World leaders believe they face an impossible choice. Capitulating to US president Donald Trump’s demands doesn’t work, because it suggests weakness – and Trump feasts on weakness. The more concessions you give, the more he demands, until he deems there is nothing left worth taking.
Canada and Mexico learned this first-hand: each caved to Trump’s initial demands and received nothing in return except higher tariffs (and a “pause” while Trump generated new demands). On the other hand, confronting Trump head-on has not worked out either; defying Trump just provokes a disproportionate response. Canada and China’s retaliatory tariffs and rhetoric were met with even more absurdly aggressive tariffs and tweets.
But leaders are not stuck with a game of “heads he wins, tails I lose”. Their real choice is not whether to cave or coddle; it is whether to carry on with the American alliance principles, only without America – for now.
The world order established after the second world war is voluntary. Its existence does not depend on any one nation or leader. Its members, led by the United States, emerged from the devastation of two world wars, a massive depression and the Spanish flu pandemic, and agreed to do things differently.
Their world order emphasised rule of law, non-aggression among nations, trade and institutions to address borderless threats to our environment, markets, health and safety. That effort produced – imperfectly but unquestionably – the results these nations had imagined: a world with far less war, disease, famine and fear, and far greater wealth, health, peace, order and freedom.
That world order endures regardless of whether the US, or any other single nation, remains committed to its post-second world war agreements and institutions. Which means, regardless of Trump’s demands or threats, individual nations can decide for themselves what makes the most sense for their country.
In the trade context, if they stick to the alliances they formed together with the US, it will mean they act in concert to extend favourable terms to nations who trade fairly with them, withhold those terms from those who don’t, and assist each other while individual trade war plays out.
We’ve seen this happen already during Trump’s first term. The US had led the Trans-Pacific Partnership (TPP), recruiting 11 other countries to join it in forming a vast trading bloc in Asia Pacific. The TPP provided a powerful counterweight to China’s economic bullying, but – because it became politically unpopular in the US – Trump removed the US from the TPP by executive order.
But the TPP continued. The other 11 members carried on with essentially the same trade agreement (but without provisions the US had forced upon them) and they have been reaping its benefits for nearly a decade without the US. Other alliance agreements and institutions have survived the comings and goings of various nations. Australia and the US have carried on with the Anzus treaty for more than 30 years since New Zealand suspended its participation.
Other nations can and will adjust to America’s changed role in the world order; those adjustments will likely make their nations stronger, more resilient, more innovative and more deeply bonded to one another. That has proven to be a winning formula. We are already seeing this happen with Canada and Europe working more closely together on trade agreements without the US and nations around the world stepping up to support Ukraine.
We will likely see this play out now with tariffs. Trump had reasonable grounds to launch a trade war with China – a strategic competitor that is accused of manipulating its currency, stealing valuable American intellectual property and waging other forms of economic warfare. Before launching a tariff war, however, nations ordinarily enlist partners to help them withstand the retaliatory measures that will follow. To protect itself, the US needs other countries to commit to buy its goods, supply its markets, and replace its supply chain.
Trump failed to do this. In fact, on 2 April 2025, he “liberated” America from free trade by imposing tariffs not only on China, but on all of America’s 14 other most reliable trade partners (dubbing them the “dirty 15”), and tariffed the rest of America’s (now-former) free trade partners for good measure.
Trump’s tariffs on America’s trade partners did not kill free trade among these nations; it only killed free trade with the US. No other nation has abandoned their free-trade arrangements. Rather, the principal effect of America rescinding free trade commitments was to nearly wipe out the US bond market and severely damage the US’s greatest advantage in a trade war. Without the other dirty 14’s help, the US will struggle to win its tariff war with China.
These realities are probably the main reasons why Trump “paused” (yet again) all but the China tariffs and exempted smartphones and computers across the board (even though Trump announced on Sunday that those exemptions would be short-lived).
It is only because of the depth and value of relations that allies and partners have formed over the past 70 years that nations like Australia are taking a measured approach: protecting local markets, enforcing their trade laws and letting market realities halt implementation, without jeopardising greater alliance priorities. But if this process continues, other nations carrying on with their own free trade principles are likely to retaliate against the US, provide support to one another and create an opening for China to form a trade pact that isolates the US.
If this were any other nation, these moves may have happened already. For now, the real option for America’s allies’ is not to go with Trump or against him, but to continue what America has always stood for; to demonstrate the value and resilience of that world order and maybe motivate the US one day to reclaim its place in it.
