The Risk of Reneging

Power, by its nature, exists only in relation

For most of the lives of most people reading this, we have lived under unquestioned U.S. international leadership, enjoying its benefits often without consciously recognizing them. "U.S. leadership" and "Western leadership" are not abstract notions, but material realities that influence trade, security, and ultimately, quality of life. Living in a world led by the U.S. has meant that people under the dominion of the U.S. and its allies enjoy privileged access to global markets, priority access to the materials essential for technological advancements that make our lives better and easier, and an economic system that minimizes violent conflict and increases abundance. Our position on the world stage grants Western populations, and Americans in particular, prosperity in the form of education, health, stability, and leisure at a level and consistency unknown to most in the world for most of history.

This prosperity extends beyond Western nations. Most of the world shares in these benefits through a global system of multilateral political, economic, and military institutions, made possible by the historical and enduring economic and security supremacy of the West. After World War II, the United States and its allies built an economic order that reduced zero-sum interactions. At the Bretton Woods conference, they laid the groundwork for the International Monetary Fund, the World Bank, and the General Agreement on Tariffs and Trade (the predecessor of the World Trade Organization), which together promoted the free movement of goods and services and stimulated international economic growth.

The United States' history demonstrates that alliances are not burdens but force multipliers that have consistently advanced American interests. After World War II, U.S. security commitments created the stability necessary for unprecedented economic growth. Washington's pledge to defend Europe through NATO's Article 5 not only prevented Soviet expansion but enabled the European economic miracle, creating wealthy trading partners and strong allies. In Asia, U.S. security guarantees to Japan and South Korea fostered similar transformations, turning former adversaries into prosperous democratic allies and vital economic partners. These nations now stand as innovation powerhouses, critical nodes in global supply chains, and essential security partners in their respective regions.

America's alliance network has proven to be a strategic advantage that adversaries cannot replicate: it provides forward bases for power projection, intelligence sharing that enhances security, and economic partnerships that drive innovation and growth. The result is a world order characterized by abundance through alliance, where U.S. leadership creates positive-sum outcomes that benefit both America and its partners.

However, the international order has always contained elements of zero-sum competition. While the global economy may grow overall, losses and gains are often relative, particularly in strategically vital areas. Control over technology, resources, or trade routes often comes at the expense of others, with gains by one nation inherently threatening another. Securing critical resources or technological dominance not only yields economic gains but also enhances geopolitical leverage, often perceived as zero-sum power competition. Tangible power translates to the ability to safeguard and advance national interests internationally and improve citizens' quality of life domestically. Conversely, a loss of power leads to declining living standards and weakened national influence.

This reality has led to consistent challenges to the liberal international order by adversary nations that believe they would benefit more from their own coalition's dominance. Such challenges represent tangible struggles for control over the rules and institutions that shape our material world. The world order, constructed through institutions and alliances and upheld by incentives and punishments, dictates who sets the rules governing trade, technology, and security, and ultimately, who benefits from growth and stability.

Until recently, there had been no serious challenger to global leadership. However, China's rapid technological and economic development, combined with a more isolationist U.S. stance, now poses a significant challenge. The expanding influence of China and its governance model threatens to constrain the ability of the U.S. and its allies to project power and protect their interests globally. As Chinese influence grows, it directly challenges U.S. dominance and, if left unchecked, could undermine liberal interests and values on the world stage.

China's expansion has been facilitated by global fragmentation and U.S. withdrawal from traditional leadership roles. Filling this vacuum, China has adopted and expanded upon the previously-Western strategy of leveraging international financial mechanisms to extend its global influence. The Belt and Road Initiative (BRI), launched in 2013, exemplifies this approach. This massive infrastructure and investment project aims to develop a network of trade routes, ports, railways, and energy projects spanning Asia, Africa, Europe, and Latin America. Through financing and building critical infrastructure in developing countries, China creates economic dependencies that can translate into significant political influence. According to a U.S. Government Accountability Office report, from 2013 to 2021, China provided $679 billion for infrastructure projects in transportation, energy, and other sectors, while the U.S. provided only $76 billion in the same sectors.

China has further strengthened its position by establishing alternative financial institutions such as the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank. These institutions offer developing nations funding sources independent of Western-led organizations like the World Bank and the IMF, reducing their reliance on the U.S. and its allies. This shift enables China to promote its own development models and financial standards, potentially altering regional dynamics and challenging the existing international order.

The effectiveness of these economic initiatives stems from their relationship to coercive power. Claims to power must possess a convincing degree of coercive ability, fundamentally rooted in a country's military and economic capacity to inflict harm or impose significant costs if another nation acts against its interests.  While trade relationships and financial alliances facilitate influence and interdependence, they do not guarantee coercive power on their own. However, when these economic ties are paired with additional coercive mechanisms—such as technological dominance or military strength—they significantly enhance a nation’s ability to resist external pressures and assert its strategic objectives.

States typically create and maintain coercive power through economic dependence, which can form the basis for either sound alliances or stable adversary relations. Economic coercion provides more flexibility than military coercion, which tends to be immediately escalatory and therefore more costly. Historically, the most influential methods of creating economic dependence have involved trade relations, including access to supply chains and foreign markets, favorable trade terms, direct investment, and distribution of energy. A country's stability fundamentally depends on its economic health, as this determines the quality of life for its citizens and their subsequent belief in the legitimacy of the governance system.

Critically, America's economic strength derives from and depends upon its system of alliances and trade relationships. The United States' productive capacity and economic credibility—which underpin the dollar's role as the global reserve currency, enabling higher purchasing power, lower borrowing costs, and economic coercion via sanctions—exist because of its international partnerships. Our technological dominance depends on access to critical minerals: 70% percent of global cobalt comes from the Democratic Republic of Congo, vital for electronics and EVs. Forty percent of world copper is produced by Chile and Peru, with U.S. production meeting just 23% of domestic demand. Seventy-five percent of global lithium resources are held by Chile, Argentina, and Bolivia, while the U.S. produces less than one percent. As the U.S. pulls back from the world, China actively moves to strengthen its influence in these countries. Even our food security relies on allies—80% of potassium fertilizer comes from Canada, affecting U.S. farmers output, supply chains, and consumer prices. This interconnected system of alliances, trade relationships, and shared technological development has created a virtuous cycle that reinforces American economic power while benefiting its partners.

U.S. foreign aid, institutionalized through the creation of USAID in 1961 to counter Soviet influence, is another enduring pillar of America's economic and strategic success. Through agencies like USAID, the United States builds enduring relationships and foreign infrastructure that advance both humanitarian and strategic objectives. The unique structure of USAID, where three-quarters of staff are local hires from recipient countries, creates enduring networks of influence as these individuals often rise to positions of national leadership, from heads of state to ministers of finance. This human infrastructure of relationships and goodwill generates lasting returns on American investment, fostering political and economic ties that strengthen U.S. interests while promoting market economies and building countries’ capacity to participate in world trade. USAID programs prevent political instability by providing food and shelter in vulnerable nations and protect Americans from global disease threats through reporting systems across 90 countries. They also save millions of lives.

If the United States reneges on its trade commitments or, worse, treats allies as adversaries, and withdraws aid from nations that rely on us, it risks driving them into the arms of actual adversaries and undermining our own economic and security interests. Short-sighted actions would weaken not just international partnerships but the very foundation of American economic power and global influence.

The challenge to the global order, and American prosperity therein, thus requires a recognition that American power is not self-sustaining. Power is inherently relational—it exists only in the connections between actors, in the ability to influence others' choices and shape systems. One cannot have power alone, because power is defined by and exercised through relationships. By investing in our alliances, fostering economic partnerships, and strategically deploying development resources, the United States can preserve and strengthen an international order that has generated unprecedented prosperity and stability for us, our allies, and the broader global community.