The End of the Postwar Order
The international system that has governed global affairs since World War II is collapsing, according to prominent world leaders and analysts. At recent gatherings in Davos and Munich, political figures delivered stark warnings about the disintegration of the rules-based order that has underpinned western security and prosperity for nearly eight decades.
A Rupture, Not a Transition
Canadian Prime Minister Mark Carney captured the mood at Davos last month when he declared that "the world order underwritten by the United States, which prevailed in the west throughout the postwar era, was over." The organizing principle that emerged from World War II's ashes—that economic interdependence would promote peace by knitting nations' interests together—has been shattered by American actions.
Donald Trump's administration fundamentally rejected the premise that had guided American foreign policy for generations. The president came to believe other countries were taking advantage of American generosity, "free riding on its security guarantee and abusing its open market." This perception has led Washington to dismantle key elements of the international architecture it helped create.
Carney challenged nations to accept the loss of American leadership and build alternative structures, warning that "great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited."
European Realization of Isolation
The analysis has spread rapidly through international circles. German Chancellor Friedrich Merz opened the Munich Security Conference weeks later by arguing that "the international order based on rights and rules is currently being destroyed." He warned that "the leadership claim of the US is being challenged, perhaps already lost."
European leaders have begun acknowledging they must face global challenges without reliable American partnership. French President Emmanuel Macron declared that "Europe has to learn to become a geopolitical power," while British Prime Minister Keir Starmer emphasized that Europeans "must build our hard power, because that is the currency of the age. We must be able to deter aggression, and yes, if necessary, we must be ready to fight."
The Search for Alternatives
But what replaces the old order remains profoundly uncertain. Carney posed the fundamental choice facing nations: "Compete with each other for favor, or combine to create a third path with impact." However, building institutions to support an alternative liberal order based on shared values appears extraordinarily difficult, if not impossible.
Former Mexican Foreign Minister Jorge Castañeda expressed skepticism about Carney's proposal, stating bluntly: "What Carney proposes is not viable." He doubts many countries possess the resources to explicitly decouple from Washington's preferred trajectory.
Nevertheless, nations are attempting various uncoordinated efforts to protect themselves in this more dangerous world. New trade agreements and strategic partnerships of uncertain stability are emerging globally. Discussions about financial decoupling from the dollar have intensified, with both Brussels and Beijing promoting their currencies as alternatives.
The American-Led Order's Legacy
Despite its flaws and hypocrisy, the American-led order provided valuable global public goods. These included rules and dispute mechanisms supporting a liberal global economy that generated unprecedented prosperity, the dollar as a global exchange medium, low-risk treasury bonds for wealth storage worldwide, and a collective security regime that managed conflicts from the Balkans to the South Pacific.
Losing American leadership means losing these benefits. As NATO chief Mark Rutte noted bluntly: "If anyone thinks here, again, that the European Union, or Europe as a whole, can defend itself without the US, keep on dreaming. You can't. We can't. We need each other."
China's Ambivalent Position
China shows little interest in assuming America's former role as global hegemon protecting a liberal multilateral order. The Asian giant contributed to the current crisis through export policies that fueled American grievances against globalization, yet demonstrates no willingness to make the sacrifices required for global leadership.
Beijing appears content to watch the western-built institutional architecture implode, perceiving it as hostile to China's form of government and national interests regarding Taiwan and the South Pacific.
A World of Transactional Alliances
In the absence of clear leadership, the world risks fragmentation into competing spheres of influence. Finnish President Alexander Stubb, cited approvingly by Carney, argues we live in "a new world of disorder" comparable to historical watersheds like the world wars and the Cold War's end.
Stubb believes the next five to ten years will shape global order for decades, preferring a values-based multilateral system less hypocritical than its predecessor. Achieving this would require rebuilding postwar institutions like the UN, IMF, World Bank, and WTO to reduce western dominance and increase global south representation.
However, success depends on American willingness to participate in a multilateral order where it exercises less unilateral power—a prospect that appears increasingly unlikely.
The Cost of Disorder
The emerging world will differ fundamentally from the postwar vision where economic interdependence promoted shared prosperity. Future decades will see opportunity-seeking balanced against vulnerability fears, potentially stunting trade, tempering investment, raising business and consumer costs, and limiting entrepreneurs to domestic opportunities.
The world stands to lose economies of scale and common risk insurance, forcing nations to seek protection against economic, environmental, health, and security threats largely alone. As Carney noted, quoting Thucydides, we may be entering an era where "the strong can do what they can, and the weak must suffer what they must."
History suggests a world of roaming great powers is neither safe nor prosperous. Despite its flaws, rules-based multilateralism and cooperative problem-solving offered superior methods for organizing global affairs. That ship appears to have sailed, leaving nations to navigate uncharted waters where power prevails over cooperation, and no clear order emerges from the chaos.
