In 1906, the British journalist and future Conservative politician Leo Amery penned The Fundamental Fallacies of Free Trade, an attack on more than half a century of British economic policy. While Liberals (and most Conservatives) fetishised free trade dogma, Amery argued, Britain’s rivals had embraced protectionism and were rapidly turning British global supremacy into a relic of the past. Tariffs seemed to offer an alternative – a way to revitalise domestic industry, reduce reliance on foreign imports, and knit the British Empire more tightly together, thereby arresting Britain’s relative geopolitical decline and positioning it to compete with ambitious new empires. After all, Amery pointed out, ‘through protectionism, other countries, America, Germany, Japan, are building up vast industries, and breeding great armies of citizens for the economic and political struggle of the future’.

Amery’s polemic was part of a broader assault on British economic and foreign policy orthodoxy at the turn of the 20th–century. The long-standing hegemony of laissez-faire liberalism, which prevailed under the influence of the Manchester School and became government policy under Chancellor of the Exchequer and later Prime Minister William Gladstone, was coming to an end, challenged by arguments for economic interventionism. The rise of great power rivals, moreover, undermined Victorian verities about splendid isolation and the Concert of Europe. From the 1890s, with an increasingly powerful Germany on the Continent and imperial challengers proliferating – France in Africa and the Mediterranean, Russia threatening India and the Suez Canal from Central Asia and the Turkish Straits respectively, burgeoning US influence in the Americas, and a rising Japan in East Asia – Britain’s long-standing strategy of offshore balancing to focus on global trade and empire looked increasingly untenable. As Liberal Cabinet minister John Morley aptly put it after Gladstone’s death in 1898: ‘Many things went down into Mr Gladstone’s grave.’

The years before the First World War are commonly seen as a high point for the first great wave of liberal globalisation and the British imperial power, which made it possible. The corollary is that global economic integration hit a wall in 1914, and despite valiant efforts to reconstruct the international order in the 1920s, it succumbed to protectionism, autarky, and deglobalisation in the 1930s. There is, to be sure, much truth in that narrative. But history is rarely so straightforward. Long before the outbreak of the Great War, the world was already entering a post-liberal moment of protectionism and great power competition in which mercantilist tendencies and zero-sum geopolitics began to reshape and rewire the global order. Though Amery would have to wait until 1932 for Britain to abandon free trade, his critique reflected the shift from a British-led liberal order towards a more multipolar and mercantilist world. That history has renewed relevance amid the economic and geopolitical upheavals of our own times.

From the 1840s, Britain built and upheld a relatively liberal international order that lubricated global trade and investment. Through both persuasion and coercion, it drove an unprecedented era of economic liberalisation and interdependence. Having dropped import tariffs to next to zero, it negotiated the world’s first most-favoured-nation trade agreement with France, deployed the Royal Navy to pry open foreign markets and patrol global sea lanes, and flooded the world with capital that financed astonishing technological advances, from steamships to undersea telegraph cables and transcontinental railways. From 1850 to 1914, the value of global trade expanded tenfold, and by 1913, nearly half of global foreign investments were British.

The liberal theory, then as now, was that international trade was a fundamentally pacific force, part of a broader vision of progress and stability. As liberal philosopher John Stuart Mill argued in his Principles of Political Economy (1848):

It is commerce which is rapidly rendering war obsolete, by strengthening and multiplying the personal interests which are opposed to it. And it may be said without exaggeration that the great extent and rapid increase of international trade, in being the principal guarantee of the peace of the world, is the great permanent security for the uninterrupted progress of the ideas, the institutions, and the character of the human race.

Yet international politics did not develop according to Mill’s vision. That was not only because of the outbreak of war in 1914, which, among other antagonists, pitted Britain against Germany despite both countries being each other’s largest individual trading partner. Although exports as a percentage of global GDP reached a pre-war high in 1913, trends beneath the surface were more ominous. By the 1870s, historian Anthony Howe observes, ‘a new age of military conquest, imperial expansion, and neo-mercantilistic economic policies’ was already supplanting the liberal order.

The driver of that shift was the interplay of economics and geopolitics. On the economic front, globalisation lowered shipping and transportation costs, which was decisive in integrating global markets. Add to that a boom in New World grain production, and agricultural prices fell substantially – a trend amplified by a long period of deflation following the Panic of 1873, a financial crisis triggered by the collapse of a bubble in railway stocks. Industrialists in both Europe and the New World, meanwhile, lobbied for protection against British-manufactured goods. The combination of agricultural and industrial interests spurred a protectionist revival – first in the United States, where the post-Civil War influence of northern industrialists reinforced tariff walls, and then, crucially, in Germany, where Bismarck’s marriage of iron and rye (western industrialists and eastern farmers) resulted in a new tariff regime in 1879. In a dynamic familiar today, global economic integration led to the return of tariffs, driven largely by the victims of foreign competition.

Even in Britain, where free trade was deeply entrenched thanks to the interest of northern industrialists in cheap imported food and raw materials, which kept labour and production costs low, and support from London’s commercial and financial elite, demands for protectionism grew. As early as 1872, future Conservative prime minister Benjamin Disraeli suggested a pan-imperial tariff, and revelations about the poor fitness of British military recruits three decades later during the Boer War (1899-1902) focused attention on urban squalor, in turn fuelling criticism of free trade.

By 1900, moreover, it was clear that British-led globalisation had helped other countries grow strong – first economically and then, inexorably, militarily. Most important were the United States and Germany, which traded extensively with Britain and its empire throughout the 19th century en route to becoming the world’s most dynamic industrial powers. In the US case, exports to Britain – predominantly slave-harvested cotton – accounted for 50 per cent of all US exports between 1815 and 1860, while British manufactured goods and investment capital flowed into the voracious American market. The two economies were so integrated that, historian James Belich argues, they were ‘in some respects a single economy’.

German industrialisation similarly achieved escape velocity in part through international trade. At mid-century, British-manufactured goods as well as colonial resources flowed into the German Empire, while German food and raw materials fuelled the British economy. As Paul Kennedy put it in his monumental study of Anglo-German rivalry, trade patterns into the late-19th century left ‘an overwhelming impression of the manner in which the two economies complemented each other’. Even after Germany imposed its new tariff regime and rapidly industrialised, growing its gross national product threefold between 1873 and 1913, Britain was its primary export market for manufactured goods, and the British colonies supplied an important share of its imported raw materials.

British trade and investment, then, was crucial in boosting American and German economic development, while the Royal Navy de facto subsidised their growth by defending international commerce. The problem for London was that both countries soon overtook Britain in economic size and industrial prowess. By 1872, the US boasted the world’s largest economy and, by 1900, a flood of US-manufactured goods into Britain prompted panic about an American economic invasion. There were also widespread fears about the US drawing British Canada into its commercial orbit. Germany, for its part, equalled British GDP with higher growth rates around the turn of the century and was already outproducing British industry in cutting-edge sectors like chemicals and electrical manufacturing, as well as the critical defence-industrial components of steel and pig iron.

While US and German goods entered Britain’s free trade tariff-free, British goods faced steep protectionist barriers in the other direction. In different ways, both countries sought to achieve economic sovereignty from London. A similar dynamic was apparent in France, Russia, and Japan, all of which embraced protectionism – a conscious policy of import substitution to boost domestic industrial production at the expense of cheaper British goods – by the time Amery published his anti-free trade manifesto in 1906. ‘The integration of the world market’, historian Sebastian Conrad observes in the German context, ‘went hand in hand with a re-nationalisation of the economy along neo-mercantilist lines’.

In effect, British-led globalisation contributed to the rapid industrialisation of other major powers. That, in turn, shifted the balance of global power away from the British Empire and undermined the geopolitical conditions that had made a British-led liberal order possible. In other words, ‘globalisation included the rapid spread of industrialism in Western Europe and the United States’, imperial historians P.J. Cain and A.G. Hopkins conclude, which ‘increased the competitive element in world trade, promoted imperial ambitions, and threatened the Pax Britannica.’

Those ambitions manifested in a race for empire that accelerated from the 1880s. The so-called Scramble for Africa was the most infamous example of a broader trend whereby imperial powers carved up what remained of the world’s ostensibly unclaimed land. With railways opening up continental interiors, steamships turning oceans and rivers into superhighways, and telegraph cables carrying near instant communications, hitherto inaccessible or unprofitable territories fell prey to imperial expansion. Germany and France gained possessions in Africa and Asia; Russia expanded and consolidated its hold in Central Asia and Siberia; Japan made territorial gains in Taiwan, Korea, and Manchuria; and the United States became an extra-continental power with the acquisition of the Philippines, Hawaii, Guam, and Puerto Rico, as well as a protectorate over Cuba, following the Spanish-American War (1898).

The logic of imperial aggrandisement, beyond the trappings of great power status, was mercantilist – what was unclaimed by one power would be inevitably obtained by another, falling behind tariff walls in a competition for markets and resources. ‘In Europe, North America, South America, Africa, and Australasia, there is scarcely a region left for the pegging out of a claim of ownership, ‘ observed British geographer Halford Mackinder in 1904. After centuries of European expansion, he explained, the global order had become ‘a closed political system’ in which geopolitical events ricocheted around the world. The new era of ‘world politics’, historian John Darwin has compellingly argued, thereby combined a globalised economy and international system with the consolidation of imperial rivals to British power, resulting in a collection of ‘world states’ that ‘were expected to share global mastery between them’. That system of ‘competitive coexistence’ proved both unstable and short-lived.

Two further consequences flowed from what was long ago termed the ‘new imperialism’. The first was the emergence of increasingly mercantilistic commercial patterns, as the world’s leading powers traded and invested relatively more within domestic, imperial, and regional markets, and less across geopolitical frontiers. In Britain, still the world’s foremost commercial state, exports as a share of GDP reached a prewar high of 25 per cent in 1913 (up from 15 per cent in 1856), although its share of overall global exports declined from the 1870s. A higher percentage of its trade and investment, however, went to its empire – especially the rapidly growing dominions, which offered emerging market growth rates with developed market risk profiles. Indeed, the percentage of British exports destined for the empire rose from 27 per cent in 1871 to 35 per cent by 1913, while the share going to Western Europe and the United States declined in parallel. The dominions also tweaked their own tariff policies to favour British imports and specialised in exports designed for the imperial ‘home’ market. Historian Andrew Dilley further calculates that ‘of an estimated £3.1 billion of capital exported from Britain between 1865 and 1914, 27.6 per cent was placed in colonies enjoying responsible government (constituting 71 per cent of all British investment in the empire)’ – part of a web of financial and economic connections across Britain and the dominions that tightened through the Second World War.

The other side of the coin was the domestic and regional concentration of American and German economic activity. For the US, rising protectionism – the McKinley (1890) and Dingley (1896) tariffs took rates to new highs – combined with continental expansion reoriented trade patterns and augmented the domestic market, which took a rapidly growing share of America’s burgeoning industrial output. By 1900, the US had effectively decoupled from Britain: US-manufactured goods displaced British ones in the domestic market, where foreign imports accounted for less than 10 per cent of consumption by 1909, and Wall Street increasingly equalled the City of London as a source of investment capital for the fast-growing American West. By 1914, the US was unique among industrialised states in the extent to which it had achieved economic self-sufficiency, largely due to its western expansion.

The German Empire’s experience was different, since its domestic market and meagre imperial possessions could never absorb as large a share of its industrial production as the US. But it was similar in one crucial respect: its economic integration with Britain declined significantly in relative terms, with roughly 20 per cent of German exports destined for Britain in 1889 compared with 14 per cent in 1913. In fact, while German exports grew faster than the global average and comprised a rising share of global exports between the 1870s and 1913, the share going to both free-trade Britain and the protectionist United States declined markedly. Even more striking, the percentage of German exports to continental Europe remained constant from 1889 to 1913, never falling below 75  per cent.

In the decades before the outbreak of the Great War, therefore, international trade continued to increase, although trade patterns among the world’s three largest economies were fragmenting along geopolitical lines.

The second major consequence of the new imperialism was deepening geopolitical competition, coupled for Britain with concerns over imperial overstretch and dependence on imported food and raw materials. British policymakers were adjusting as early as 1870-71, when Prussia defeated France and proclaimed the German Empire at Versailles. British fears of a dominant continental power still focused on France, which had prompted the conflict, and Germany still faced Russia and Austria as balancing powers in the east. Bismarck’s triumph was therefore treated with relative equanimity in London. Still, German military prowess and the sudden shift in the European balance of power raised the prospect of future British intervention on the continent.

At the same time, the rapid growth of the United States changed the balance of power in the Americas. As a result, and to settle lingering Civil War-era disputes, Britain and the US signed the Treaty of Washington in 1871, which effectively conceded the Monroe Doctrine and American hegemony in the Western Hemisphere in exchange for de facto US recognition of the new Dominion of Canada. London withdrew the last of the British Army from North America soon afterwards.

Britain nonetheless remained the world’s leading power into the 1900s, but its leaders were increasingly anxious. Britain, remarked Colonial Secretary Joseph Chamberlain in 1897, was a ‘weary Titan, struggling under the too vast orb of its fate’. The concept of imperial defence entered the policymakers’ lexicon, implying extensive overseas military commitments. Rapprochement with the United States boosted the positive side of the ledger, yet the inexorable rise of Germany, and to a lesser extent Japan, along with entrenched imperial competition from France and Russia, contributed to a sense that Britain had too many strategic obligations and too few resources to meet them. As Winston Churchill put it succinctly in 1914:

We have engrossed ourselves an altogether disproportionate share of the wealth and traffic of the world. We have got all we want in territory, and our claim to be left in the unmolested enjoyment of vast and splendid possessions, mainly acquired by violence, largely maintained by force, often seems less reasonable to others than to us.

That realisation drove the emergence of a vigorous protectionist movement in the British Empire, exemplified by the campaign for imperial tariff reform, in which Amery became an acknowledged leader. As early as 1897, Chamberlain proposed an imperial Zollverein, or customs union, to affect the economic, and ultimately political, union of Britain and its settler dominions. Though later watered down to a system of preferential tariffs, the theory was the same: tariffs to raise wages by protecting British industry from foreign competition coupled with privileged access to dominion markets and resources. With its combined demographic and economic weight, ‘Greater Britain’ could compete with geopolitical rivals in any corner of the world while becoming increasingly self-sufficient in raw materials, agricultural production, and industrial manufactures.

It was not as far-fetched as it might seem. Although imperial preferential tariffs were not established until 1932, during the First World War the dominions contributed 1.3 million soldiers (almost entirely volunteers), while Canada, Australia, and New Zealand alone added roughly 40 per cent to Britain’s economic output, including vital grain and artillery production. In effect, even without a system of imperial protectionism, the settler dominions comprised an economic and military alliance that proved critical in buttressing British power.

Even with the imperial contribution, which in any case was uncertain prior to the war, Britain faced sustained challenges to its strategic supremacy before 1914. Indeed, all other imperial contenders launched naval armament programs in the 1890s and 1900s after Britain began modernising its fleet in 1889 – to defend rising trade volumes, assert great power status, and respond to each other in a classic security dilemma. Suddenly, after decades of unchallenged naval power, Britain found itself in an arms race.

The key driver of that arms race was Germany. While Japanese and US naval build-ups reflected their growing regional and strategic interests (including against each other in the Pacific), France, Russia, and above all Britain responded to Germany’s blue-water ambition. That story is well known: a new, post-Bismarckian generation of leaders, pushed by Kaiser Wilhelm, sought to make Germany a truly global power, not limited to the European continent. As part of that turn to Weltpolitik, Berlin began a massive naval construction program, which London – drawing on its immense commercial wealth – felt compelled to match and exceed as the ultimate guarantee of its imperial system. But the genie was out of the bottle. A US or Japanese naval programme might threaten the imperial periphery; a German navy was a direct threat to British maritime supremacy in Europe and even to the home islands, and therefore London’s fundamental claim to global power.

The result was a revolution in British geopolitical strategy: the end of splendid isolation and a reorientation towards deterring German ambitions in Europe. To London’s rapprochement with Washington were added an alliance with Japan (1902) as well as ententes with both France (1904) and Russia (1907), which allowed Britain to reposition naval assets closer to home in the English Channel and the North Sea. Although Britain remained the world’s leading naval power, it was forced to rapidly adjust to a new era of global multipolarity and a German challenge for hegemony on what was then the world’s strategically decisive continent.

We know that the evolution of global politics from liberal order towards multipolar mercantilism between the 1870s and 1914 ended in disaster. An international system based on rival imperial spheres of influence and competitive coexistence between established and rising powers proved to be structurally unstable. Those conditions made a systemic geopolitical and economic breakdown far more likely, though not inevitable. Britain’s failure to deter German aggression in Europe by more clearly indicating its bright red line – the security of Belgium and its great English Channel port at Antwerp – is the most obvious counterfactual that might have prevented the Great War. Had the war not intervened, we might now view the first decades of the 20th century as a period of transition to a more sustainable multipolar imperial order.

The actual history, however, is illuminating enough. Indeed, the similarities with our own shifting global order are striking. Like the British ‘world-system’, the US-led international order of the past 80 years provided the geopolitical and economic conditions for other countries to develop rapidly. In time, that shifted the balance of global power in their favour. The most important beneficiary was China, which, having joined the global economy after 1978 and the World Trade Organization in 2001, enjoyed regional stability, falling transport costs, and access to US markets, but protected its own economy with tariffs, subsidies, and state-owned enterprises. Its growing economic heft, in turn, is now being channelled into an historic buildup of conventional, nuclear, and high-tech military power. The parallels to the Anglo-German antagonism at the turn of the 20th century have not escaped notice.

As a result, US policymakers have embraced a largely bipartisan suite of new economic policies – tariffs, export controls, subsidies, and tax credits – aimed at boosting America’s industrial base, building supply chain resilience, and bolstering the United States’ global strategic position. In that respect, Washington has moved faster and more decisively than London a century ago away from free trade liberalism and towards a mercantilist fusion of economic and national security policy. Whether a rapid military build-up akin to Britain’s naval rearmament programme follows remains to be seen.

Yet for all the contemporary debate about geopolitics, tariffs, and economic fragmentation, the experience of the past suggests that we should not be overzealous in pronouncing the end of globalisation. No state has so far maintained trade-prohibitive tariffs, nor is economic autarky a serious policy goal for any major country. Deglobalisation in the 1920s and 1930s followed a world war, the Great Depression, and the rise of fascism and communism; we are very far from equivalent shocks in the mid-2020s.

In some ways, globalisation versus deglobalisation is not even an especially useful analytical framework. Historians tend to think of globalisation a set of processes that operate downstream from geopolitics whose character shifts and evolves over time, rather than as an end state. The rewiring of global trade patterns amid a shifting balance of power is, in historical terms, the rule and not the exception.

What seems clear, however, is that the era of a US-led liberal order is over. The new balance of global power – in which the United States is the leading but no longer hegemonic state – is likely to be increasingly multipolar, and geopolitical as well as domestic tensions are already driving the emergence of a global economy based on rising protectionism, industrial policies, and metastasising conceptions of national security. The combination of geopolitical and economic competition is likely to be mutually reinforcing as points of friction multiply. It is a world that policymakers from the 1890s and early-1900s would find eerily familiar.

Of course, any analytically rigorous attempt at applied history must acknowledge the differences as well as the similarities of any historical analogy. In this case, formal imperial expansion is no longer an accepted norm in international affairs; the United States is far more powerful relative to its competitors both economically and militarily than Britain was at a similar stage; those competitors are less numerous today than they were before 1914; and Washington now, unlike London then, has enthusiastically embraced the post-liberal zeitgeist and is actively working to reshape the order that it created.

But the parallels between 2025 and 1906, when Amery published his protectionist tract, are compelling.  The experience of the past suggests it will be a bumpy ride.