Beijing, March 5, 2025 – While the Trump administration is upending the status quo of global security and trade, the biggest loser will be the US itself
US President Donald trump’s plan to eviscerate the liberal post-war order is off to a great start. In less than 50 days, he has managed to seriously damage the trusted relationship America has enjoyed with Canada, Mexico and the European Union.
Trump has put the Nato alliance into question, turned America’s policy on Russia upside down, compromised Ukraine’s sovereignty and prompted the world’s economists to contemplate a global recession as a result of his absurd tariffs.
The weakening of institutions like Nato may embolden rival powers, leading to increased regional conflicts. Sustained trade tensions and protectionist measures will undoubtedly have hindered global growth, severely disrupted supply chains and contributed to recurrent market instability.
The long-term impact on international cooperation, particularly in addressing global challenges such as climate change and public health, will be significant, necessitating a reassessment of time-tested multilateral strategies.
The self-imposed purging of American leadership in some multilateral institutions will undermine global cooperation on trade, security and health.
The multilateral system will not collapse but will become more fragmented and unstable.
This will open the door for China to pick up the slack – not from a voting rights perspective, but in terms of its behind-the-scenes influence in the multilateral institutions.
Beijing will no doubt seek to play an enhanced role in global finance as a result of a weakened International Monetary Fund and World Trade Organisation.
In light of reduced US security commitments, the European Union will have an incentive to pursue greater strategic autonomy. Initiatives to bolster defence capabilities and reduce reliance on external powers are already under way.
Nations such as Japan, Turkey and Poland will probably seek to expand their influence regionally, filling some of the vacuums left behind.
Japan’s military modernization, Turkey’s regional assertiveness and Poland’s leadership in Eastern Europe already exemplify this trend.
The global economy will be lucky to maintain a modest growth rate but it may prove to be insufficient to foster sustained economic development, particularly in emerging markets and developing economies.
The rise in global defence spending in 2024 is likely to continue, with nations enhancing their military capabilities to address evolving security challenges. Investments in defence are likely to spur technological innovation, potentially benefiting civilian sectors.
European nations are expected to significantly increase defence spending, by up to 3.5 per cent of gross domestic product.
While enhancing the continent’s military capabilities, this will also almost certainly result in higher taxes or increased borrowing, presenting a challenge to existing fiscal policies. (South West China Post)
