Critics have always portrayed America as a selfish country that spreads its influence everywhere with little regard for the well-being of others. Now, however, President Donald Trump’s misguided, unpredictable, and self-defeating trade policies make even the most caricatured of such a description seem flattering. Yet, in a strange way, Trump’s trade follies have also exposed the failings of other countries, forcing them to consider what their responses say about their own intentions and capabilities.
They say that a person’s true character is revealed in times of trouble. The same can be said for countries and their political systems. Trump’s frontal assault on the global economy was a shock to everyone, but it also gave Europe, China, and the middle powers a chance to show who they are and what they stand for. It was a call to articulate a vision of a new world order that would address the imbalances, inequalities, and fragility of the old order and that would not depend on the leadership – for good or ill – of a single powerful country.
Few accepted the challenge.
In this respect, perhaps the biggest disappointment has been the European Union. In terms of purchasing power, the EU is almost as powerful as the United States: it accounts for 14,1% of the global economy; the US has 14,8%; China has 19,7%. And despite the recent rise of the far right, most European countries have avoided a slide into authoritarianism. As a group of democratic nation-states whose geopolitical ambitions do not threaten others, Europe has both the strength and the moral authority for global leadership. Instead, it has wavered and then caved to Trump’s demands.
Europe's ambitions have always been somewhat narrowly local, but after giving in to Trump, it is not entirely clear whether it has managed to protect even its immediate interests.
The July agreement between Trump and European Commission President Ursula von der Leyen leaves 50% tariffs on European steel and aluminum exports, imposes a 15% tariff on most other exports, and commits Europe to a ridiculous amount of energy imports from the United States. Rarely has the EU’s structural weakness, as a confederation of states without a collective sense of identity, been so apparent.
China has played a tougher game, resolutely responding to America with its own tariffs and restricting exports of key minerals to the United States. Trump’s vindictive, destructive foreign policy has helped China expand its influence and increase its credibility as a reliable partner for developing countries. The Chinese leadership, however, has also failed to articulate a workable model for a post-neoliberal global economic order. Notably, China has shown little interest in correcting the two global imbalances it has created with its huge trade surplus and its excess of domestic savings over investment.
Meanwhile, smaller countries and middle powers have largely played the quiet game, striking independent deals with Trump in the hope of limiting the damage to their economies. Brazil has been an exception. Its president, Luiz Inacio Lula da Silva, has become a rare example of a leader who has refused to bow to Trump. Despite punitive tariffs of 50% and open personal attacks, he has proudly defended his country’s sovereignty, democracy, and independent judiciary. As the New York Times notes, “perhaps no world leader has stood up to Trump as forcefully as Mr. Lula.”
The world desperately needs such leaders. Political scientist Pratap Banu Mehta says many business and political elites are looking for ways to accommodate Trump. But, Mehta argues, they misunderstand Trump and the world he is creating. At any other point in modern history, the Trump administration’s behavior would be immediately recognized for what it is: imperialism, pure and simple.
Imperialism must always be resisted, never accommodated. This requires strength and determination. Yes, America has long held the reins of the global economy. The dollar is strong, and the American market remains extremely important. But these advantages are no longer as strong as they once were. It would defy political logic and the laws of economic gravity for a country that controls only 15% of the world economy (measured by purchasing power parity) to dictate the rules of the game to everyone else. Yes, the rest of the world remains divided, but all countries collectively, of course, have an interest in opposing Trump’s imperialism, or rather, in uniting to resist his demands.
Finding common ground is perhaps the most difficult task. If Trump “wins,” it will be because the other major economies have been unable (or unwilling) to formulate an alternative framework for the global economy. Longing for traditional multilateralism and global cooperation (as many victims of Trump’s wrath do) is of little use. It is simply a signal of weakness.
The world needs new ideas and principles to avoid both the instability and inequalities of hyperglobalization, as well as the destructive consequences of “beggar thy neighbor.” It is unrealistic to expect a new Bretton Woods. But middle powers and major economies can still demonstrate these principles in action by applying them to their own policies.
Trump's actions have become a mirror for others, and most must realize that their reflection is not a pretty sight. Fortunately, their apparent helplessness is self-imposed. It is not too late to choose self-confidence over humiliation.
The author is a professor of international political economy at Harvard University
Copyright: Project Syndicate, 2025. (N. R.)
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