Rogue Hegemons

Although 2025 will probably be remembered as the year that US President Donald Trump upended the global trading system, the truth is that both of the world's hegemons, the United States and China, have gone rogue. Surging US protectionism and resurgent Chinese mercantilism are now twin scourges afflicting the rest of the world, especially developing countries.

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Although 2025 will probably be remembered as the year that US President Donald Trump upended the global trading system, the truth is that both of the world's hegemons, the United States and China, have gone rogue. Surging US protectionism and resurgent Chinese mercantilism are now twin scourges afflicting the rest of the world, especially developing countries.

While some apply the label "G-Zero" to today's leaderless world, it is more accurate to say that we are dealing with a "G-Negative-Two" world. Instead of providing global public goods, China and the US are inflicting global economic costs, and they are doing so in mutually reinforcing ways.

In some sense, Chinese mercantilism begat US protectionism. Trump's longstanding tariff obsession derives from his fury-fueled conviction that trade surpluses abroad have damaged the US economy, especially its manufacturing sector. In that world view, China, with its consistently large trade surpluses, was the provocateur-in-chief, even though in practice more countries have been targeted.

Trump's "Liberation Day" tariffs in April, and the tumultuous iterations that followed, have made the US one of the world's most protectionist economies. On average, tariffs on exports of goods to the world's largest market have jumped from just over 2 per cent to 17 per cent, an eightfold increase. Not only has access to US markets been constrained, but it is also radically more uncertain, because tariffs have become an instrument for indulging the president's erratic whims and furthering private interests.