The new imperialism

How the AI age is remaking great power competition

Photo by Markus Spiske on Unsplash

By Allan C. Stam

In the first week of January 2026, the United States did something it had not done since the Cold War: It invaded a sovereign nation in the Western Hemisphere and deposed its government. On January 3, Operation Absolute Resolve captured Venezuelan President Nicolás Maduro in a pre-dawn raid. President Donald Trump announced that the United States would “run” Venezuela and “rebuild the oil infrastructure.” The same week, Secretary of State Marco Rubio confirmed that the administration seeks to purchase Greenland from Denmark—and when pressed on the potential use of military force, the White House declined to rule it out. Seven European leaders declared that “Greenland belongs to its people.” Danish Prime Minister Mette Frederiksen warned an attack would mean “the end of NATO.”

Venezuela. Greenland. These are not isolated events. They reveal a coherent strategic logic: the return of imperialism to great-power competition, driven by the material demands of the artificial intelligence economy and the imperatives of managing America’s relative decline.

The new mercantilism

The 19th Century offers a familiar template. Great powers scrambled for colonies because mercantilism taught that wealth was zero-sum, trade partners could not be trusted, and territorial ownership was the only guarantee of supply. Mercantilism created the world it claimed merely to describe—and ultimately produced two world wars.

But the 21^st-Century version is different. Today’s neo-mercantilism is about supply chain vulnerability—the exposure of advanced economies to disruption of the complex chains that produce semiconductors, batteries, defense systems, and AI infrastructure.

Consider what makes high-tech economies uniquely fragile. A modern semiconductor requires thousands of inputs from dozens of countries, processed through facilities that took decades to build. A single missing component—a rare earth element, a specialized chemical, a precision tool—can halt production entirely. Unlike wheat or oil, many inputs have no ready substitutes. And processing is far more concentrated than mining: China controls roughly 60 percent of global rare earth extraction, but over 90 percent of processing capacity.

China built this position deliberately through sustained industrial policy, state subsidies, and tolerance for environmental costs. Beijing constructed chokepoints across critical supply chains: rare earth processing, lithium battery production, solar panel manufacturing, and pharmaceutical precursors. This was a strategy, not an accident.

From Beijing’s perspective, this looks different. Chinese strategists note that the United States “weaponized interdependence” first—using control of the SWIFT financial messaging network and the dollar to sanction adversaries, restrict Huawei’s access to semiconductors, and block technology transfers. The “liberal order,” in this view, always served American interests; China simply learned to play the same game with its own advantages.

There is truth in this. But whoever started it, the vulnerability is real. When Beijing announced sweeping export controls on rare earth elements in October 2025—banning supply to American defense contractors and reaching extraterritorially to cover any product incorporating Chinese inputs—a former White House advisor observed that China had “crafted a policy that gives it the power to forbid any country on Earth from participating in the modern economy.”

The rare earths embargo was a shock to the system—a crystallizing moment that reframed two decades of Chinese activity in the Western Hemisphere. China’s Belt and Road Initiative has been making inroads into Latin America since the mid-2000s, financing ports, railways, and mining operations from Venezuela to Argentina. This was tolerable when it appeared to be ordinary economic competition. The embargo revealed it as something else: the construction of leverage that could be activated at will. Suddenly, Chinese infrastructure investment looked less like commerce and more like strategic positioning.

Could markets solve this? In theory, high prices should incentivize new supply, diversification, recycling, and substitution. But markets optimize for efficiency, not resilience. Building alternative processing capacity takes a decade or more. Some chokepoints reflect geology and physics, not policy choices. And an adversary can disrupt supply chains faster than markets can adjust. For economies whose wealth, security, and technological position depend on uninterrupted access to these inputs, the market solution may arrive too late.

This is why the Trump administration’s response looks increasingly imperial. Not because policymakers are nostalgic for the 19^th Century, but because supply chain vulnerability in high-tech economies creates pressures that liberal frameworks struggle to address. A different administration might respond with different rhetoric and methods. But the underlying pressures would remain.

The question is not just why these pressures exist, but why they caught the foreign policy establishment so unprepared.

The liberal bet and its failure

The architects of the postwar order drew a lesson from the interwar catastrophe: Mercantilism had produced the conditions for war; perhaps liberal institutions could prevent them. The framework rested on three claims: trade is positive-sum, creating mutual gains; interdependence generates shared interests; institutions socialize states into cooperative norms.

This framework informed the decision to welcome China into the World Trade Organization in 2001. The bet was not irrational. It had worked before: Germany and Japan, defeated enemies, had integrated into the liberal order and become peaceful democracies. The framework’s architects reasonably expected China to follow.

The expectations were explicit. President Bill Clinton called China’s accession “the most significant opportunity that we have had to create positive change in China since the 1970s.” Economic integration would create a Chinese middle class. The middle class would demand political liberalization. A democratic China would join what Francis Fukuyama had called “the end of history”—the global convergence on liberal democratic capitalism as the final form of human government.

These were not fringe views. They represented the consensus of the American foreign policy establishment across both parties—and the liberal social scientists who increasingly dominated academic research centers. And they were wrong on every count.

China grew wealthy—GDP increased roughly tenfold between 2001 and 2025—but did not liberalize. As Kurt Campbell and Ely Ratner, two former Obama administration officials, acknowledged in 2018: “The liberal international order has failed to lure or bind China as powerfully as expected.” The U.S. Trade Representative’s office was blunter, declaring that the United States had “erred in supporting China’s entry into the WTO,” given China’s “state-led, mercantilist trade regime.”

What went wrong? The theory’s three claims failed in sequence. Trade did produce mutual gains, but gains can be distributed asymmetrically. China captured the benefits of integration while constructing the chokepoints described above. Interdependence did create shared interests—but also created leverage that could be exploited. And institutions did not socialize China; China learned to game institutions, exploiting WTO rules while building alternatives like the Asian Infrastructure Investment Bank and the Belt and Road Initiative.

But the deepest failure was philosophical. The expectation that prosperity would produce demands for liberal democracy rested on a claim about universal human nature: that all people, once educated and materially secure, would demand recognition as autonomous individuals with rights against the state. This has been the foundational assumption of Western liberalism since the Enlightenment—that individual autonomy is the highest political value, and that the desire for it is hardwired into human nature.

The assumption turned out to be culturally parochial rather than universal. Alternative philosophical traditions do not place individual autonomy at the center of human flourishing. Confucian thought emphasizes relationships, harmony, duty to family and community, and the cultivation of virtue within hierarchical social roles. The highest value is not the autonomous individual but the flourishing community. The Chinese middle class may not experience their political system as oppression from which they secretly long to escape. They may genuinely value stability, order, and collective prosperity—not because they have been brainwashed, but because their civilization has developed a different, internally coherent conception of what makes life worth living.

This is a difficult conclusion for those of us shaped by liberal commitments. But the failure of convergence theory does not reveal Chinese backwardness. It reveals the limits of liberal universalism—and forces a reckoning with assumptions we had mistaken for self-evident truths.

The new raw materials

Every technological revolution creates new resource dependencies. The steam age required coal. The automobile age required oil. The AI age requires rare earths, copper, lithium, and vast amounts of energy.

Copper has emerged as perhaps the most critical constraint. S&P Global projects demand rising by 50 percent by 2040, driven by data centers and electrification. Analysts forecast deficits emerging as early as 2025.

The Western Hemisphere contains substantial reserves of every resource critical to the AI economy. Copper in Chile and Peru. Lithium in Argentina, Chile, and Bolivia. Oil in Venezuela. A secure hemispheric supply chain would reduce American vulnerability to Chinese leverage. This is the material basis for the Monroe Doctrine’s revival.

Greenland and Venezuela: The new imperial logic

If you want to understand the new imperialism in its purest form, look to Greenland. The world’s largest island combines both drivers of territorial competition: strategic materials and geographic position.

Greenland holds an estimated 1.5 million metric tons of rare earth reserves—rivaling American reserves. National Security Advisor Michael Waltz stated plainly: “This is about critical minerals. This is about natural resources.”

But Greenland’s value extends beyond minerals. Climate change is transforming the Arctic into a zone of great-power competition. In September 2025, China launched its first regular container service through the Arctic—the “Polar Silk Road.” Russia has refurbished more than 50 Soviet-era Arctic bases. Greenland sits astride critical passages linking the Arctic to the Atlantic.

Venezuela follows similar logic. The country holds the world’s largest proven oil reserves. Trump has been explicit: The United States will “rebuild the oil infrastructure” and “be in charge of it.”

But the hemisphere cannot simply be taken. Resource nationalism is rising. Mexico nationalized lithium in April 2022, declaring it “property of the nation.” Chile is expanding state control. China has invested heavily via the Belt and Road Initiative. Countries can play Washington against Beijing. The great-power scramble will be contested by the populations whose lands contain what the powers seek.

Material vulnerabilities explain the drive for resource security. But hemispheric consolidation addresses a second problem: the risk of great-power war. China has reached parity. The rare earths embargo demonstrated Beijing’s economic leverage; DeepSeek, the Chinese open-source model that matched American AI capabilities, signaled that American technological superiority could no longer be assumed. What looks like retreat may prove to be risk management—securing critical supply chains while conceding East Asia rather than contesting it at catastrophic cost. The strategy trades global systemic risk for regional risks.

Avoiding the Thucydides Trap

The administration’s foreign policy represents a coherent strategic reorientation: retreat to hemispheric dominance as a strategy for avoiding great-power war.

Graham Allison’s “Thucydides Trap” framework identifies the danger: When a rising power threatens to displace a ruling power, war becomes likely. Of 16 historical cases, 12 ended in conflict. The Trump administration appears to have chosen a managed retreat to regional hegemony rather than contesting China everywhere.

This is what the Monroe Doctrine’s revival signals. To China: The United States will not militarily contest your sphere of influence in East Asia. To Europe: Carry your own security burden. To Latin America: You are in our sphere, whether you prefer it or not. The implicit bargain: China gets East Asia; the United States consolidates the Americas; Europe fends for itself. Whether this can be sustained is uncertain—spheres of influence require clear boundaries, and the ambiguities that make spheres seem manageable are the ambiguities that produce wars.

The Risks

The strategic logic is coherent. That does not mean it is wise.

The liberal order, for all its failures, provided something valuable: a framework for cooperation that made the postwar peace possible. Spheres of influence offer no such framework. They are historically unstable—the 19^th Century balance of power collapsed into World War I. Neo-mercantilist competition spirals: Export controls beget counter-controls, tariffs beget retaliation. Allies may hedge or defect; the Greenland episode signals that resource acquisition may trump alliance solidarity.

Resource strategies face implementation obstacles. Venezuela is in chaos; rebuilding will take years. Greenland’s deposits require a decade of investment—and processing capacity that barely exists outside China. The new imperialism may be rational. But as we have seen with liberalism, rational strategies can fail.

Conclusion

The postwar institutional order rested on assumptions that proved false. Trade was supposed to create shared interests; instead, it created asymmetric vulnerabilities. Interdependence was supposed to guarantee peace; instead, it became a weapon. Institutions were supposed to transform China’s preferences; instead, China learned to exploit them. And the deepest assumption—that all humans naturally desire individual autonomy above all else—turned out to be a Western conviction mistaken for a universal truth.

These assumptions mattered less when structural conditions compensated for their weaknesses. Under American hegemony after 1945, the United States could enforce liberal norms, absorb free-riding, and underwrite the system’s costs. During the Cold War’s bipolarity, ideological competition between liberalism and communism disciplined both blocs and clarified boundaries. But we now inhabit a multipolar world of regional hegemons—China in East Asia, a revanchist Russia claiming its near abroad, the United States retreating to the Western Hemisphere. Europe, unable to cohere into a unified actor, presages security instability rather than regional hegemonic stability. No single power can enforce global rules; no clear ideological divide provides stability. In this environment, the liberal order’s foundational assumptions are exposed as insufficient.

The United States is responding with hemispheric consolidation and a quest for resource security. This is the new imperialism—different in form from its 19^th Century predecessor, but driven by analogous pressures: high-tech economies seeking to escape supply chain dependence.

The shift is tragic but perhaps necessary. The liberal order reflected genuine hopes—and achieved real successes in Europe and Northeast Asia. But those successes occurred under hegemonic conditions that no longer exist. China’s rise has exposed what American power once concealed: that the liberal order’s assumptions were not universal truths but historically contingent achievements.

The new imperialism is not a triumph to be celebrated but an adaptation to realities that idealism obscured. The statesmen of the 19th Century believed they were managing imperial competition successfully—until August 1914. The new imperialism is here. The question is whether to manage it wisely. History offers warnings, not guarantees.

Allan C. Stam is a Miller Center senior fellow and Distinguished University Professor at the University of Virginia. He is the former dean of UVA’s Frank Batten School of Leadership and Public Policy.