German Chancellor warns 'power politics' is reshaping the global order

DAVOS, Switzerland – German Chancellor Friedrich Merz warned Thursday that the rise of "great powers" is dismantling the established global order at "breakneck speed."

Speaking at the World Economic Forum, Merz declared that a new era of "power politics" has begun. He cited Russia’s war in Ukraine, China’s ascent as a global superpower, and the shift in U.S. foreign policy under Donald Trump as primary drivers of this instability.

Merz emphasized that this emerging world is built on strength and force. He urged international leaders to actively shape the future rather than passively accepting the new reality.

His remarks mirrored those of Canadian Prime Minister Mark Carney, who also addressed the intensifying competition between global powers. Merz argued that Europe must respond by bolstering its unity and competitiveness through massive investments in both defense and the economy.

The Chancellor welcomed President Trump’s announcement of a "framework agreement" with NATO regarding Greenland. However, Merz warned that any threat to seize European territory by force remains "unacceptable."

Addressing trade tensions, Merz said any new U.S. tariffs would be met with a European response that is "unified, calm, measured, and tough."

Trump responded by threatening "massive retaliation" if European nations sell off their holdings of U.S. Treasury bonds.

Friedrich Merz’s recent remarks serve as more than a routine diplomatic warning; they represent a stark assessment of a fragmenting global order. For export-oriented nations like Germany, the erosion of the post-Cold War, rules-based system—which provided the stability necessary for global trade—is viewed with deepening alarm in Berlin.

This "new reality" of raw power politics is forcing middle powers to navigate a significantly more volatile and transactional geopolitical landscape. For Vietnam, this shift represents a profound double-edged sword. On one hand, Hanoi has successfully positioned itself as a primary beneficiary of U.S.-China decoupling, capturing critical segments of the global supply chain as firms seek to diversify away from Beijing. On the other hand, the intensifying friction between these two superpowers heightens the risk of Vietnam being forced into a zero-sum strategic choice it has long sought to avoid.

The fraying of traditional alliances, evidenced by Transatlantic tensions over issues ranging from Greenland to unilateral tariffs, serves as a signal that middle powers can no longer take established partnerships for granted. This shift has not escaped the attention of policy planners in Hanoi. While multilateralism and ASEAN centrality remain the pillars of Vietnamese diplomacy, both are facing an unprecedented stress test.

As Merz noted, the era in which nations could rely on the "power of values" or the inherent protection of international law is receding. In this emerging environment, middle powers must prioritize strategic autonomy—strengthening both economic resilience and defense capabilities—to safeguard their national interests. For nations like Vietnam, the message is clear: in a world governed by power rather than precedent, self-reliance is becoming the only reliable currency.

Global volatility fueled by "great power politics" and the threat of trade wars can have a profound indirect impact on the U.S. economy, squeezing small businesses across the Vietnamese-American community. From the nail salon industry to local phở restaurants, these economic shifts are felt deeply at the grassroots level. Furthermore, rising tensions between the U.S., China, and Europe often ignite heated debates within the diaspora—especially in enclaves like Little Saigon—regarding U.S. foreign policy and its implications for security in Southeast Asia. For many, these geopolitical shifts are inextricably linked to the stability of remittances and the future of vital visa categories such as F2B, H-1B, and EB-5.