Sunday Essay 23 | 2026
Trump, Xi, Iran and the Return of Strategic Geography
SUNDAY ESSAYS
5/31/2026
For much of the post–Cold War era, the dominant assumption shaping international politics was that geography mattered less than it once had. Globalisation appeared to weaken the importance of physical distance, strategic location and traditional geopolitical constraints. Goods moved across continents with unprecedented efficiency. Information travelled instantly. Financial capital crossed borders in seconds. Supply chains became so complex and interconnected that many policymakers, investors and business leaders began to assume that economic integration itself would serve as the foundation of long-term stability. The world appeared to be entering an era where technology and markets would increasingly overshadow geography as the primary forces shaping international affairs.
Recent developments suggest that the assumption may have been premature.
This week’s headlines surrounding the Trump–Xi discussions, ongoing negotiations involving Iran and renewed attention on the Strait of Hormuz all point toward the same underlying reality: geography never disappeared. Instead, globalisation temporarily masked its importance. Beneath the digital economy, beneath international finance and beneath the rhetoric of a borderless world, modern societies remained dependent on physical infrastructure, strategic trade routes and geographic chokepoints. As geopolitical tensions rise, those realities are becoming visible once again.
The Strait of Hormuz remains one of the clearest examples. Despite decades of technological progress, a significant portion of global energy supplies still passes through a narrow waterway connecting the Persian Gulf to international markets. Any disruption, whether real or perceived, immediately affects shipping costs, insurance markets, energy prices and investor confidence. The significance of Hormuz is therefore not limited to the Middle East. It influences economies thousands of kilometres away because modern globalisation remains dependent on a surprisingly small number of critical arteries.
What makes the current moment particularly important is that Hormuz is increasingly being viewed not simply as an energy corridor but as a symbol of a broader transformation occurring across the international system. Governments are recognising that many of the systems supporting modern life are concentrated in vulnerable locations. Shipping routes, semiconductor manufacturing hubs, undersea communication cables, power grids and logistics networks all represent potential points of disruption. As a result, strategic geography is returning to the centre of political and economic planning.
This shift helps explain why discussions involving Iran have become increasingly intertwined with wider conversations involving China and the United States. On the surface, these appear to be separate issues. One concerns regional security in the Gulf. Another concerns great-power competition in Asia. Yet in practice, they are deeply connected because they revolve around the same question: who controls, protects or influences the systems upon which global stability depends?
China’s role in this evolving landscape is particularly significant. Beijing remains one of the world’s largest importers of energy and one of the largest beneficiaries of stable global trade routes. Any disruption around Hormuz has direct implications for Chinese economic performance. At the same time, China has spent years investing in alternative trade corridors, infrastructure projects and supply-chain resilience. These efforts increasingly appear less like economic development initiatives and more like long-term geopolitical preparations designed to reduce strategic vulnerability.
The United States is pursuing a similar objective through different means. Washington’s focus on semiconductor restrictions, advanced technology controls and strategic alliances reflects an understanding that economic security and national security have become increasingly intertwined. The goal is no longer simply to maintain military superiority. It is to ensure access to the technologies, infrastructure and supply chains that underpin economic and strategic influence.
The Trump–Xi dialogue reflects this reality. Modern diplomatic negotiations rarely revolve around a single issue. Trade discussions now involve technology. Technology discussions involve security. Security discussions involve energy. Energy discussions involve shipping routes. What once appeared to be separate policy areas are increasingly converging into a single strategic conversation about resilience, vulnerability and influence.
Artificial intelligence provides another example of this transformation. Public discussion often treats AI primarily as a technological revolution, yet governments increasingly view it as critical infrastructure. AI requires semiconductors, data centres, energy supplies and secure communications networks. Control over these systems translates into competitive advantage. As a result, debates surrounding AI are becoming geopolitical debates. The race for technological leadership is simultaneously a race for economic influence, military capability and strategic autonomy.
The same dynamic can be seen in semiconductor supply chains. Taiwan’s importance to the global economy stems not from its size, but from its position within a critical technological ecosystem. Advanced chips are essential for everything from smartphones and automobiles to defence systems and artificial intelligence. Concentrating such production in a limited number of locations creates extraordinary efficiency during stable periods. During unstable periods, however, it creates vulnerability. Governments increasingly recognise this risk and are investing heavily in domestic production capabilities, strategic stockpiles and supply-chain diversification.
What is emerging is a broader shift away from the assumptions that characterised the height of globalisation. For decades, efficiency was considered the highest priority. Companies concentrated production where costs were lowest. Governments encouraged international integration. Redundancy was often viewed as wasteful. Today, that mindset is changing. Resilience is becoming as important as efficiency. Diversification is becoming as important as scale. Security is becoming as important as profitability.
This transformation extends beyond economics. It is reshaping political behaviour as well. Governments are becoming more willing to intervene in markets, support domestic industries and treat infrastructure as a strategic asset rather than a purely commercial one. Industrial policy, once viewed by many as outdated, is experiencing a resurgence. Strategic autonomy has become a central objective across Europe, North America and Asia. Policymakers increasingly assume that future stability cannot be taken for granted.
Europe offers an especially interesting example. The continent remains deeply dependent on international trade and open markets, yet recent years have demonstrated the risks associated with overreliance on external suppliers. Energy disruptions, supply-chain bottlenecks and geopolitical tensions have forced European governments to rethink longstanding assumptions about economic interdependence. Questions that once seemed largely theoretical have become practical concerns. How much dependence is acceptable? Which industries should be protected? What infrastructure is truly critical?
These questions are not limited to Europe. Across the world, governments are reassessing the balance between openness and resilience. The objective is not necessarily to reverse globalisation. Rather, it is to reshape it. The emerging model appears less focused on unrestricted interdependence and more focused on selective interdependence. Countries remain connected, but they increasingly seek to reduce exposure in areas considered strategically sensitive.
This trend creates a paradox. The international system remains deeply interconnected, yet trust within that system is declining. Trade continues to flow. Technology continues to spread. Investment continues to cross borders. At the same time, governments are actively preparing for disruption. They are building alternative supply chains, strengthening domestic capabilities and reducing reliance on external actors wherever possible.
As a result, globalisation is not ending. It is evolving.
The next phase of globalisation is likely to look very different from the previous one. The defining objective may no longer be maximum integration, but rather sustainable integration. Policymakers increasingly recognise that efficiency without resilience can create systemic risk. Concentration without redundancy can create vulnerability. Interdependence without trust can create instability.
The implications extend far beyond governments. Businesses are already adapting. Investors are paying closer attention to geopolitical risk. Supply-chain resilience has become a boardroom priority. Companies are increasingly evaluating political stability, infrastructure security and regulatory environments alongside traditional economic considerations. Strategic geography is becoming relevant not only for diplomats and military planners but also for executives, insurers and investors.
This shift is also changing how power itself is measured. Military capability remains important. Economic output remains important. Yet the ability to secure continuity during periods of disruption may become one of the most valuable forms of power in the twenty-first century. Countries capable of protecting energy flows, maintaining technological leadership, securing supply chains and ensuring infrastructure resilience will possess significant strategic advantages.
That reality explains why seemingly unrelated events—from negotiations involving Iran to semiconductor policy in Taiwan to AI investment strategies in Washington and Beijing—are increasingly connected. They are all manifestations of the same broader transformation. The world is becoming more aware of the systems that make modern life possible and more conscious of the vulnerabilities embedded within those systems.
The most important signal from this week is therefore not simply whether tensions around Hormuz ease, whether Trump and Xi reach further agreements or whether another diplomatic breakthrough emerges. It is that governments, markets and institutions increasingly view strategic geography as central to future stability. The physical foundations of globalisation are re-emerging as critical determinants of political and economic power.
For years, globalisation encouraged the belief that geography was becoming less important. The events of recent years suggest something different. Geography never disappeared. It merely faded into the background during a period of relative stability. As that stability becomes less certain, geography is returning to the foreground.
The international order that emerges over the coming decade will likely be shaped not only by technological innovation or economic growth, but by the ability of states to secure the infrastructure, supply chains and strategic corridors upon which those achievements depend. In that sense, the future may look less like a departure from history and more like a return to one of its oldest lessons: location still matters.
And in an increasingly interconnected yet uncertain world, it may matter more than many expected.
References:
Reuters — Iran, the Strait of Hormuz and ongoing negotiations regarding regional shipping access
Reuters — Trump–Xi discussions and broader U.S.–China strategic negotiations
CommonWealth Magazine — Analysis of Trump–Xi discussions, China’s strategic position and infrastructure competition
https://english.cw.com.tw/article/article.action?id=4773
Al Jazeera — UAE efforts to expand oil export routes bypassing the Strait of Hormuz
https://www.aljazeera.com/news/2026/5/15/uae-to-accelerate-oil-pipeline-project-to-bypass-hormuz
Additional background reading:
Council on Foreign Relations — Strategic significance of the Strait of Hormuz
https://www.cfr.org/global-conflict-tracker/conflict/confrontation-between-united-states-and-iran
Centre for Strategic and International Studies (CSIS) — Supply chains, strategic competition and economic security
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