In a remarkably short time, the second Trump administration has upended many of the precepts that have guided international order since the end of World War II. President Donald Trump has rapidly redefined the U.S. role in NATO while questioning U.S. defense guarantees to Europe and Japan and even intelligence sharing with its Five Eyes partners: Australia, Canada, New Zealand, and the United Kingdom. At the United Nations, the United States has sided with Russia and other erstwhile adversaries, such as Belarus and North Korea, and against nearly all its traditional democratic allies. European officials, scrambling to react, have begun wondering whether they need to develop their own nuclear deterrents and whether Washington will continue to maintain U.S. troops on the continent.
Yet just as important as these security considerations is the administration’s rejection of the treaties, organizations, and economic institutions that the United States has done so much to shape. On the first day of his second term, Trump issued executive orders to withdraw from the UN Paris climate accord and the World Health Organization and imposed a 90-day pause on all delivery of U.S. foreign aid. In early February, he ordered a sweeping 180-day review of all international organizations to which the United States belongs and “all conventions and treaties to which the United States is a party.” And more aggressive moves may be coming: Project 2025, the Heritage Foundation’s blueprint for the second Trump administration, which has anticipated many Trump policies, calls for a U.S. exit from the International Monetary Fund (IMF) and the World Bank, cornerstones of global development and economic stability that the United States has for decades guided with a firm hand.
From all this it may be easy to conclude that the postwar order is falling apart. By renouncing U.S. leadership, the Trump administration appears to be marking the end of American primacy and benevolent hegemony. As the historian Robert Kagan and others have argued, in the absence of the American superpower, a chaotic jungle may emerge. Of course, it is possible that the Trump administration could use raw power to undermine global stability and enable the United States, China, Russia, and others to carve out their own spheres of influence. In such a world, wars might be more frequent, and previous close allies of the United States, whether in Europe or Asia, could be vulnerable to outright coercion. Yet it is not preordained that this kind of breakdown will occur. The old order may well be disappearing, but whether that leads to chaos and conflict also depends on the many other countries that have until now upheld the institutions on which it has rested.
There are many ways that interstate cooperation can continue to be effective without U.S. leadership and even act as a restraining force on unilateral moves by Washington. But for that to happen, core members of the postwar order, including European countries, Japan, and other partners in Asia and elsewhere, must preemptively join together to reinforce cooperation with one another. They cannot afford to wait and see, with the risk that some might peel away. The Trump administration is moving fast to reset what the United States wants and bypassing long-established multilateral arrangements to get it. Other countries must move just as fast to protect and build on those structures, which they will need now more than ever.
SUPPLY AND DEMAND
In standard accounts of international relations, order requires a powerful hegemon that is prepared to use its dominant military and economic power to uphold the rules, norms, and institutions that govern interactions among states. This understanding—known as hegemonic stability theory—is often invoked to explain the breakdown of order in Europe in the 1920s and 1930s, when no country was both willing and able to underwrite cooperation: the United Kingdom was willing and the United States was able, but neither was both. By contrast, after World War II, the United States, driven by the global threat of communism, had both the will and the capacity to enforce order. Applied to today’s world, the theory suggests that a U.S. withdrawal from the international treaties and organizations it helped create would cause a collapse of order.
As the political scientist Robert Keohane pointed out in the 1980s, however, hegemonic stability theory looks only at the “supply side”: the willingness of a powerful country to supply the conditions for cooperation. But the demand side matters, too. Many countries, including the vast majority that lack dominant power, support various forms of multilateral cooperation to secure their own interests. That demand exists because in a world rife with competition, uncertainty, and conflicts, most countries recognize that ad hoc deal-by-deal diplomacy is unlikely to succeed. Such deals will tend to favor strong powers and thus lead to the kind of coercive behavior Trump has already used against weaker countries such as Canada and Mexico. As a result, even in the absence of a hegemon, countries may seek collective institutions to pool their power, build a bulwark against instability, and capture the mutual gains that occur when a modicum of cooperation is achieved. This insight suggests new possibilities for order without the United States.
In fact, multilateralism without a hegemon has a long history in Europe. At the Congress of Vienna in 1814–15, the European powers convened to create a rudimentary order. What emerged was the Concert of Europe, a group that would come to include Austria, France, Prussia, Russia, and the United Kingdom. Although the United Kingdom had great naval and economic strength at the time, it did not have hegemonic power over the continent. Rather, a combination of diplomatic cooperation and a balance of power kept order until the Crimean War and the unifications of Germany and Italy disrupted it. A yet older example of such cooperation is the Hanseatic League, the confederation established by northern European cities in the thirteenth century to protect and promote their trading interests. Highly successful, it flourished for hundreds of years.
Multilateralism without a hegemon has a long history in Europe.
Since World War II, although Washington has occupied a hegemonic role in the overall order, there have been several prominent examples of demand-driven cooperation among groups of countries that do not include the United States. Take the European Union. Even in the face of U.S. apprehensions about protectionism, European countries successfully organized their economies as one large, powerful bloc. As a result, Europe has strong and durable institutions, including collective financial resources, such as the European Central Bank and the European Investment Bank, which now have major influence in international affairs. And as European countries scale up public investment to respond to the world’s overlapping crises amid volatile changes in American foreign and trade policy, the euro could provide an attractive alternative to the U.S. dollar as a global reserve currency.
Another prominent example of interstate cooperation without a hegemon is the Organization of the Petroleum Exporting Countries, a group that includes the major oil producers of Africa and the Middle East, as well as Venezuela. Since its establishment in 1960, OPEC has suffered defections, internal price wars, and regular cheating on its quota limits, but it has nonetheless empowered a group of resource-rich countries without strong armies or diversified economies to sway global affairs and generate leverage in capitals around the world. Since Russia’s invasion of Ukraine in 2022, the group has successfully coordinated production quotas among its own members and the ten other countries that form OPEC+ to stabilize and sustain high oil prices, furnishing its members more than a trillion dollars in gross revenue.
A looser form of demand-driven multilateral organization is the BRICS+ group of countries. Founded in 2009 by Brazil, Russia, India, and China, BRIC (as it was known then) has since grown to ten members. Although some have dismissed it as an ineffectual attempt to provide an alternative to Western-dominated international financial institutions, the group is held together by a shared interest in reducing risks. For example, many BRICS+ members worry that their reliance on the U.S. dollar and U.S.-led international institutions makes them vulnerable to coercion and sanctions. They have created institutions that they hope will make them more resilient, including the New Development Bank, which by the end of 2022 had approved more than $32.8 billion in loans for 96 projects in BRICS+ countries and other emerging economies.
Each of these cases illustrates that countries that have common interests or a need to protect themselves against shared risks can make effective arrangements on their own. If the Trump administration decides to withdraw from international institutions, renege on U.S. commitments, and ignore established norms of diplomacy, that does not mean that other countries cannot create and sustain frameworks for negotiation and agreement. Indeed, there are several pathways by which the world could transition from U.S.-led institutions, treaties, and alliances to ones shaped by other countries.
BUILD BANK BETTER
Among the most promising areas in which the rest of the world can sustain multilateral cooperation without the United States is international development. When the United States began erecting the postwar economic order at Bretton Woods in 1944, key pillars included the creation of the IMF and the World Bank and, subsequently, the designation of the U.S. dollar as the world’s reserve currency. From then on, U.S. policy dominated both institutions and the way they managed economic crises. But the second Trump administration has already shown its hostility to many international institutions, and some policy analysts close to the president have called for a dramatic reduction of or even an end to U.S. support for the IMF and the World Bank.
If Washington takes such extreme steps, they need not lead to the collapse of economic order. On the contrary, these moves could provide a spur to other countries to rethink the institutional framework, either by remaking existing organizations or by finding alternatives to them. Consider the World Bank and its lending agencies, the International Development Association, which provides funds to the poorest countries, and the International Bank of Reconstruction and Development, which provides loans and development policy advice to middle-income countries. The IDA’s effectiveness is undisputed: it can sustain aid efforts at a fraction of what it would cost individual countries to do so alone. For every dollar a country puts in, the IDA is able to raise and lend nearly four dollars to countries most in need. The agency can achieve this multiplier effect because it fortifies countries’ direct contributions with international capital market borrowing, repayments from past IDA loans, and profit transfers from the IBRD.
If the United States stopped funding the IDA, however, other donor countries would need to step up fast. In fact, there is a strong strategic incentive for them to do so. For years, the United States, as the largest single donor, has been able to tailor IDA lending to its own interests, supported by the U.S.-led power structure of the World Bank itself. But Washington’s dominance of the IDA has long been disproportionate to its contributions. In the agency’s last replenishment, agreed to in December 2021, the United States contributed a mere 14.89 percent of overall funding, only fractionally more than Japan, which accounted for 14.63 percent. By contrast, the countries of Europe, taken together, contributed more than 50 percent. Other important donors include China at 5.62 percent, Canada at 5.04 percent, and Saudi Arabia at 2.98 percent. If the United States ceased to contribute, other donors would have an opportunity to correct this imbalance and demand more of a direct say in how the agency spent its funds.
Of course, the United States will resist any loss of influence. The Trump administration may well try to ratchet up its control over both the IDA and the IBRD, even as it drastically decreases its own contributions. There is precedent for this: in the 1980s, the Reagan administration reduced U.S. funding to the United Nations, the IMF, and the World Bank while seeking greater control over them. Other countries failed to find an effective way to push back, and the result was yet greater U.S. influence. Similarly, the Trump administration will likely put enormous pressure on the head of each organization and perhaps even on the staff to do Washington’s bidding. The World Bank has already had to warn some of its staff not to travel through the United States after two Colombian staff members had their diplomatic visas revoked and were denied entry into the country by U.S. immigration authorities, as the Trump administration pressed the Colombian government to accept U.S. military flights carrying deportees.
Nonetheless, by acting together, other donor countries have significant leverage of their own. They must not automatically accept any new conditions imposed by the United States or leave the heads of these agencies to fend for themselves. Nor should they simply abandon the bank or let it wither. Instead, these countries must make clear to the Trump administration that the United States can either maintain its influence by contributing or lose it. And they have the tools to do so: according to World Bank rules, if one member fails to meet any of its obligations to the bank—even if it is the most powerful member—a simple majority of other countries, exercising a majority of the total voting power, can suspend that member. This rule has yet to be used.
More drastically, the United States could exit the World Bank entirely, as called for by Project 2025. European states, Japan, and other countries need to prepare for such an outcome now. According to the bank’s founding charter, if the leading contributor to the bank decides to leave, the organization’s headquarters must relocate to “the territory of the member holding the greatest number of shares.” Most likely, this would mean moving the bank to Japan, a step that could set the stage for building a coalition of members more closely involved in decision-making. Under Japan’s leadership, for example, the bank could establish a major branch of the IBRD in the territory of one of the bank’s largest fee-paying middle-income clients, such as Brazil or India; it could also place a major branch of the IDA in Europe, where many of the agency’s largest contributors are located, or in Africa, closer to its major borrowers. Likewise, China could host a major branch devoted, perhaps, to financing sustainable energy. It could sit alongside Beijing’s Asian Infrastructure Investment Bank, which already co-finances extensively with the World Bank.
In short, the inevitable shakeup of the World Bank that would result from a U.S. withdrawal could present an opportunity to strengthen the institution. By properly planning for this scenario, the World Bank’s members can ensure that the bank continues to function and that it sustains its multilateral character. Such a transformation could also become a template for how other international institutions can adapt to an order that is no longer led by the United States.
A FALTERING FUND?
Another major casualty of the Trump administration’s rejection of multilateralism could be the IMF, but the challenges it faces are different from those of the World Bank. For decades, U.S. policy has dominated the IMF, which has provided a place to pool reserves and to manage economic crises in a coordinated way. So dominant was this system in the late twentieth century that by the end of the Cold War, an international monetary and financial order without the United States seemed almost unthinkable. But the world looks very different today, and it is not just the United States that has changed.
For now, the Trump administration seems unlikely to withdraw from the IMF, which does much to protect U.S. interests using other countries’ charges and contributions. In 2023 alone, the United States reported unrealized gains from the IMF—the rise in value of U.S. shares in the fund—of $407 million. But the fund is not as important to other countries as it once was. If the Trump administration decided to reduce U.S. contributions to the IMF while exerting greater control, other members would not have to remain beholden to it. Instead, they could draw on and expand a number of emerging alternative structures that carry out many of the same functions as the IMF.
In a world that depends less on the dollar, the United States has less influence.
For one thing, many countries now have substantial foreign exchange reserves, which offer insurance against external shocks and can provide foreign currency to their own banks if they come under stress. By the end of 2018, total foreign currency reserves held globally had increased tenfold compared with 30 years earlier; two-thirds of those reserves were held by emerging and developing countries. Moreover, in building these reserves, many countries are relying less on the U.S. dollar. The proportion of foreign exchange reserves held in dollars has declined from around 71 percent in 1999 to 57 percent in 2024, as countries seek yields in easy-to-trade currencies such as the Australian dollar, the Canadian dollar, Chinese renminbi, South Korean won, the Singaporean dollar, and the Nordic currencies. The shift away from U.S. dollars could rapidly accelerate if the Trump administration acts on a trade policy document written by the economist Stephen Miran shortly before he became a senior adviser to the president, which appears to endorse the idea of forcing foreigners to convert their five- and ten-year U.S. Treasury bonds to 100-year securities bearing low interest rates; or on White House adviser Robert Lighthizer’s suggestion that the United States tax foreign purchases of U.S. treasuries. A world that depends less on the dollar and less on the IMF is a world in which a unilateralist United States will have less influence.
A second line of defense to a weakened IMF is the growing use of currency swap agreements. CSAs call directly on another country’s central bank for assistance in the event of a crisis. By 2024, China’s central bank had signed 40 bilateral swap agreements, 31 of which were in force with a total value of about $586 billion. Brazil signed swap agreements with Argentina, in 2008, worth $1.8 billion and with China, in 2013, worth $30 billion. India has concluded CSAs with more than 25 countries, in most cases prioritizing countries with which it runs a current account deficit. CSAs have often been precursors to broader agreements among countries. Since their introduction in 2009, China’s swap lines with Argentina have facilitated Chinese investment in Argentina’s strategic infrastructure.
Equally important is the emergence of regional institutions that replicate many of the IMF’s crisis-assistance roles. The Latin American Reserve Fund, or FLAR, evolved in the 1980s, offering financial support to countries in the region facing a balance-of-payments crisis. Similarly, in 2000, in the wake of the East Asian financial crisis, members of the Association of Southeast Asian Nations came together with China, Japan, and South Korea to create a multilateral currency swap arrangement known as the Chiang Mai Initiative, which they have subsequently strengthened. A decade later, during the eurozone crisis, European countries established their own regional arrangement—what is now called the European Stability Mechanism. In 2014, BRICS created a Contingent Reserve Arrangement, which offers financial support in a crisis or anticipatory loans to avoid a crisis. And in 2025, the African Development Bank announced the creation of the African Financial Stability Mechanism to provide concessional refinancing—offering access to capital on favorable terms—to countries in crisis. Most of these arrangements have some link to the IMF, but each is also performing substantial forms of regional governance on its own.
SAFETY IN NUMBERS
In addition to upholding institutions that support economic order, countries can respond to a renegade hegemon by reshaping multilateral political forums. For decades, the United States has used a variety of groupings, including the G-7 and, in the twenty-first century, the G-20, to bring leaders together to shape collective responses to global problems. The G-7 emerged in the 1970s when the leaders of France, the United Kingdom, the United States, West Germany, and, subsequently, Canada, Japan, and representatives of EU institutions came together to manage new economic shocks. The broader G-20 emerged in 1999 and went on to play a key role in containing the 2008 financial crisis, orchestrating a global response and guiding the actions of various multilateral organizations to address the economic fallout. Overall, the G-7 and the G-20 have played key roles in forging mutual understanding and cooperative solutions.
But the Trump administration has expressed deep skepticism of both groups. In his previous term in office, Trump took the unprecedented step of refusing to join fellow G-7 leaders in the traditional joint communiqué issued at the end of a summit. Since returning to the White House, he has also directly contradicted other G-7 members by announcing a desire to bring Russia, a country that is under extensive Western sanctions for its aggression in Ukraine, back into the group. (Russia took part in G-7 meetings from 1998 until 2014, when G-7 members disinvited it because of its annexation of Crimea.) Trump has been equally critical of the G-20, refusing to send U.S. representatives to the G-20 meetings of foreign and finance ministers in Johannesburg in February 2025. In explanation, U.S. Secretary of State Marco Rubio cited both the Trump administration’s hostility to South Africa and a desire not to “coddle anti-Americanism.”
With the United States increasingly absent, other countries must now step up to reshape these groups, including planning meetings potentially without the United States. In fact, the G-7 has often had a somewhat elastic membership, sometimes meeting in smaller groupings, as when five core members met in 1985 to sign the Plaza Accord to depreciate the U.S. dollar against other leading currencies, or inviting select guest countries to take part. Similarly, the G-20 has regularly invited additional attendees. This flexibility suggests a way forward if the United States withdraws or seeks to hobble these forums.
To be effective, a new group would need to include countries with substantial economic and/or military power, such as Brazil, Canada, China, France, Germany, India, Italy, Japan, Saudi Arabia, South Africa, South Korea, Turkey, and the United Kingdom. Members must also have a strong commitment to existing multilateral organizations, which would exclude Russia and the current U.S. administration. Of course, the exact membership would require careful consideration. The inclusion of China in particular would present a dilemma for countries that regard China as an adversary.
China has quietly increased its role in multilateral agencies.
As many countries see it, the growing contest between China and the United States is not only for control over markets and technology but also over who controls the rules of the game. The United States has enjoyed enormous influence over international rules and norms through its position in multilateral institutions. After all, it created these agencies after World War II with loyal junior partners in Japan, the United Kingdom, and Europe. China, by contrast, has had to build up its influence elsewhere through bilateral diplomacy and by setting up multilateral institutions of its own, such as the Asian Infrastructure Investment Bank.
But the Trump administration is now relinquishing its influence over the multilateral system, preferring instead to handle countries one by one, transaction by transaction. In so doing, it is thrusting China to the fore, and Beijing seems well prepared. It has quietly increased its role in multilateral agencies, becoming the third-largest shareholder in the IMF and the World Bank. And it has seized opportunities to publicly advocate for the World Health Organization and the World Trade Organization at a time when the United States has shown antagonism toward both. Like all powerful states, China relentlessly pursues its own national interests and participates in multilateral institutions as the best way to secure those interests in the long term. For other countries, this coincidence of self-interest and multilateralism—previously a defining characteristic of U.S. hegemony—is vital for sustaining international cooperation. Of course, it also raises the question of whether China in turn will become hegemonic. The answer to that will depend on how actively other countries press for and act on their own demands for cooperation.
Regardless of its exact membership, a new group would need to convene at speed. The United States is due to take over the leadership of the G-20 in December 2025, and other members cannot assume that the group will continue to function as it has in the past. Perhaps the longest-serving members of the original group—the governments of France, Germany, and the United Kingdom—could consider convening a selection of members of the EU, the United Kingdom, and some members of BRICS+ in the intervening months, as a way of laying the groundwork for possible further shifts ahead.
BRAVE NEW ORDER
With the Trump administration’s stark rejection of multilateral rules, norms, and institutions, the postwar order shaped by U.S. leadership is disappearing. But other countries do not have to be passive bystanders. European countries, Japan, and other major allies of the United States, along with potential new coalition partners, have several options. They can step up and replace the U.S. role in existing institutions, as in the case of the IDA and the World Bank. They can find alternative ways to perform some of the same functions when institutions become fundamentally weakened. And they can build new coalitions that are willing to sustain cooperation and support collective crisis management, creating what might now be a G-9 or G-12.
The institutional order that emerges from this upheaval will be unlike the U.S.-led one that has been in place for more than eight decades. There will be serious new risks, and the presence of a hegemon that has largely withdrawn from international arrangements will pose far-reaching challenges. But taken together, the broad group of countries that continue to support global institutions and multilateralism—a group that could span from Europe to much of Asia, Latin America, and the Middle East—will represent a large chunk of global GDP and will be backed by significant military power. And by rebuilding or recrafting the institutions that matter most, they can do much to maintain stability, address global problems, and protect their members against crises. If they do not, many countries may find themselves more exposed than ever, scrambling to protect narrow, short-term interests without leverage or influence in a more dangerous world.
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