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A new geoeconomic imbalance awaits a new geopolitical equilibrium. Using the power of a US$30 trillion economy, and just one month in office, the United States President Donald J Trump is rewriting the rules of international engagements. Reciprocity is the underlying vocabulary, return to a glorious past is the grammar, and straight-talk is the outer manifestation. For reciprocity, tariffs are the currency. The glorious past mirrors what Xi Jinping’s China and Vladimir Putin’s Russia are already doing. The sole difference is simultaneous straight talk with domestic constituents and the international community.
Effectively, Trump is leveraging the power of the US economy to coerce the rest of the world to serve American interests. Other than a shift in stance from the covert to the overt, this is not new. The US grand strategy has always used power economic, power diplomatic, power strategic, power military, and power informational to push its domestic interests and shape global agendas. From the United Nations Security Council and North Atlantic Treaty Organization on security to the World Trade Organization (WTO), and Bretton Woods institutions on creating global public goods, the US has shaped world events while pursuing its national interests.
Trump is leveraging the power of the US economy to coerce the rest of the world to serve American interests.
In 2025, under Trump, this seems to be changing. When the WTO was formed three decades ago, on 1 January 1995, countries committed to classification schedules and made tariff commitments. In the case of India, even today, there is no item where it is imposing any tariff higher than what has been committed. these three decades, India’s Gross Domestic Product (GDP) has jumped from US$360 billion to US$4 trillion, extreme poverty has ended, and it is looking at a per capita income of US$20,000 by 2047. Likewise for China, whose GDP has increased from US$734 billion to US$19 trillion, Mexico from US$380 billion to US$1.8 trillion, and Canada from US$605 billion to US$2.2 trillion. Trump probably sees that the commitments of 1995 are irrelevant in 2025 and hence the case for reciprocity.
But it is not merely trade or GDP that has changed. Even the texture of trade has morphed. The rise of China as a manufacturing monolith has impacted the direction of trade. Not only is China the top trading partner to more than 120 countries, the change has accentuated between 2001 and 2018. Were it not for Xi Jinping’s aggression through technological intrusions, notably using Huawei and ZTE for 5G infrastructure, and bullying smaller countries in the South China Sea, this trajectory would have carried on. Its debt trap diplomacy or wolf warrior diplomacy hasn’t helped. In fact, under Xi, Beijing has lost all the goodwill necessary to engage in trade and investments. From Australia to the US and India to the European Union, the conversations either surround decoupling or derisking from China. If Trump raises the pitch against trade through tariff wars and Xi doesn’t, trade will further skew towards China.
The rise of China as a manufacturing monolith has impacted the direction of trade.
As far as defence goes, Trump’s dictate to Europe to pay for its own security tramples on the last bastion of a continent that is lost in the vices of political virtue signalling. With Russia remaining the continent’s second-largest supplier of gas, which increased by 11 percent in the first half of 2024, all it has done is make noises of disapproval at conferences and write self-adulatory reports. The divorce from Russian gas hasn’t moved. It has been unable or unwilling to walk its talk. For all its finger-pointing and moralising, Europe stands exposed as a continent that preaches values, fears being wrongly labelled, smothers free speech, bows before barbaric immigrants, but bullies its peace-loving citizens—and doesn’t even pursue its own interests.
Enter Trump
What Trump is saying is this: the world has benefited from America’s growth and largess and it’s time to turn that generosity into a weapon of mass dividends. In other words, turn past engagements around security, trade, and investments into present deals of protection, tariffs, and returns. A quid-pro-quo through complex deals is replacing the central theme globally, the highest profile being the one around security cover and economic costs for Europe that’s making the continent weep in frustration, which European leaders typically applauded. He has imposed higher tariffs on imports from Mexico, Canada, and China; he has told India that America will not tolerate unfair trade practices. Within borders, Trump’s repeat motif is accountability, through DOGE (Department of Government Efficiency) or on US Agency for International Development (USAID), for instance. The two—national and international actions—are working in tandem.
A quid-pro-quo through complex deals is replacing the central theme globally, the highest profile being the one around security cover and economic costs for Europe that’s making the continent weep in frustration, which European leaders typically applauded.
This may shock the naive but the smoke signals of mega-disruption were clear long before Trump won the US elections and started his second term as the country’s 47th President on 20 January 2025. What he has done is to turn the game of victimhood on its head and weaponise it against allies and adversaries alike. His actions have blurred the line between friends and enemies. Everything and everyone is one deal away from what Trump thinks is good for the American people. To that extent, he has hyphenated the Washington D.C. relationship with Brussels, EU, and Beijing; Moscow and Kiev, Jerusalem and Hamas; Ottawa and Mexico City, and New Delhi into a series of transactions. He is also pushing the boundaries of power in Panama and Greenland, to manage Chinese and Russian presence there.
Grand loudspeaker for old strategy
Perhaps Trump is merely doing what his predecessors have done—command power. With one difference: instead of protecting the entitled or financing the ‘dead’ with social security, he is focussing on increasing US jobs and attracting investments. His grand strategy articulation is not lurking in the dark corners of the deep state; it is in your face, whether you like it or not. It is the first public articulation of how he defines America’s national interests and next the execution of those goals.
Trump has yanked them out of the dark shadows where they thrived without accountability and placed them before the world openly, brazenly, and disruptively.
The confrontation with Russia’s or China’s grand strategies is in the way he pushes it, melding domestic political support for external actions. Neither of the three—the US, Russia or China—is guilt-free in breaching international norms. China has been and continues to be a major violator of trade and closed markets; Russia of electoral interference; and the US of serial regime change operations. Until 2025, these were implied—they were accusations, and they were covert operations. Trump has yanked them out of the dark shadows where they thrived without accountability and placed them before the world openly, brazenly, and disruptively. And this is just his first month in office, setting the tone of the conversations that will unfold over the next 47 months.
Gautam Chikermane is Vice President at the Observer Research Foundation.
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