most of the extreme risks, impossible to insure, which made possible the construction of common standards, the establishment of arbitration and the proper functioning of trade, without gold or gun on the shoulder, thanks to technical compatibility and trust financial.Â

This system has also made it possible to reduce the share of transport in the cost of goods to be exchanged, to the point that today it only represents a few percent of the final price. Most global trade would indeed be unaffordable if maritime transport was still charged at 16th century prices. With the post-1945 system, actuaries were able to give prices to residual risks and insurers to cover them. The link between a country’s GDP and the development of insurance is well documented: being able to insure oneself allows one to consider taking economic risks without jeopardizing what is acquired and without having to “self-insure”, which is always more costly.

The sea without a net

This system is based on the disappearance of risks that are impossible to insure financially and therefore on the existence of a third party guarantor to take care of these extremes. When impossible-to-insure risks return, this order is derailed. This is partly the case for all potential disasters linked to climate change, which threaten the very foundations of insurance. This is also the case at sea for other, much more political, reasons.

The phenomenon of the return of impossible-to-insure risks was observed from February 2022 in the Black Sea: as soon as the possible presence of naval mines was communicated, shipowners deserted Ukrainian waters even if no blockade had been imposed. was proclaimed. Off the coast of Hormuz, from March 1, 2026, the day after the Israeli-American offensive on Iran, the pattern was repeated.

In conditions where insurers are unable to do their job, shipowners leave not because the risk is too high but because it has become too extreme and unpredictable to be financially insurable. However, we are clearly arriving at a situation where Western navies are no longer physically capable of “respecting” freedom of navigation and restoring it, if necessary, by force.

In the United States, political power no longer has the will to “voluntarily” employ the American navy by force; this turnaround also arrives at the moment when theUS Navy is confronted with the limits of what it can accomplish in the face of the development of the military capabilities of the disruptors. The Trump administration’s exchanges on Signal which leaked during the Bab el Mandeb crises were very clear: Washington no longer sees this role as a mission corresponding to its interest and the Europeans are no longer capable of it alone. As Vice-President JD Vance summed up bluntly in one of the messages from these leaks: “3% of American trade passes through the Suez Canal. 40% of European trade as well. There is a real risk that the public will not understand this or why it is necessary.” Beyond the tour de force that constitutes the exit of almost the entire French naval action force around the aircraft carrier Charles de Gaulle, France and its allies would be incapable of reestablishing freedom of navigation in Hormuz alone, by force.

China: from engineering state to corsair state

Interestingly, China doesn’t want to do that either.

While its current prosperity relies largely on safe, efficient and free maritime trade, Beijing has never shown much interest in freedom of navigation. Since its dizzying industrialization, it mainly exports its products to its customers by sea. China produces more than half of the world’s steel, largely from Australian or South American iron ore and coking coal… Yet whenever a crisis has arisen – such as when the Houthis struck in the Red Sea – it has consistently refused to join international operations to protect maritime trade, preferring negotiate alone, for his sole benefit, the passage of ships that were important to him. The rise in power of China – which, at sea, takes on a spectacular dimension – therefore does not seem to be accompanied by a role of hegemon caring“trusted third party” of a globalization from which it benefits.

In fact, Chinese practice more closely resembles that of European countries before 1856 than that of the United States in the 20th century: protection of its own flag, tendencies towards the appropriation of maritime spaces and a relative lack of complexity in the face of “privateering” maneuvers on the part of of ships operating under the civil flag but in direct contact with the State.

Trade has become dangerous again

If American and Chinese behavior persists and European weakness continues, it will not be the end of world trade.

But new existential questions will emerge for maritime freight players. Is it absolutely necessary to take the American flag to be protected? Is the French navy still capable of guaranteeing movement for Europeans? Should we create a “pan-European merchant flag” entrusted to a fictitious “28th state” to benefit from the common reassurance of all our navies? Should we go back to “before 1856” and arm all merchant ships defensively?

If today we are not having to answer these questions with dizzying implications in terms of responsibility, crew loyalty, rules of engagement and self-defense, the trends are there and are becoming more and more serious.

What is happening at sea is no exception. The moment we are experiencing marks the return of a powerful mercantilist ideology which considers that the world is a zero-sum game in which cooperation is less interesting than confrontation. The trend is towards the appropriation of the common structures which have governed the smooth functioning of globalization and their weaponization by the powers which can claim to control them – from SWIFT to Logink via Hormuz, wheat, gas, oil, rare earths, the dollar, electronic chips and submarine cables…

But while global interdependencies are colossal, withdrawal can only be an option for the largest empires. For everyone else, we will once again have to find a way to navigate, literally, through troubled and dangerous waters, to deal with increased violence in common spaces, hostile behavior and attempted racketeering.

We will once again have to get around problems when possible but also accept that certain risks can no longer be reliably insured by financial means and that, to continue trading, we must carry our rifle on our shoulder. In this new era, which very much resembles the not-so-distant past, Europeans should put their unique experience to good use.