The dying days of the old world order

The existing world order has been with us for so long that we have grown indifferent, even callous and unappreciative of its beauty and effectiveness. That apathy began to change when America elected Donald J. Trump as President.

During his first term in office, from 2017 to 2021, President Trump was aptly labeled “The Great Disruptor.” His policies and directives were so extreme that observers often wondered whether he was posturing, bluffing, or merely joking.

Barely a year into his second term in 2025, we realized the joke was on us all along. The radical policies he is now dictating are even more aggressive and disruptive — particularly regarding tariffs and international alliances.

Wittingly or unwittingly, President Trump has undermined, if not dismantled, the existing world order. Whether it can still be salvaged after his time in office is anyone’s guess. But for sure, like Humpty Dumpty, it will never be the same again.

What could have motivated President Trump to implement such sweeping changes, even at the risk of alienating US’s long-time allies? Is this the dawn of a Lone Ranger-style leadership?

To answer these questions, we must examine the historical underpinnings of the world order that emerged after World War II — and the latent sentiments of the American people who elevated a figure like Trump to the highest office in the land.

Closely linked to this is the philosophy of isolationism, deeply rooted in the American psyche, which appear to be influencing much of President Trump’s agenda.

Historically, America’s inward-looking tendencies stemmed from the circumstances that attended its birth as a new nation. The American Revolution was justified as a struggle to free the colonies from British control and interference.

Upon achieving independence, Americans became increasingly focused on their own self-interests and cautious about entangling themselves in foreign affairs. Hence, their initial reluctance to join both World Wars, until fate intervened.

In World War I, it was Germany’s unrestricted submarine warfare against commercial shipping that forced the US’s hand. In WWII, it was Japan’s attack on Pearl Harbor.

The end of WWII marked a dramatic shift in the global landscape. The US supplanted Great Britain as the undisputed leader of the Free World, while the Soviet Union emerged as the dominant force of the Communist Bloc.

What followed was a prolonged struggle for global supremacy between these two superpowers — what came to be known as the Cold War. Over time, America’s isolationist instincts gave way to internationalism.

Having fully embraced the mantle of world leadership, the US spearheaded institutions and programs designed to rehabilitate war-torn economies and preserve global peace. Among them were:

1. The World Bank and the International Monetary Fund in 1944;

2. The United Nations in 1945;

3. The General Agreement on Tariffs and Trade in 1947, which later transformed into the World Trade Organization in 1995; and,

4. The Marshall Plan in 1948.

The American-led world order lasted for nearly eight decades with the following key achievements:

1. Preventing the outbreak of WWIII;

2. The eventual defeat of the Soviet Union; and,

3. Unprecedented prosperity in most US-aligned nations.

A pivotal factor in the economic revival of the Free World was access to the American market — the most dynamic and lucrative in the world.

It was not only its allies that benefitted but also the US, which posted consistent economic growth and expansion during the period, avoided the recurrence of another Great Depression, and — following the collapse of the Soviet Union — emerged as the world’s sole superpower.

After their Cold War victory, Americans anticipated a “peace dividend.” They expected a portion of the huge defense budget could be redirected toward social services.

That expectation, however, never fully materialized. Why?

Because global demand for US power has not declined. Moreover, it has expanded. Whether in the Middle East, greater Asia, Africa, and even Europe, the clamor for US support has only grown louder.

Consequently, America’s dormant isolationist instincts began to re-awaken. These found expression in questions like: Why must we be the world’s policeman — at great financial and human cost? Why can’t we enjoy the social benefits that befit the world’s largest economy?

These were difficult questions — ones often swept under the rug. But the sense of unfairness and neglect festered, and eventually made its way into the political mainstream.

George W. Bush, Jr. was the first presidential candidate since WWII to acknowledge this growing discontent. Unlike his opponent, Al Gore, Bush promised a shift toward international disengagement, which resonated with the electorate.

But 9/11 happened and Bush’s plans were shelved. Motivated by revenge, the US doubled down on its role in global affairs, with a renewed focus on combating terrorism. The result was the Afghanistan and Iraq wars.

Meanwhile, America’s liberal trade policies — combined with improvements in the quality of foreign-made goods — produced an unintended consequence: a ballooning trade deficit, which has since swelled to $1.13 trillion in 2024.

Regardless of its root causes, President Trump portrayed the deficit as proof the other countries were exploiting America’s generosity. His response: impose unilateral tariffs to restore the balance. Whether this approach will prove effective remains to be seen, but the magnitude of the problem is undeniable.

Domestically, the US budget deficit reached a staggering $37.3 trillion in 2025 — 124% of its GDP (far above the ideal threshold of 60%). To finance these deficits, the US turned to foreign and local lenders. Alarmingly, the funds required just to service this debt now exceed the entire US defense budget.

Exacerbating the situation is the seemingly insensitive behavior of US allies, particularly in the European Union, where defense spending averages just 2% of GDP (compared to 13% for the US). Yet these nations continue to rely on American security protection, while allocating nearly 50% of global social welfare spending within their own borders.

Though America remains a formidable military and economic power, it is beset with serious concerns that it must resolve soon or be weakened by them. The consequences would be dire — not just for the US, but for the entire world.

The allies of the US must therefore begin to understand its vulnerabilities and support the reforms necessary to address those head-on. It’s time for wealthier allied nations to contribute their equal share in preserving the peace and prosperity that America has shouldered for so long.

To dream of preserving the status quo of the current world order — the very system that led to America’s current predicament — may no longer be tenable.

Something has got to give.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP.

Edgardo “Ed” C. Amistad is a member of the MAP Agribusiness Committee. He is an adviser of the Philippine Disaster Resilience Foundation (PDRF) and former president of the UCPB-CIIF Finance and Development Corp., and UCPB-CIIF Foundation.

map@map.org.ph

edgardo.amistad@yahoo.com