For almost 80 years, the United States has reigned supreme as a world power, a necessary ally for any country looking to succeed in global growth. Yet, as the first quarter of 2025 draws to a close, a transformative era in the global economy is dawning and the longstanding view of US leadership as essential for prosperity faces serious challenges. Recent trade strategies, particularly those implemented during the current Trump administration, coupled with the rising influence of developing nations, is signaling the end of the current World Order. This World Order, led by the West with the United States on the top, is now being pulled apart from within. The United States risks learning a hard lesson of history: the world can live without its greatest power. The graveyard is rich with empires - British, Mughal, Qing, Roman – that fell as the world grew without them.
Tariffs: Protectionism Prone to Pitfalls
Over the past fifty years, the United States utilized tariffs sparingly. The strength of the United States economy and the influence of United States companies abroad over that period negated the need for tariffs, as they would be detrimental to United States companies and economy. Yet, beneath the surface, political challenges lurked. Changing dynamics in globalization, technological innovation and market forces created a decline in American blue-collar jobs and an increase in foreign jobs for the same positions. To attempt to combat the decline in American blue-collar jobs, the Trump administration and the populism it represents introduced a wave of tariffs focusing only on the foreign factor variable of the decline of those jobs, significantly altering historic United States trade policy. Aimed at protecting American jobs, these tariffs are provoking retaliatory actions from other nations.
The results are a complicated web of effects extending through global markets, leading countries to reassess their trading relationships. For instance, after the United States imposed tariffs on Canada and Mexico, they sought alternative alliances around the world. As a direct consequence, Canada pursued deeper trade ties with countries in the European Union, highlighting a pivot away from reliance on United States market. If coerced, countries will find new markets and friends. United States based companies may find obstacles where there once stood open doors. The United States is walking a tightrope with tariff use, and one wrong step could be detrimental in the long term.
The Growth of Clean Energy Risks the Demise of United States Energy Superiority
Using tariffs as a protectionist strategy is not the only potential pitfall for the United States global dominance. The clean energy sector serves as a compelling illustration of how global economic progress can occur without United States dominance. Nations worldwide are investing significantly in renewable energy, with global investments in renewables expected to hit $1 trillion annually by 2025 (with the US accounting for less than 20% of the total). This transition offers myriad benefits, such as job creation and enhanced energy independence with lower long term energy costs.
European countries have emerged as leaders in wind and solar energy production. Germany's renewable energy sector now employs over 350,000 people, demonstrating the economic potential of green technologies with the added benefit of creating much needed domestically produced energy. Instead of threatening and blocking Chinese firms, a strategy employed by the United States, European nations have invited Chinese firms to invest in Europe because of economic concerns. Assembly plants for EVs and battery parts are now building across Europe with Chinese investments, creating new business relationships and markets. As the clean energy sector continues its growth, these relationships will deepen, allowing more investment in renewables and storage. United States energy influence stagnation, based on browbeating, is palpable as the rest of the world continues its growth in clean energy relationships. Countries will work with those they respect, even if they have ideological differences.
The United States administrative policies attempted to squeeze China, yet China withstood the attempts, creating millions of jobs both domestically and globally by setting up manufacturing plants for EVs, batteries and solar panels all while avoiding the US markets. China is benefitting both geopolitically and economically as they find new markets. The world is not waiting for the United States to “approve” energy investments, as cheap renewables have decreased the power of fossil fuel producers such as the United States. The United States dominance in oil and gas once allowed influence over energy investments worldwide. Now, with clean energy cheaper than fossil fuels in many portions of the world, the world no longer requires the United States favor. The clean energy momentum exists despite waffling from the United States, as market forces are stronger than any one country illustrating that even the largest economy in the world does not call the shots.
Power Transitions Potentially Giving Rise to a New World Order
Power is fluctuating globally, and countries such as China and India are no longer just emerging powers; they are defining the new norms in the global economy. As the United States steps back to more protectionist actions, those countries are stepping up to fill the void left behind. They are beholden to no power and are creating a new multipolar world order. Indonesia, South Africa and Brazil are no longer looking to align with a single power block but are looking to favorable markets for their investments. As the United States retreats and the West waffles, a nascent New World Order is forming.
Europe and the rest of the world are not waiting for guidance from the United States. They are moving on. While the United States will, for the foreseeable future, hold a vital role in the global economy, the evidence points to a rapidly changing world. The convergence of changing trade policies, emerging economic leaders, and the rise of new technologies around the globe indicate a future where United States leadership is not the only path to prosperity. The dominance held by United States based companies may be waning, as foreign companies begin to rise to the top.
Recent decisions suggest that US leadership is taking its “pole” position for granted. Yet, countries can now cultivate their own economic pathways. The United States may want to tread carefully lest the world leaves it behind as it has left behind many other great empires of history. It is often assumed that any New World Order is created out of conflict but sometimes it is created out of neglect by the incumbent leading the World Order.
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