International relations is full of David and Goliath stories right now—most notably Ukraine and Russia—but one of the most interesting ones has gone largely unnoticed by the U.S. public, and carries lessons for the global economy.
In mid-2021 the small Baltic republic of Lithuania—a European Union member and former Soviet satellite—irked Beijing by permitting Taiwan to open a local representative office with “Taiwan” in the name. Most countries with friendly but unofficial relations with Taiwan have long used “Taipei” instead to avoid provoking Beijing, which claims the self-ruled island as its own. China responded by restricting Lithuanian imports and exports in late 2021—and eventually targeting supply chains that run through it.
