World Order Faces New Challenges as U.S. Shifts Priorities

allies grapple with a changing global landscape amid evolving U.S. foreign policy and trade strategies.

The international system established by the United States following World War II is being tested as the U.S. reconsiders its role on the global stage. Recent policy shifts have led allies to re-evaluate their strategies and seek greater autonomy.

According to former Australian Prime Minister Kevin Rudd, “THE GOLDEN RULE OF NEGOTIATING AND SUCCESS: HE WHO HAS THE GOLD MAKES THE RULES.” This sentiment reflects a departure from the principles that underpinned the post-war order, which aimed to prevent the dominance of might over right.

For those who believed in a principled and generous United States, the current climate presents a critically important challenge. The actions of the U.S. administration, including its approach to international law, trade agreements, and relationships with allies, have prompted some to question long-held assumptions about U.S. foreign policy.

While some observers hope for a change in course, the current direction appears set, at least until the next presidential election. This reality necessitates a proactive response from U.S. allies.

As French President Emmanuel Macron stated, U.S. allies should build a coalition of countries that “will not be bullied.”

Embracing Self-Reliance

In an era defined by “America first,” allies are recognizing the need to bolster their own defense capabilities. This includes investing in advanced weapons systems, increasing stockpiles of equipment, and expanding military personnel. The goal is to enhance their ability to operate independently, without relying solely on the United States.

Vice President JD Vance referenced French leader Charles de Gaulle, who, despite objections from Washington in the 1960s, ensured that france maintained complete sovereignty over its military capabilities, including its nuclear arsenal. As Vance put it, de Gaulle understood “that it’s not in Europe’s interest, nor America’s interest, for Europe to be a permanent security vassal of the United States.”

While previous administrations have encouraged allies to contribute more to mutual defense, the current message suggests a potential shift towards greater self-reliance. The approach to the conflict in Ukraine exemplifies this evolving dynamic.

European countries, facing a direct threat from Russia, possess the economic capacity to match and surpass Russia’s capabilities. Polish Prime Minister Donald Tusk questioned, “Why do 500 million Europeans need 330 million Americans to defend them against 140 million Russians?”

While NATO allies acknowledge the need for increased spending, disagreements persist regarding how those funds should be allocated. The united States favors purchases of American weapons, but allies prioritize developing sovereign capabilities.

The long-term solution involves allies developing independent capabilities to deter aggressors. Though, current dependencies on U.S. technology, such as the F-35 fighter jet, pose challenges to achieving true autonomy.

The EU’s recently unveiled 150 billion euro defense procurement plan largely excludes U.S. companies. At the same time, Portugal has announced it is no longer planning to acquire F-35s, and Canada is reassessing its plans to purchase 88 F-35s. Europe’s challenge is not just to find the money to fund rearmament but also to overcome national rivalries to agree on several standard-bearers for the defense industry, much in the same way that France and Germany came together to create Airbus in 1970. Another inspiring example for Europe (and other U.S. allies) can be found in Ukraine, where the local defense industry has produced one disruptive, innovative, and much less costly capability after another-as demonstrated by the stunning drone attacks that Ukrainian forces launched earlier this week on Russian air bases.

Navigating the Indo-Pacific

In the Indo-Pacific region, the strategic landscape differs significantly. China’s strength relative to its neighbors presents unique challenges. While the U.S. commitment to its Asian allies remains uncertain, the situation in Taiwan is a key point of concern.

While Trump himself has said that Taiwan is challenging to defend and has complained about its semiconductor manufacturing industry, claiming the island “stole the chip business” from the United States and should pay for U.S. protection. But speaking recently at the Shangri-La Dialog in Singapore, U.S. Secretary of Defense Pete Hegseth said Trump has made it clear that “Communist China will not invade Taiwan on his watch” and that the United States would work to make the costs of an invasion too high for China, ensuring that peace in the Taiwan strait was the only option.

Despite these assurances, China’s military exercises around taiwan suggest preparations for a potential invasion. Hegseth himself acknowledged in his speech that an attack could be imminent. Taiwan’s political instability and the potential for coercive measures further complicate the situation.

Given Taiwan’s proximity and importance to Beijing, the U.S. may be hesitant to risk a conflict with China. A Chinese takeover of Taiwan would undermine confidence in the U.S. security umbrella and its ability to deter aggression.

Even though they would be immediately threatened, Japan and South Korea each have the economic power to considerably increase their own defense capabilities.South Korea is already a major defense exporter.But if they lose confidence in washington’s will to fight in Asia, those bases could become liabilities, making it harder for each country to manage its own defense and diplomacy without the concurrence of the United States. The same logic that Vance used to praise de Gaulle’s France would be applied to Japan and South Korea. There is no substitute for establishing sovereign autonomy. Both countries could conclude that it would be best to possess a nuclear deterrent of their own.

southeast Asian countries, with diverse geopolitical orientations, face the prospect of falling under China’s sphere of influence if the U.S.were to withdraw from the region.

The Philippines, a U.S. treaty ally, has experienced increasing incursions from China in the South China Sea. The limited U.S. response has raised concerns about the reliability of its commitment to the region. In the absence of firm U.S. support, the Philippines will inevitably feel compelled to accommodate China’s demands.

Australia’s dependence on the U.S., exemplified by the AUKUS security partnership, presents its own set of challenges. The submarine deal, intended to enhance Australia’s defense capabilities, faces potential delays and uncertainties due to U.S. domestic considerations.

When the AUKUS submarine deal was agreed to in 2021, an understandably angry French foreign minister said, “Australia has sacrificed sovereignty for the sake of security. It is indeed likely to lose both.” AUKUS may be a cautionary tale for other allies.Sovereignty and autonomy are more important than ever. Compromise them at your peril.

Trade and Economic Realities

In the realm of trade, the U.S. has pursued policies aimed at asserting its power and extracting concessions from other nations.This approach has disrupted existing partnerships and challenged the global trading system.

Trump said in April, “These countries are calling us up, kissing my ass. . .. They are dying to make a deal.”

The imposition of tariffs, such as those on aluminum imports from Canada, defies basic economic principles and harms consumers. Trump does not believe in comparative advantage. Rather, if a country has a trade deficit, it’s a loser. If it has a trade surplus, it’s a winner. I remember meeting him in Manila in November 2017 when I was prime minister of Australia. He was complaining bitterly about the size of the U.S. trade deficit with China. He asked me what would happen if he banned all chinese imports. I quietly replied, “A global depression.”

Countries committed to free trade are seeking to establish new agreements that exclude the United States. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) serves as an example of this trend.

By early 2018, the Trans-Pacific Partnership had lost one member and gained two adjectives; the now 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership was born. The United Kingdom has acceded to the trade pact and several other major economies,including China,South Korea,Indonesia,and Taiwan,have expressed interest in joining. the CPTPP was the most significant international trade agreement ever negotiated since the completion of the Uruguay round of talks in 1994 that resulted in the creation of the World Trade Organization. It was agreed even as a protectionist tide was rising in countries around the world. Unlike traditional trade deals,the CPTPP doesn’t simply reduce tariffs on goods but sets binding rules on digital trade,e-commerce,data flows,and the protection of intellectual property. It enforces core labour rights, including the right to form independent trade unions, and prohibits employment discrimination on the basis of characteristics such as race, religion, and gender. And it obliges parties to avoid favoring their state-owned enterprises in a way that disadvantages foreign competitors. The CPTPP stands as a bold reply to Trump’s rejection of multilateral trade leadership. Its members showed that they could reduce their exposure to U.S. political instability and trade unilateralism and at the same demonstrate that global rule-setting can proceed without American participation or consent.

U.S. allies are exploring alternatives to the U.S. market. The EU is pursuing new trade relationships, including potential agreements with ASEAN and participation in the CPTPP.

Two staunch U.S. allies in East Asia-Japan and South Korea-are seeking closer relationships with China. As speculation about Trump’s tariffs swirled in March, the three countries’ foreign ministers agreed to “comprehensive and high-level” negotiations toward a free-trade deal.

Implications for the Future

China stands to benefit from the shifts in U.S.foreign policy. The U.S.’s dominance in the global system of trade and finance is being challenged, not by China’s actions, but by the U.S.’s own policies.

Consider the folly of Trump’s treatment of Australia. The United States enjoys a large trade surplus with Australia; in Trump’s terms, the United states is already winning this bilateral relationship. It has no better ally or trade partner. And yet he chose to impose an across-the-board ten percent tariff on Australian goods and a 25 (now 50) percent tariff on Australian steel and aluminum at the same time as Washington is trying to line up allies against China. A third of Australia’s exports go to China. In these circumstances, Canberra will be reluctant to hew more closely to Washington’s line. Slowing the growth of China’s economy (and its demand for Australian resources) is hardly in Australia’s interest.

Trump’s goal is to reindustrialize the United States and assert American hegemony. Voters in the United States will have to decide eventually whether these are plausible or worthwhile goals, but U.S. allies should already have made up their minds.

The trust that allies placed in the united States is eroding. While future U.S. leaders may attempt to restore moral leadership, regaining lost trust will be a difficult task. If the U.S. prioritizes its own interests above all else, it risks ushering in a more uncertain and challenging world for everyone.