Power abhors vacuum

Everybody expected Trump’s obsession with tariffs to rattle international financial markets, no doubt, yet few figured it would quickly trigger debate that tariff wars, now inevitable, will possibly fracturing America’s traditional political/financial partnerships and even accelerate the decline of western dominance as we know it.

That’s exactly what’s happening.

History has shown that the world’s leading economic power tends to dictate global trade rules. For decades, that power has been the United States.

But now Trump’s erratic trade policies are undermining the very system that ensured western supremacy. He views trade as a zero-sum game, where America’s gain must come at another country’s loss.

This thinking is not just economically flawed; it is geopolitically dangerous.

Trump’s tariffs are already generating economic blowback. A 25pc blanket tariff on steel and aluminum imports, due to take effect next month, is not just a tax on foreign suppliers — it is a tax on American businesses and consumers.

Now it’s only natural for industries that rely on imported metals, from automakers to construction firms, to feel the sting of rising costs. And you can count on retaliatory measures being considered by US allies to further compound the damage.

The European Union, in a show of desperate preemptive de-escalate, is considering slashing its own tariffs on US cars from 10pc to 2.5pc. India is also reviewing a list of 30 product categories for potential tariff reductions. These moves suggest that Trump’s tactics might be wringing force short-term concessions.

But expert commentary, from Bloomberg to Reuters (among others), is already pointing out how the long-term picture is far grimmer: – the world is learning to trade without America.

When allies like Canada and the EU feel compelled to hedge their bets by diversifying trade relations with China and other emerging powers, the strategic consequences become clearer. As America pulls back from multilateral agreements and disrupts global supply chains, China is stepping in to offer stability. In trade, as in geopolitics, power abhors a vacuum.

The most immediate consequence of Trump’s tariff war is the erosion of trust. The US has long benefited from a rules-based trade order where partners could count on American leadership.

That foundation is now crumbling. Canada, Mexico, and the EU — historically America’s closest allies — are openly challenging US trade policy. Once shaken, these relationships will not be easy to rebuild.

It almost appears as if Trump’s America First doctrine is designed to alienate allies and embolden rivals. China, for instance, has seized on this moment to present itself as the champion of globalisation. Beijing is deepening its trade ties with Europe, Latin America, and Africa, while Washington is busy upending decades-old agreements.

The more the US isolates itself with trade wars, the more China gains influence in shaping the global economic order. Hence the chatter about a new broad trend emerging on the global stage – the decline of western economic hegemony.

For much of the post-World War II era, the US and its allies have dominated and directed global trade. The World Trade Organisation (WTO), international trade agreements, and financial institutions like the IMF and World Bank were all designed to reinforce western economic dominance.

Trump’s actions are eroding that system.

By making trade policy unpredictable, the US is pushing other countries to create alternative frameworks. The European Union is accelerating trade agreements with Asian economies. China’s Belt and Road Initiative is drawing new economic dependencies across Eurasia and Africa. Even smaller players like Vietnam, Thailand, and South Korea are pivoting toward regional trade deals that reduce reliance on the American market.

Meanwhile, the unpredictability of Trump’s tariffs discourages long-term investment. Companies operating in global supply chains — especially in industries like semiconductors, automobiles, and consumer electronics — require stability. When trade policy is dictated by presidential whims rather than economic logic, businesses will adapt by diversifying away from US-centric strategies.

The paradox is that Trump’s strategy is meant to make America stronger. Instead, it is weakening the country’s economic leverage and pushing the world toward a post-western order. If the US continues down this path, it may soon find itself in a world where western economic dominance is no longer the default — and where the rules of trade are written elsewhere.

Trump’s tariffs may not just be a temporary disruption. They may be a wrecking ball swinging at the very foundation of western economic supremacy. And once that foundation cracks, rebuilding it will be far harder than tearing it down.

Copyright Business Recorder, 2025