The inauguration of Donald Trump as president of the US will take place on January 20 — the same day as the opening of the World Economic Forum in Davos.
Since the end of the cold war, the annual Davos meeting — which brings together business and political leaders from all over the world — has become a symbol of elite-driven globalisation.
But Trump is a sworn enemy of what he calls “globalism”. Davos-goers promote free trade; Trump says that “tariff” is his favourite word. The WEF hosts innumerable forums about international co-operation; Trump believes in “America First” nationalism.
For three decades, the world’s major powers broadly embraced the Davos worldview. This was a period when economic interdependence drowned out geopolitical rivalries. Trump, President Xi Jinping of China and President Vladimir Putin of Russia have all spoken at the World Economic Forum in the past.
But now, in different ways, the US, China and Russia have all become revisionist powers that are seeking radical change to the current world order.
When Putin launched a full-scale invasion of Ukraine in 2022, he sacrificed his country’s economic ties to the west in favour of his vision of Russian grandeur. Xi’s China has become more nationalistic and more menacing in its behaviour towards Taiwan. And Trump is demanding fundamental changes to the international trading system and to America’s relationship with its allies.
It is not terribly surprising that Russia and China are demanding changes to the world order. Russia is a former superpower that is striving to rebuild its lost influence. China is a rising superpower that wants the world to accommodate its ambitions. It is American revisionism that is both most puzzling and most far-reaching in its consequences.
© FT montage: Valery Sharifulin/Pool/AFP/Getty Images
The US is still the world’s most powerful country and the world’s largest economy. The dollar is the world’s reserve currency and the American alliance system underpins the security of Europe, Asia and the Americas. If the US is serious about fundamentally rethinking its international commitments, then the entire world will have to adapt.
And yet that appears to be what is happening. According to John Ikenberry of Princeton University, a leading theorist of international relations, “a revisionist state has arrived on the scene to contest the liberal international order . . . it is the United States. It’s Trump in the Oval Office, the beating heart of the free world.”
As Ikenberry sees it, Trump is poised to contest “almost every element of the liberal international order — trade, alliances, migration, multilateralism, solidarity between democracies, human rights”.
As a result, rather than supporting the international status quo, the US is poised to become the leading disrupter. “Every talk I’ve ever given on the geopolitical risks that we face in the world started with China and Russia,” says Ivo Daalder of the Chicago Council on Global Affairs. “But the biggest risk is us. It’s America.”
America’s traditional allies are among the countries that feel most threatened by a change in the way that the US exercises its power. Middle-power democracies such as the UK, Japan, Canada, South Korea, Germany and the entire EU have got used to a world in which American markets are open — and the US provides a security guarantee against threatening authoritarian powers.
© FT montage: Andrey Rudakov/Bloomberg
But Trump is promising to impose tariffs on America’s closest allies and has called into question US security guarantees — including Nato’s Article 5, its mutual-defence clause. On one notorious occasion this year, the president-elect remarked that he would let Russia “do whatever the hell they want” with Nato countries that failed to meet their spending commitments on defence.
The threat posed by Trump to allied interests is already leading to agonised debates in some of the countries that he is targeting. When Chrystia Freeland resigned as Canada’s finance minister this month, she accused Justin Trudeau, the prime minister, of failing to recognise the “grave challenge” posed by America’s “aggressive economic nationalism, including a threat of 25 per cent tariffs”. Canada, she suggested, needed to keep its fiscal powder dry to prepare for a “coming tariff war”.
The question of whether and how to respond to Trump tariffs is exercising diplomatic minds across the western world. Finding an answer is all the more difficult because Trump’s true intentions remain unclear. Is the former and future president best understood as a dealmaker? Or is he a revolutionary — intent on blowing up the system, come what may?
The EU’s initial response will be to hope that Trump’s tariff threats are simply a negotiating tactic — and that a reasonable deal can be reached, well before an all-out trade war breaks out. But if Trump goes ahead with his threatened tariffs for a prolonged period, Brussels is likely to hit back.
© FT montage: STR/AFP via Getty Images
Other American allies such as Britain and Japan may respond differently.
The UK government is hopeful that the Trump administration will not impose tariffs on them, especially considering the US has a small trade surplus with the UK. The strong security relationship between London and Washington will make any UK government think twice before engaging in a trade war with the US, even if they are affected by tariffs.
Japan, with a large trade surplus with the US, is a more likely target for Trump’s tariffs. However, Japanese officials do not anticipate retaliating, as they are wary of risking American security guarantees. The need for America’s allies to balance trade priorities and national security underscores the challenges facing the global economic order.
Russia and China are seen as the most significant threats to the established balance of power, as they seek changes to international borders and the security order. Putin and Xi both see opportunities in the current global landscape, with Putin aiming to diminish Western power and Xi asserting the rise of the East over the West.
While Trump and Putin share anti-woke sentiments, their goals differ, with Trump focusing on increasing American power and wealth, while Putin seeks to weaken the West. Xi also sees the decline of Western power as beneficial, aiming to bolster the Brics as a counterweight to the G7.
Both Russia and China have specific territorial ambitions, with Russia’s demands extending beyond Ukraine and China eyeing Taiwan as a crucial part of their vision for regional dominance. A Russian victory in Ukraine could embolden Xi to pursue similar revisionist ambitions in Asia, particularly regarding Taiwan. The potential impact of these actions on the global order is significant and could lead to increased tensions and power shifts. President Joe Biden may feel the urge to solidify his legacy sooner rather than later. He has made it clear that the US is willing to defend Taiwan from a potential Chinese invasion, a commitment that former President Trump did not make. Despite being surrounded by China hawks, Biden has campaigned as a peace candidate and has expressed admiration for leaders like Xi and Putin.
The future of Trump’s America First agenda is uncertain, especially considering the interactions with other foreign powers like Russia and China. There are various possibilities for how the new world order could unfold, ranging from a new great power bargain to anarchy in a leaderless world.
One scenario involves a potential war by accident, where western allies engage in a trade war, leading to political instability in Europe and a risk of military action by China, Russia, or North Korea. Another possibility is anarchy in a leaderless world, where conflicts intensify due to a vacuum in global leadership created by America First policies.
Alternatively, globalisation could proceed without America, as the US retreats behind tariff walls, prompting increased economic interdependence among other countries. Lastly, there is the scenario where America First succeeds, with increased investment in the US, deterrence of aggression from Russia and China, and a decline in Chinese growth.
The future is uncertain, and the next four years are likely to bring a mix of these scenarios and unforeseen developments. As Italian philosopher Antonio Gramsci once said, “The old is dying, and the new cannot be born; in this interregnum, a great variety of morbid symptoms appear.” text in a more concise way:
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