Kopi Time with Taimur Baig – Episode 153

Wed 21 May 2025
Three Ironies in Fracturing World Order Speaker — Danny Quah
Moderator — Taimur Baig
Venue — Kopi Time with Taimur Baig DBS. Episode 153
Location —Singapore

I don’t think the current US administration has a plan for the international system.

Almost everyone outside that Administration agrees world order is under stress. They all say, nodding heads in agreement, this is because the international system’s principal architect and chief sponsor no longer wishes to serve that supporting function Indeed, the opposite: the hegemon is not just no longer sponsoring the system, it is actively pulling at the threads.

Previous warnings had always been that the newly-emerging powers (the Global South), dissatisifed with the international system, would in due course play the revisionist card. They would seek to remake the system in their own image. This was because the rules of the game had been written in such a way as to disadvantage those rising powers.

But three ironies follow: First, the most significant disruption to world order today comes, not from the newly-emerging powers, but instead from the international system’s original architect, the same agent who had written the rules of the game in order to benefit itself. Second, the revisionist reasoning is the same, namely that the international system has been disadvantageous to the complainer. Finally, while the newly-emerging power revisionists came with a plan for their preferred new world order—at least in the conventional narrative—today’s disruptor seems to have no plan, at least not to any degree resembling those envisioned by previous US administrations, all the way from Eisenhower, past Clinton, and through Obama.

To test this hypothesis, a body of evidence needs to be assembled. But the first item of that evidence is already visible, and it is this: First day, Trump 1.0 tore up TPP. Then Japan and others decided to build CPTPP, excluding the US but based on much the same principles. Following that, however, at no time has Trump and his enduring associates said a single significant word about CPTPP. If the ideas in TPP were so awful and objectionable, why has CPTPP never been worth even mentioning? Contrast this relative quiet with America’s very public reactions to AIIB’s founding and Japan’s proposals for an Asian Monetary Fund.

The answer is that the mood in America concerns itself a great deal about America, but hardly at all about principles, ideas, or what else goes on in the rest of the world. The current administration, and America more generally for the next decades, care a lot about the things that lap up on America’s shores. But anything beyond that is invisible to them. Today, the US administration is greatly concerned about China’s manufacturing prowess. It does not want more exports that will continue to inflict China Shock on America’s workers, industries, and middle-class communities. It wants to trade with China and others, but on its own terms applied bilaterally: America will remain what it thinks of as a trading nation. But conditional on that, the US does not care if those Chinese exports go to some nation in Africa or the rest of Asia. America is shrewd enough, however, about chain-washing: China’s exports elsewhere shouldn’t be re-exported and end up in America. That would then be something that laps up on America’s shores, and America will be strict about that. But apart from that, whatever.

While America warned us about revisionist powers such as China seeking to disrupt and then remake world order in their own image, today it is America disrupting the international system. But America doesn’t have a plug-in replacement for the rules-based multilateral world order. It only wants to edit that international system, and then actually only those parts that touch it.

Today US imports are about 11% of what the world exports in total. That import demand won’t necessarily go away altogether, but it could well diminish. That reduction will be painful, both for the rest of the world and for Americans. But a shock of that magnitude is not going to shatter world order in the longer run.

The two pieces of writing that Taimur and I discussed, that helps support what I say:

My Foreign Policy open letter to the then-incoming US President argued that America does not need to be number 1. If it were really serious about being the number 1 nation, it ought to come back into the international system and show that it can indeed outperform on a level playing field. But even if it doesn’t, America can still be a (relatively) prosperous nation, paying attention to the outside world only through its being surrounded by friends (north, south) and fish (east, west), and dropping everything else. The surprise is that the Trump administration seems to not mind taking friends out of the equation even, but we’ll see how long that continues.

My forthcoming Correlated Economics and Geopolitics article, forthcoming in the The New Global Economic Order (Ing and Rodrik, editors) says that we shouldn’t be overly surprised at how world order has gone over the last eighty years. That the international system has fractured as much as it has is shocking to those who think that no matter how bad geopolitics gets, economics (comparative advantage, win-win outcomes from trade) will hold things together. But the fact is, international economics is not experienced by politically pivotal agents in terms of comparative advantage. Instead, for those agents, the lived experience is the China Shock: the tsunami wave of imports stealing jobs, dismantling industry, turning into ghost towns what were once thriving middle-class communities. This is how Americans now think about trade, so of course economics has grown collinear with geostrategic rivalry. China is an enemy both on geopolitical and economic grounds. And, surprise, the China Shock language has now crept into the political conversations in other nations too. The fault lies not in economics (which still produces aggregate win-win outcomes from trade); the fault lies in policymakers that don’t translate aggregate win-win outcomes into inclusive growth for their populations.

References

Kopi Time with Taimur Baig no. 153 youtube

Quah, Danny. 2024. “Why America Should Drop Its Obsession With Being No. 1”, Foreign Policy (Fall) pp. 41-43

Quah, Danny. 2025. “Correlated Trade and Geopolitics Driving a Fractured World Order”, Ch. 5, pp. 54-66, in Ing, Lili Yan and Rodrik, Dani (eds.) The New Global Economic Order, New York: Routledge.