THE WORLD AFTER TRUMP / PROJECT SYNDICATE

The World After Trump

The international economic order that has prevailed since the end of World War II is gone for good. With the United States abdicating its leadership responsibilities, it falls to middle powers to construct a system that accommodates national preferences while safeguarding global stability.

George Papaconstantinou  and Jean Pisani-Ferry

PARIS/FLORENCE—When Canadian Prime Minister Mark Carney observed earlier this year that the world is “in the midst of a rupture, not a transition,” he captured a reality most governments have been slow to accept. 

The international economic order that has prevailed since 1944 is gone for good. 

The question now is what comes next.

The answer remains unclear. 

But several features of the emerging landscape are already certain, and they should guide how Europe and the world’s middle powers navigate this new terrain.

First, the Bretton Woods system is no longer a functioning anchor. 

Its fragility was exposed during the 2008 financial crisis, and its failure to address the uneven fallout of the COVID-19 pandemic further undermined its legitimacy. 

But the decisive blow came from within: the United States, the system’s anchor and key architect, is abandoning it. 

The combination of decaying multilateralism and a US administration abdicating its global role has produced an irreparable break.

Second, global trade will not return to its previous openness, largely due to structural forces. 

China’s trade surplus exceeded $1 trillion in 2025, driven by manufacturing. 

The country now accounts for roughly 35% of the world’s manufacturing output and can supply almost any industrial good.

At the same time, President Donald Trump has raised US tariffs to their highest levels since the 1930s, with projected revenues of $2–3 trillion over the next decade. 

Given that these projected revenues have been used to finance cuts on household taxes, reversing them would carry steep political costs for any future administration.

Third, the breakdown of the global order has normative implications. 

By withdrawing the US from 66 international organizations and erasing the line between personal and public interests, Trump has shattered the decades-long informal code whereby conflicts of interest were avoided, independent institutions were respected, and multilateral bodies were supported. 

Declarations alone will not rebuild what took decades to construct.

This is not to suggest that global governance is impossible. 

But it must be reimagined as a more modest project. 

A single model based on open markets, the rule of law, independent institutions, and a US security umbrella is no longer realistic. 

What remains possible is something closer to a condominium, with rules that accommodate national preferences while prohibiting actions that impose costs on others or damage the global commons.

A useful starting point is the framework proposed by Harvard economist Dani Rodrik, which seeks to constrain “beggar-thy-neighbor” policies and protect shared global goods while leaving room for national diversity. 

If implemented effectively, such a framework would rule out much of what the Trump administration has done. 

Tariffs that primarily hurt the country imposing them might survive the test, but policies that destabilize the global financial system or undermine climate cooperation would not.

The central challenge, however, is enforcement. 

With the US either absent or actively hostile, who would set and uphold the rules? 

Here lies the most difficult test—and the greatest opportunity—for middle powers and for Europe.

The international monetary system is a case in point. 

The dollar’s dominance has survived the demise of the Bretton Woods system of fixed exchange rates in 1971, the rise of the euro, and multiple crises. 

But with the pressure now coming from the US itself, the dollar’s global position is no longer assured.

Paradoxically, the rise of dollar-denominated stablecoins has strengthened demand for the greenback. 

But Trump’s attacks on Federal Reserve independence, the explosive growth of US public debt, and the fragmentation of global trade are all chipping away at the foundations of dollar primacy. 

If the next Fed chair were to scale back the currency swap lines that have served as a global lender of last resort since 2008, the consequences for financial stability would be severe.

Over time, a multipolar monetary system seems more likely than a simple shift from the dollar to the renminbi. 

The Chinese currency remains constrained by capital controls and the government’s reluctance to assume the responsibilities of a reserve issuer. 

Still, China’s manufacturing dominance makes a larger regional role for the renminbi all but certain. 

The euro, meanwhile, has the institutional foundations and market depth to expand its role, provided that Europe can muster the political will to support it.

European leaders have long understood that the global order was fragmenting, yet they continued to behave as though the US-anchored system would persist indefinitely. 

In that sense, Trump’s second presidency has been a rude awakening.

But the EU’s response has been inconsistent and tentative. 

The bloc has settled for a 15% US tariff on European goods rather than escalating tensions with Trump, and is only now finalizing trade deals with Mercosur and India that should have been concluded years ago. 

As policymakers begin to consider a more substantial international role for the euro, they are also questioning whether US Treasuries should retain their automatic risk-free status under EU banking rules.

What the EU has yet to do is lead. 

On World Trade Organization reform, the European Commission’s proposals remain vague and fail to address how a multilateral system could be sustained without the US. 

While serious proposals for Eurobond-like instruments have been circulated, they have not translated into political commitment. 

Perhaps most importantly, the EU has not developed a coherent China strategy.

Greater economic and technological autonomy should not be mistaken for a retreat from globalization. 

It is a precondition for meaningful engagement in a more fragmented world, whether with China, a future US administration, or middle powers, along the lines of what Finnish President Alexander Stubb had dubbed “values-based realism.”

The alternative to the US-led rules-based order need not be chaos. 

What Carney was calling for is precisely what this moment requires: a coalition of countries willing to act as agenda-setters and credible rule-keepers in a less orderly world.

Such a coalition must accommodate different economic models while rejecting overtly non-cooperative behavior. 

It must invest in domestic resilience as the basis for international engagement. 

And it must assume responsibility for global stability, rather than waiting for the US to return to its former role.

George Papaconstantinou, a former finance minister of Greece who negotiated the country’s first bailout, is Professor of International Political Economy at the European University Institute and the co-author (with Jean Pisani-Ferry) of New World New Rules: Global Cooperation in a World of Geopolitical Rivalries (Columbia University Press, 2025).

Jean Pisani-Ferry, a senior fellow at the Brussels-based think tank Bruegel and a senior non-resident fellow at the Peterson Institute for International Economics, is a professor at Sciences Po and the co-author (with George Papaconstantinou) of New World New Rules: Global Cooperation in a World of Geopolitical Rivalries (Columbia University Press, 2025).