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Asia and Europe Weigh the Unintended Consequences of American Decline

“By punishing his longtime allies with tariffs, Donald Trump is encouraging other nations to form trading blocs and networks that exclude the United States”. Whilst the New York Times treats the issue polemically, it constitutes an important strand of reflection in European and Asian assessments.

The duties are a “declaration of economic war”, according to Le Monde. A rapid, temporary negotiating truce followed, with tariffs suspended in exchange for tactical concessions from Canada and Mexico. Whilst the “bluff” may have yielded some transitory results, a “permanent instability” is settling at the heart of American affairs. Unpredictability as a weapon is the strategy with which the new presidency intends to tackle, and perhaps even temporarily reverse, American decline. This, though, comes at the cost of compromising the United States” credibility as the guarantor of the old order and the network of alliances which, notwithstanding the transformation of its relations with Europe and Japan in the midst of rearmament, the US itself employs to confront China.

Hence the difficulty in interpreting the new executive’s rigmaroles and its hasty approach to the most intricately knotted power relations, starting with the wars of the crisis in the world order in Gaza and Ukraine. In order to assess the protectionist threats, and the extent to which they will actually affect its allies, we will have to evaluate the real extent of the tariffs in the coming months. In any case, in Brussels and Tokyo, but also in Beijing and among Washington’s own political currents, America’s coercive moves are being carefully weighed: it would not be the first time that a unilateral American sortie ends up accelerating the multipolar trends it sought to counteract, according to the law of unintended consequences.

The “Nixon shock”, the unilateral suspension of dollar convertibility in 1971, is the most frequently analysed precedent, as it entailed the imposition of temporary generalised tariffs at 10%, intended to push the other powers into rapid monetary accommodation. That coercive move spurred the process that eventually led the Old Continent to the euro, via the “snake in the tunnel” system of exchange rates and then the EMS, the European Monetary System. In the process, as early as 1975, the US had to recognise the need to rebalance its global relations, co-opting Europe and Japan into the unofficial “directorate” inaugurated in Rambouillet, first as the G5 and then G7. America, weakened by Vietnam and Watergate, could not guarantee the post-war order on its own.

The Reagan rearmament in the 1980s responded to the same multipolar dynamic, wielding the military card against Germany and Japan, but exhausting the USSR to the point of its implosion, with the result of facilitating German reunification. In Asia, the Plaza Accords, followed by the failed idea of an Asian Monetary Fund in the 1990s, marked the beginning of Japan’s lost decades, but with the rise of China lurking in the background. The Russian collapse and Nixon and Kissinger’s opening to Beijing favoured the Dragon. George W. Bush’s “war of choice” in 2003 seized the energy artery, once again, to prevent the European unification process and, indeed, contain China; but even that unilateral response led to unexpected strategic outcomes, from the disastrous US withdrawal from Iraq and Afghanistan to the Dragon’s entry into the power games of the Persian Gulf.

It was Europe that had to pay the heaviest price, and this is the heart of the matter: the American intervention, against the Chirac-Schröder opposition to the 2003 war, cut through the EU like a “knife through butter”; the progress of European centralisation, at least on the crucial terrain of foreign and defence policy, remained frozen for over two decades. As a result, America’s actions offloaded some of the Chinese challenge into Atlantic relations, and this strategy may become an object of contention again with the new presidency. The same line of thought can be applied to the asymmetrical alliance with Japan.

The point is this: the unintended or misguided results of the White House’s actions, and its convulsive handling of the relative decline, may fall unequally on the other powers, and thus change their relative costs and benefits in the context of the crisis in the world order. To what extent this will ease or rather exacerbate the disintegration of the old multilateral arrangements is an open question; however, the reaction of the other imperialist powerhouses, which may be pushed into their own economic, political, and military rearmament by American unilateralism, should also be factored into the calculation of the final outcome.

One can think of European defence, where the war in Ukraine has forced it to deal with issues that had been at a standstill since the 1990s, or the Draghi Plan’s counter-offensive on competitiveness. In Europe and Asia, US imperialism has been “protecting” its allies for decades, precisely to prevent them from rearming, or at least from achieving a greater degree of strategic-military autonomy: how considered is the blithe demand for them to now look after themselves?

The New York Times cites Europe as an example that illustrates the powers” countermove: brandishing the defence of multilateralism as a weapon in order to expand their own relations and safeguard against American unpredictability. On the one hand, in the American hemisphere Europe has tightened ties with Mercosur and Mexico; on the other, the US press looks on with concern at London’s attempts to repair relationships torn apart by Brexit. The shift in the mood across the Channel is evidenced by the swift reaction of the Eurosceptic British media and, according to Le Monde, by a “rapprochement” on defence, with practical implications for European discussions, from industrial policy to the financing of military expenditure.

Speaking at the Davos forum, Ursula von der Leyen exploited the spaces opened up by American economic nationalism: “As great power competition intensifies”, Europe declares itself “open for business” and turns to India and China. With the Dragon, Brussels could seek a realistic negotiation, in some respects retracing the routes left open by the Comprehensive Agreement on Investment (CAI), which stalled in the European Parliament in 2021. However, New Delhi will be the new Commission’s first overseas stop. It is clear how the European initiative uses the commercial and economic terrain to counterbalance or limit American intemperance: “This new engagement with countries across the world is not only an economic necessity but a message to the world. It is Europe’s response to rising global competition”. This goes hand in hand with the formula coined by EU Council President António Costa, of “Europe as a pole of attraction”, aimed at the emerging powers, as well as at Great Britain and Japan.

Cui Hongjian, of the Beijing Foreign Studies University which trains diplomatic staff, provides one of the most accurate assessments of the European balance. In his opinion, von der Leyen “played the China card” in two directions: towards America, to push it back to a more pro-European policy, and towards China, to entice it with areas for cooperation. The adjustment would, however, be “tactical”, and not yet “structural”, as European margins for manoeuvre are in practice limited. The trilateral relationship between the US, EU, and China is becoming more complex. Trump could bolster Sino-European ties, but this will depend on the degree of coordination possible between America and Europe; so far, Atlantic friction has prompted the EU to “review its strategic balancing act between China and the United States”.

China has responded with restraint to the US tariffs, reserving the right to negotiate on a more psychologically equal footing. The Chinese multilateralist line turns to Europe, claiming leadership of multipolar tendencies against the vain ambitions of “a new form of American primacy”, but this does not preclude a parrying response to the revision of the order initiated by the American Sonderweg — the “solitary road” — leaving Washington with the burden of breaking down international institutions and norms.

In Beijing, according to Wang Wen of the Chongyang Institute, Trump is referred to as “Chuan Jianguo”, the one who helps build a stronger China: during his first term, he helped shatter illusions about America, accelerate Chinese technological innovation and deepen Chinese trade with other countries.

By the same logic, we might add, Brussels could think about European rearmament and ties with India, China, and Japan.

In Tokyo, the European line might be welcome, due to a stronger strategic.consonance. The Japanese press is most attentive to the “cracks in the alliance system” and to the forms that the “decline” across the ocean may imprint on the risis in the world order. For The Nikkei, if the post-war “order [...] broke down”, the world would be thrown back into “an era of chaos and war”; Japan “should not lower the flag of free trade”.

For the Japan Times, Tokyo “must not be passive” but instead leverage the multiple relationships of the Indo-Pacific Economic Framework (IPEF) with the United States, Korea, India, and Indone sia, the Japan-EU Economic Partnership Agreement (JEEPA) with Europe, and the CPTPP — the Trans-Pacific Agree ment rescued by Japan when Trump quit in 2017 and was then turned into a Japanese instrument. “A coalition of the willing” could be summoned through the Rising Sun’s multilateral economic ties, but Tokyo should at the same time “double down” on its military self-reinforcement efforts, within the alliance with Washington, and rebuild political ties with Beijing. Premier Shigeru Ishiba does not want to be surprised by the “various agreements” possible between the US and China. It would be logical, then, to use the CPTPP as a strategic platform: on one hand, for its ties with Europe, already enshrined in the core of the JEEPA and anticipated by Britain’s entry in December, and on the other hand, for the CPTPP candidacy presented by China which so far remains dormant.

Finally, the New York Times” overview of the multipolar forces awakened by Trump concludes with Indonesia and the oil powers of the Persian Gulf looking to the Indian Elephant to balance their options, and with the Chinese Dragon swimming in their warm seas: in May, ASEAN will meet the Gulf Cooperation Council in Manila, with China as host. Jakarta has recently joined the BRICS, with Indian assent and the encouragement of Japan. Other movements are taking place between India and Indonesia, with Prabowo Subianto’s visit to Delhi “closing the circle from Bandung to the enlarged BRICS” according to The Hindu. But here we must stop.

The Trumpian “art of the deal” presumes the tycoon’s instinctive ability to negotiate bilaterally with each actor. But in power relations the final outcome is always the unintended resultant of a parallelogram of forces. Lotta Comunista, February 2025

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