The Old Order has started to flounder, sparking an existential crisis for the treasured institutions that propped up a predictable but flawed rules-based system. A frisson of fear now ripples through the international community over the outcome of a fierce power rivalry between the United States of America and the new axis shaped by China and Russia. Is the Thucydides’ Trap likely to play out now? The term was coined by the Harvard professor, Graham T. Allison, to describe a perilous situation that emerges when a newly-ascendant power prepares to challenge the existing hegemon. Ever since the US president, Donald Trump, returned to the world stage, he has used a formidable arsenal of tariffs and other instrumentalities of trade to beat back the challenge from China and Russia by coercing a number of nations to accept lopsided terms of engagement with the $30-trillion US economy.
Addressing the World Economic Forum in Davos, the Canadian prime minister, Mark Carney, warned that nations can no longer afford to accept onerous conditions of the hegemon because it will severely undermine their sovereignty, floating the idea of a new coalition of “middle powers” prepared to work their way around prickly issues based on pragmatism and a set of good-faith principles. At its core is the need to blunt any dominant power from using economic and financial leverage to force nations to accept discriminatory agreements. The German chancellor, Friedrich Merz, also urged Europe and like-minded allies to stand together as a new era of great power politics emerges.
Mr Trump and his advisers have been gloating over the manner in which they had sewn up trade deals with the European Union, the United Kingdom, Japan and South Korea after threatening them with escalating tariffs. But Mr Trump alarmed his transatlantic partners when he belligerently laid claim to Greenland. At Davos, the US president backed down from his threat to use military force to capture Greenland but pressed for immediate negotiations with Denmark and NATO to secure full ownership rights ostensibly to protect its national security interests. By doing so, he is normalising territorial usurpation which could then legitimise similar actions by Russia and China. Denmark continues to resist any negotiation for a sale but may be prepared to consider a broader security arrangement without ceding control. The disintegration of the rules-based trading system could spark a global free for all. There will be no winners; nations that do not become vassal states of a major power will likely turn into fortresses with very unpleasant consequences. India, one of the few nations that have held out against Mr Trump’s threats, must take note of these shifts.
