6 days Ago By Stuart Rollo
The winner of the federal election on May 3 will be responsible for guiding Australia through the most important period of change in our foreign policy outlook since the Second World War. For the better part of eight decades Australia’s core national interests of economic prosperity, regional stability, and territorial sovereignty have been well served by our close relationship with the United States, and our privileged position within the American-led international order. The Trump administration has made the decision to purposefully and decisively dismantle this order, under the belief that it no longer serves core American national interests, particularly due to the economic advantages it has delivered to China, America’s only superpower rival.
Illustration by Dionne Gain Credit: The American international order is being replaced by an “America First” hegemony, wherein the United States deals with nations based on power and interests, not multilateralism, shared values and historical friendships. Australia must now, finally, chart a more independent course wherein our relationship with the US continues to inform, but not define, our approach to achieving our own security and prosperity in a changing region. It is absolutely critical that the next government understands that confronting these changes is unavoidable.
While the brash bullying that has coloured Trump’s recent proclamations on tariffs, and Canada and Greenland’s sovereignty, is certainly a reflection of his personality, the underlying shift in American foreign policy is structural, not personal. Trump is an accelerant, not a cause of these fundamental economic and strategic changes that are reshaping the world. The past 80 years of the American international order were built on the foundation of economic power.
At the end of Second World War, the United States held an advantage over the rest of the world never before seen in history across finance, industrial production, and natural resources. With 6 per cent of the world’s population, the US held approximately half of the world’s wealth in terms of gold, currency, and International Monetary Fund reserves. Its gross national product and industrial output was roughly equal to the rest of the world combined, and it was the largest producer of oil, the natural resource most critical to the global economy, owning or controlling around 60 per cent of the world’s active reserves.
That power advantage has been steadily eroding for decades, especially relative to China. China is now by far the world’s largest industrial power, trader, and holder of foreign currency reserves. It enjoys a major advantage in a range of critical mineral supplies vital to the defining technologies of the 21st century, such as networked digital communications, renewable energy, and electric vehicles; sectors in which China now holds a considerable lead in terms of research and development, as well as production, over the United States.
The United States, militarily overextended across Europe, the Middle East, and the Asia-Pacific, and economically outcompeted by China, no longer has the strength to underwrite a global system that can both secure its own national lead over its superpower rival in perpetuity, and distribute a sufficient range of incentives to its allies and collaborators in propping up the American international order. Faced with this dilemma, the Trump administration is choosing maximal national power over international institutions and alliances. Since the Second World War, there has been a high degree of alignment between Australia’s national interests and American global leadership.
The “ San Francisco system ” of alliances between the United States and Australia, Japan, South Korea, and other regional powers – also known as the “hub and spokes” structure – tied together the engines of regional economic growth with a security order that suited Australia most comfortably. But the Chinese economic miracle, and America’s decision to integrate China into the global economy, changed this system irreversibly. Contentious at the time for the possibility that they were creating a superpower rival, American politicians and business leaders ultimately supported China’s entry into the global economy, and the cheap and efficient labour and investment opportunities it represented, under the premise that as China grew it would democratise and come to resemble the West in its social and political norms and views of the world.
Perhaps most important to this gambit was the commonly held notion that due to perceived cultural and political limitations, China would never come to compete with the United States at the most profitable heights of the techno-industrial economy. These liberal fantasies proved false, and we now have a system of two rival superpowers. While there are similarities with the Cold War, it is now China that is driving global economic integration, not the United States.
The Trump administration, through its suite of tariffs, is aiming to intervene in the global economy by directly and inordinately targeting China, and coercing the rest of the world to invest in American reindustrialisation and buy American products. While this will strengthen America’s hand in confronting China, it will also damage the main economic connection that has driven Australian prosperity for the past 30 years. Encouraging and supporting a restrained American military counterbalance to China in the region is in the Australian national interest, and so too is the development of our own deterrent military capabilities.
But subordination to an America First hegemony within which we have diminishing influence is not. The next government must take up the task of proactively navigating these perilous waters, not sit by naively hoping for a return to a system that has fundamentally shifted and will not return. Dr Stuart Rollo is a senior researcher at the Centre for International Security Studies at the University of Sydney.
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