Trump America first policy forces allies to rethink global economy Nellius Irene | usagoldmines.com

President Donald Trump’s United States is leading a radical rethinking of the world economy as allies and investors deal with a less predictable Washington. U.S. policymakers for decades touted globalization as a road to growth, stability, and peace. 

To some extent, today’s world is characterized by shifting tides, with countries seeking resilience or hedging against the pressure to adapt to the threat of economic coercion posed by the world’s largest economy. 

Allies reduce dependence as Trump reshapes global power

Trump’s unapologetic “America First” policy has included threats of tariffs, supply chain constraints, and other aggressive measures to gain concessions from his allies. His ill-fated effort to acquire Greenland and a subsequent threat of tariffs on European countries revealed the dangers of strategic reliance on Washington. 

Although the overnight crisis receded following a temporary solution, European leaders vowed not to be pressured, suggesting they would increase efforts to rely less on Washington. Neil Shearing, chief economist at Capital Economics in London, said the current environment demonstrates a change in global power relationships. “It’s about power, dependency, and coercion,” Shearing said.” “Now, countries are looking for ways to weaken their strategic reliance on the United States.” 

In the post-World War II regime, where the U.S. Navy defended sea lanes and the U.S. capital ensured stability, efficient global commerce was possible. But Trump’s recent moves are prompting countries to exchange some of that efficiency for security.

Rising costs and market shifts signal a new economic era

Even in a time of economic upheaval, the implications are clear. The drive to reduce dependence on U.S. supply chains is increasing the cost of critical goods. Gold prices have surged nearly 80 percent in the past year as investors scramble for refuge, and copper and other metals have soared as domestic semiconductor and pharmaceutical capacity is developed.

The American economy continues to emerge as strong, thanks to technological and AI discoveries. Financial markets have been responsive to U.S. growth despite geopolitical tension. The Trump administration argues that its policies reinforce — not weaken — global alliances. Treasury Secretary Scott Bessent dismissed concerns about a dollar pullback as a “false narrative,” and the White House stressed that America First does not mean America Alone. 

There are, however, concerns that the implications for the U.S.’s long-term future could be serious. As European countries, Canada, and fast-growing Asian regions pour money into their own technology and defense systems, markets worldwide for capital are growing. 

Higher borrowing costs will have to confront the U.S., now over $30 trillion in debt and facing annual budget deficits on an urgent scale. The Congressional Budget Office forecasts that by 2035, the Government will need to borrow over $21 trillion, and even modest increases in interest rates will raise annual service costs to the hundreds of billions of dollars. 

The Greenland affair and other moves during Trump’s second term demonstrate a broader trend: allies and investors cannot take American leadership for granted. “President Trump is intent on jettisoning the Atlantic Alliance and the overall world order that we’ve known for 80 years,” said former U.S. deputy treasury secretary Roger Altman. “He wants to replace that with a tripolar global order among Putin and Xi Jinping.” 

Today, the global economy is undergoing a transition. Countries that were previously dependent on U.S.-led globalization are carving out their own financial, technical, and strategic resilience in industries that have grown increasingly resistant—or independent—of U.S. centrality. 

So while American markets are still robust, the global system as a whole is likely to see rising costs, even more fragmented capital flows, and greater uncertainty. What we will have in the next decade will be a new world order, a world order forged by the competition among many powers and the demise of the American monopoly upon unquestioned supremacy.

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This articles is written by : Nermeen Nabil Khear Abdelmalak

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