Whether and how economic interdependence promotes peace remains unsettled, with empirical studies producing mixed results. This paper reframes the debate by shifting attention from discrete military conflicts to the broader process of interstate relations. We argue that economic interdependence is unlikely to catalyze the termination of rivalries, as adversarial states tend to discount future trade benefits that are vulnerable to disruption amid hostility and perceive economic dependence as a strategic liability. Commerce alone, therefore, cannot resolve the deep-rooted commitment problem between rivals. However, once rivalries and overt hostilities have subsided, interdependence can facilitate the transition from cold to warm peace by fostering cooperation and reducing the risk of renewed conflict. Analyzing three stages of interstate relations—rivalry, negative peace, and positive peace—from 1901 to 2016, we find robust empirical evidence that interdependence seldom ends rivalries but serves as a glue that nurtures and sustains peace. These findings suggest that both liberal and skeptical perspectives hold validity, but at different stages of interstate relations.