The current Grand Duke Portyr and the Baldurian Parliment have no interest in involving their city in the affairs of others. Baldur's Gate is, for the most part, seen as a neutral state in relation to the other states that occupy the Sword Coast and the Western Heartlands. This reputation was mainly earned by allowing refugees into the city during the fallout of the Spellplague. Baldur's Gate is a very wealthy city and is so well protected by its massive walls and the Flaming Fist guards that few would ever consider attacking the city.
Baldur's Gate has long had disputes with it's southern neighbour, Amn. This nearly resulted in a war breaking out between the two states during the Iron Crisis of 1368DR. Recently, though, the closest enemies the city faces are the pirates running out of Luskan and the merchants from Waterdeep, jealous of the city's growing riches and power.