Power shift: How America’s retreat is reshaping global affairs

It has been nearly eight decades since President Franklin D. Roosevelt put an end to America’s era of isolationism, and stamped its irresistible influence upon the world.

And the world, while grumbling about it – often angrily – grew accustomed to that influence. U.S. leadership of the “free world,” and then virtually the entire globe after the collapse of the Soviet Union, was taken for granted.

But in three short years, President Donald Trump has thrown out all such expectations. He has turned his back on many of the international institutions that make the world run, most recently showing no interest in leading any global response to the COVID-19 pandemic. Long before the outbreak, Mr. Trump had repeatedly shown his distaste for joining multilateral initiatives – on trade, on climate change, and on Iran’s nuclear program, for example. 

The rest of the planet, knocked off balance by this unfamiliar scenario, is still finding its bearings. Most countries did – in a sense – follow America’s lead on the pandemic, by pursuing an “every man for himself” approach. They closed their borders, competed with each other for scarce medical equipment, and, in China’s case, bickered over who was to blame for the origin of the virus.

“It’s been a shock to the system,” says Nicholas Burns, a former U.S. undersecretary of state. “COVID is a very apt example of what happens if a country the size of the United States refuses to lead.”

The rest of the world has mostly patched together workarounds so as to manage the disruption caused by Washington’s abdication of its traditionally dominant role in world affairs, but how long can they last? And there is no avoiding the fact that in a world where no other power is ready or willing to fill America’s outsize economic and military shoes, the U.S. federal government’s failure to cope effectively with the COVID-19 outbreak at home has sparked grave misgivings abroad.

“Even if you disliked the United States, you had to respect it as the preeminent world power able to get things done,” says Yascha Mounk, who teaches international politics at Harvard University in Cambridge, Massachusetts. “But COVID has made people take the U.S. less seriously. If people look at you with pity, that’s not a great qualification for heading up the free world.”

Stronger alone

Mr. Trump is the first U.S. president since World War II to believe that America is stronger alone than as a member of alliances taking international cooperative action.Yet his neo-isolationist approach is in line with American public opinion. Nearly 6 in 10 Americans want the U.S. “to deal with its own problems and let other countries deal with their own problems as best they can,” a Pew survey found in 2016. Some 41% of respondents said Washington does too much, rather than too little (27%), to solve world problems. Nor did his policies spring from nowhere. They were foreshadowed in the reluctance of his predecessor, Barack Obama, to wield U.S. power as vigorously or as often as had once been common.

Long gone are the days of the early 1950s, when the U.S. was committed to defend 42 nations, and stationed more than 1 million soldiers at more than 800 bases in 100 countries.

Since the collapse of the Soviet Union, U.S. foreign policy has been marked by two costly and largely unsuccessful military adventures in Afghanistan and Iraq. Those setbacks for the brand of aggressive internationalism espoused by President George W. Bush led Mr. Obama to rein in American ambitions; he refused to take the decisive stand in Syria that might have saved the uprising against Bashar al-Assad and his Russian backers, and he took a back seat in the British and French-led campaign to oust Muammar Qaddafi in Libya.

His approach became known as “leading from behind.” It reflected Mr. Obama’s sense that U.S. power was declining relative to nations such as China, and it allowed more space for allies to act. But they have proved unable to fill the vacuum.

Now President Trump is taking the U.S. pullback from the world much further – and doing it in a way that is more disruptive and whose outcome is less predictable.

A weaker equation

The most recent international door that Mr. Trump has slammed is at the World Health Organization (WHO). The U.S. president said in May that Washington would be “terminating our relationship” with the United Nations health agency because China enjoyed too much influence there.

But on his first working day in the Oval Office in January 2017, Mr. Trump was already displaying similar instincts, pulling Washington out of the Trans-Pacific Partnership, a 12-nation free trade pact linking Asia with the Americas.

Everyone thought that without the U.S. the deal would collapse. Some participants feared U.S. retaliation if they went ahead. But other nations pursued their project regardless, and a new version of the pact came into force two years later. 

The TPP would have included nations that make up 40% of the world economy; the new agreement encompasses only half that. “When you take the world’s largest economy out of the equation, the numbers don’t look as good,” says Deborah Elms, who heads the Asian Trade Centre, an advocacy group in Singapore.

“It would be much better for everybody if the U.S. was still in,” Dr. Elms adds. The trade deal works and offers “substantial benefits” to its members, she says. But without Washington as a driving force, “it hasn’t had quite the traction it should have done.”

Another international trade body that has no traction at all at the moment because of a U.S. boycott: the appellate body of the World Trade Organization, the ultimate arbiter of global trade disputes. But other WTO members are trying to kick-start an alternative system.

Washington has long been calling for reform of the WTO. In characteristic style, Mr. Trump backed his preference for bilateral trade deals over multilateral affairs with a threat – to veto all nominations to the seven-judge appellate body and thus disarm it. The U.S. has indeed vetoed all appointments to the WTO’s supreme panel since 2017.

As judges have retired without being replaced, the body has been heading into a wall: It needs three judges to make rulings, but since last December it has had only one sitting member. That means that any appeal pushes a case into limbo.

“The U.S. has driven this organization in the past,” says one official familiar with WTO activities but who is not authorized to speak publicly. “To have the founding member suddenly do a 180-degree turn has shocked a lot of people.”

But not shocked them into silence. Led by the European Union, 20 WTO members have employed a rarely used rule to set up a parallel appeals procedure, a “multiparty interim appeal arbitration arrangement,” that went into operation at the end of April. Including major trading nations such as China and Brazil, the group is responsible for about half of all trade disputes brought to the WTO since its founding 25 years ago.

“This arrangement is a stopgap solution that will be used only until a reformed appellate body is again fully functional,” insists EU Trade Commissioner Phil Hogan.

Paolo Garzotti, an EU trade negotiator in Geneva, echoes this point. “The interim arrangement is like an intensive care unit while we wait for a vaccine, which would be a solution to the appellate body issue,” he says.

In the longer term, if the U.S. cannot be tempted back into the organization, the WTO’s future as the rule-setter for world trade is uncertain. Given Beijing’s protectionist tendencies and other policies, “there is not a huge demand to have China become a leader of the organization,” says the official who was not authorized to speak publicly. “And the EU has difficulty getting its act together.

“It’s a vacuum here,” he laments.

The Iran nuclear deal

One of the most prominent issues on which President Trump has abandoned America’s partners, leaving them to see what they could salvage, is the 2015 deal under which Iran agreed to severely restrict its nuclear program in return for an easing of international economic sanctions. 

Branding it “the worst deal ever,” Mr. Trump pulled the U.S. out of the agreement in 2018, arguing that it only postponed Iran’s nuclear ambitions, did not prevent it from building ballistic missiles, and allowed Tehran to fund Washington’s enemies in the Middle East. The U.S. has since imposed a series of new sanctions on Iran.

The sanctions are so harsh – banning oil sales and prohibiting Iran from purchasing U.S. dollars, among other measures that Washington calls a policy of “maximum pressure” – that some observers think they are designed to provoke Tehran into withdrawing from the accord. That is an outcome the other international signatories to the deal – China, Russia, France, the United Kingdom, Germany, and the EU – are anxious to avoid. But they are unable to offer Iran much relief from the unilateral U.S. sanctions.

That’s because Washington has also imposed extraterritorial secondary sanctions on any government or company that trades with Iran. That means the U.S. government could not only ban anyone trading with Iran from doing business in the U.S.; it could also seize their assets there and cut off their access to financial markets.

Washington “has bullied other countries into capitulating” because American domination of financial markets and control of the U.S. dollar puts it in the driver’s seat, says Ellie Geranmayeh, an Iran expert with the European Council on Foreign Relations in London.

“The U.S. financial hold is so strong ... that no company in Europe will dare engage in any activity sanctionable under U.S. law,” Ms. Geranmayeh adds.

The EU has tried to make an end run around the U.S. sanctions by setting up a special barter-based trading system with Iran, called Instex, that shields European companies from prosecution in the U.S. But it has effected only one deal so far and is limited to food and medicine, which are already not subject to sanctions.

Yet Instex has been important politically: The goodwill gesture gives Iran a reason to stay in the deal, even if Tehran says it no longer feels bound by the nuclear agreement’s terms.

“We have a very messy deal on life support,” says Ms. Geranmayeh. “Instex is a Band-Aid to prevent the deal from falling apart. ... Everyone is waiting to see if there is any change after November,” when the U.S. presidential election is held.

“It’s a deal in name only,” she adds. “It is in play, but neither Iran nor the international community are getting what they wanted.”

The climate factor

There is probably no global threat that demands united action as much as climate change. So when Mr. Trump announced in 2018 that he was pulling the U.S. out of the Paris Agreement to combat global warming, it was an especially heavy blow.

“No matter what the rest of the world does,” warns Meenakshi Raman, an activist with the Third World Network, a Malaysia-based think tank, “if the U.S. refuses to play ball it will be very difficult to reach the target” set in Paris of limiting global warming to well below 2 degrees Celsius.

In one sense, the fact that the U.S. government is no longer bound by its Paris Agreement commitments to lower greenhouse gas emissions is unimportant.

“The U.S. has withdrawn from the agreement but it has not withdrawn from reality,” points out Pascal Canfin, chair of the Environment, Public Health and Food Safety Committee of the European Parliament. “Its companies have not withdrawn from the energy market or the race for clean energy sources.”

Climate change, Mr. Canfin adds, is a matter of insulation in buildings, transport exhaust, and energy generation. “The main battle is industrial,” he says, “and if U.S. companies are not incentivized or forced to move, other countries will have the technology and the patents and set the standards.”

At the same time, the U.S. federal government is not America. Thousands of American cities, states, and businesses have signed on to the “We’re still in” campaign, pledging to meet the commitments Washington made in Paris in 2016. Together, they account for two-thirds of U.S. gross domestic product, two-thirds of its population, and more than half of its carbon emissions, says Kevin Kennedy, a senior fellow at the World Resources Institute, a Washington-based think tank.

But there is only so much they can do, cautions Mr. Kennedy. “If we are really aiming for net-zero carbon emissions by midcentury,” he says, “the federal government will be critical.”

As the world’s second largest carbon emitter, the U.S. is also critical to the diplomatic process, built on the Paris deal, to encourage governments to set more ambitious targets for lowering greenhouse gas emissions. Around the edges, the countries remaining in the Paris Agreement (none have followed the U.S. out the door) can make up for Washington’s absence. Last year, for example, when it came time to replenish the Green Climate Fund, which helps developing countries mitigate the effects of climate change, a number of European countries doubled their contributions to compensate for the lack of U.S. support.

But no government is willingly going to set carbon emissions targets that will inevitably increase its companies’ costs of production unless other governments pledge to do so as well. “You need a global framework so as to go beyond the low-hanging fruit and take action that reduces your competitiveness,” argues Emmanuel Guérin, a former French diplomat who led the team that drafted the Paris Agreement.

At the heart of that framework will have to be the world’s two largest carbon emitters, China and the U.S. “To move climate negotiations forward, you first need the basic foundation of a deal between China and the U.S.,” says Mr. Canfin.

If that proves impossible, Europeans are themselves looking to China. “If the EU and China really set the direction in a very clear way, agree to strengthen climate targets, and cooperate, that would send a very strong signal to the world,” suggests Mr. Guérin.

For the time being, though, all eyes are on November. Explains Mr. Canfin, “We need to keep all our options alive, waiting for Mr. Trump not to be reelected.”

Who is indispensable?

Madeleine Albright, former President Bill Clinton’s secretary of state, used to refer to the U.S. as the “indispensable nation.”

Nothing could be further from President Trump’s conception of U.S. responsibilities to the world, where he sees Washington’s role as limited to defending U.S. citizens and promoting their interests.

“We are not the policemen of the world, but let our enemies be on notice,” he told graduates of the U.S. Military Academy in West Point, New York, in June, “if our people are threatened we will never ever hesitate to act.”

The “job of an American soldier is not to rebuild foreign nations,” he added, “but to defend ... our nation from foreign enemies.”

The U.S. economy is still the largest in the world, however, and Mr. Trump commands the world’s most powerful military. Nor is he shy about using those strengths when it suits him, such as to impose secondary sanctions on companies dealing with Iran, or dispatching a drone in January to assassinate Qassem Soleimani, a top Iranian general.

In June, he imposed economic sanctions and visa restrictions on officials of the International Criminal Court involved in investigating allegations of war crimes in Afghanistan, including those made against U.S. soldiers.

What has changed since Ms. Albright’s day, says Mr. Burns, who was her spokesman, is that the U.S. is no longer alone in being indispensable: It has been joined by the EU and China.

The trouble with that, points out Mr. Mounk at Harvard University, is that “China does not want to, and Europe is not able to” play the role that the U.S. has played for more than 70 years.

The Chinese government has certainly sought to profit from American discomfiture over COVID-19, trumpeting its own record in confronting the pandemic. But Chinese officials also covered up early signs of the disease, allowing it to spread.

Beijing has shown no signs of seeking, let alone exercising, global leadership in the fight against COVID-19, besides ensuring that every delivery of Chinese medical equipment abroad attracted maximum publicity.

In the U.N. Security Council, China and the U.S. even blocked the passage of a resolution calling for greater international cooperation in the fight against COVID-19 and for cease-fires in ongoing conflicts because they disagreed about a reference to the WHO.

On the broader stage, the U.S. has traditionally bolstered its international appeal by standing, albeit sometimes on feet of clay, for democracy and human rights. China’s model of governance, founded on political repression, appeals to few except the autocratic rulers who share its values.

The other candidate to fill U.S. shoes, the EU, is mightily divided – between East and West politically, and North and South economically. That lack of unity undermines the sense of common purpose the EU would need to impose itself comprehensively on the world stage.

There have been some bright spots during the COVID-19 crisis. Central bankers around the world have worked together to hold the global economy together; scientists are collaborating in the search for a vaccine; an EU-sponsored pledging conference in May had no difficulty in raising $8 billion to help fund that search, even though Washington stayed away.

On the diplomatic front, the Group of 20 agreed in March to pump $5 trillion into the world economy. And at the WHO, the EU managed to bridge the widening gulf between China and the U.S. to broker an agreement about an independent inquiry into the origins and handling of the first COVID-19 outbreak in Wuhan, China.

But the general landscape of international cooperation and action in Washington’s absence is bleak. Beijing and Washington have preferred to score points off each other rather than work together; EU members each chose their own response to the pandemic, and are struggling now to unite around a recovery plan; Africa, Latin America, and Asia have been left to fend for themselves.

“When the U.S. opts out,” says Mr. Burns, “it makes it very difficult for the rest of the world to be effective.”