The international system is entering a period in which American power remains immense but is becoming less capable of organizing global behavior on its own. Alliances, trade institutions, and the dollar have not disappeared, yet governments increasingly prepare for situations in which Washington may be unwilling or unable to provide security, market access, or diplomatic leadership. The emerging model is therefore not a clean transition from American leadership to Chinese leadership. It is a world where states preserve useful parts of the old system while building alternatives around them.
The clearest evidence comes from American allies themselves. NATO members recently reaffirmed collective defense while European allies and Canada accelerated plans to reach higher defense spending targets. Rather than abandoning NATO, European governments are spending more and taking greater responsibility inside its command structure. This suggests that American retrenchment may produce a rebalanced alliance rather than its immediate collapse.
Institutions survive while dependence changes
The same pattern appears in global trade. Protectionism has increased sharply, especially since the United States expanded tariffs, but the World Trade Organization reports that roughly 72 percent of world trade was still conducted under normal most favored nation rules early this year. The multilateral trading system has weakened, but states have not simply abandoned it. They are combining old rules with regional agreements, industrial policy, subsidies, tariffs, and strategic controls.
Predictions about the rapid decline of the dollar also require caution. IMF data shows that the dollar still accounted for about 57 percent of global foreign exchange reserves in the first quarter of 2026, slightly higher than the previous quarter. Governments may be experimenting with alternative currencies and payment systems, but no competitor currently offers the same combination of liquidity, financial depth, and international acceptance.
What is changing faster is the willingness of governments to turn economic dependence into strategic leverage. China has increasingly restricted access to rare earth materials and related technologies, giving Beijing influence over supply chains essential to defense, electronics, vehicles, and energy infrastructure. Washington uses similar leverage through semiconductor controls, financial sanctions, tariffs, and technology restrictions. Economic interdependence once promoted as a restraint on geopolitical rivalry can now provide governments with tools for coercion.
Chokepoints are becoming sources of power
The conflict around the Strait of Hormuz demonstrates the consequences. Shipping through the waterway remains far below normal levels, even as Washington and Tehran dispute whether the strait is technically open. Recent tracking data records only a handful of commodity vessels crossing each day, while disruption continues to affect a route that previously carried roughly one fifth of global oil and liquefied natural gas flows.
Technology is producing similar divisions. Washington is now pressing countries involved in its Pax Silica initiative to choose between American and Chinese artificial intelligence networks. Supply chains for chips, critical minerals, cloud infrastructure, and advanced computing are increasingly becoming political commitments rather than neutral commercial relationships.
Yet traditional alliances continue operating alongside these new arrangements. Australia recently confirmed that AUKUS remains on course despite uncertainty surrounding American foreign policy and disputes with Washington over trade. This combination of continued alliance dependence and greater national hedging may become normal. Countries can rely on the United States for one security requirement while seeking different partners for trade, technology, energy, or diplomacy.
The coming international system may therefore be less an absence of order than an accumulation of smaller orders. NATO may govern one security space, BRICS another political network, regional trade agreements another economic sphere, while temporary coalitions manage individual wars and crises. Governments that succeed will be those able to preserve valuable alliances without assuming that any single institution or great power will protect every interest.
American primacy is becoming less absolute, but the institutions built during the American era remain deeply embedded in global politics. The challenge for middle powers is not simply to abandon them. It is to reduce dangerous dependencies, diversify strategic relationships, and build enough independent capacity to operate when the old guarantees no longer work as expected.
Original analysis inspired by Mark Leonard from Foreign Affairs. Additional research and verification conducted through multiple sources.
