Giles Merritt Suggests Trump’s Actions are Setting the Stage for a Reevaluation of the EU-Led Global Rulebook

Amidst the chaos of our times, there is a notable lack of international agreement; however, one point on which nearly everyone concurs is that the post-World War II rules-based global order has come to an end.

This demise can be attributed to Donald Trump, although it was already in a state of irreversible decline.

The significance of the Bretton Woods institutions—the IMF and the World Bank—is increasingly questioned, NATO appears to be lifeless, and the WTO has long since lost its ability to mediate trade disputes.

Trump’s ability to dismantle international trust has been remarkable and poses the risk of disorder and economic hardship for all involved.

Nonetheless, it underlines the necessity for an EU-led global dialogue aimed at addressing this emerging vacuum.

While the U.S. cannot be excluded from this conversation, it is clear that it cannot lead it, nor can China.

Despite its shortcomings, the European Union possesses the credibility necessary to act as a mediator capable of harmonizing conflicting interests.

One might be tempted to regard Trump’s withdrawal from long-standing external obligations as a temporary anomaly.

In reality, it signifies profound transformations in U.S. perceptions of its role on the global stage.

For America’s allies, this situation highlights the risks of depending on unpredictable and dysfunctional U.S. political dynamics to produce favorable administrations.

Europe is still grappling with the aftermath of Trump’s return, yet the EU stands uniquely equipped to facilitate a global re-assessment of the international architecture surrounding the Bretton Woods institutions and the UN.

This does not imply eliminating them; rather, it involves modifying them to suit a rapidly evolving world, in which the influential G-7 nations comprise merely a diminishing fraction of the global populace.

The European Union has its vulnerabilities, but it holds credibility as a negotiator capable of balancing competing pressures.

The EU can collaborate with China and other emerging powers in ways that a U.S. adhering to an “America First” agenda cannot.

What should a reform agenda for the global rulebook encompass?

Clear suggestions are required from rising superpowers contesting the decision-making processes within the IMF and the World Bank.

China possesses 6 percent of the voting power, while America’s 16.5 percent grants it a veto over any proposed decisions.

A comprehensive overhaul is long overdue, as is reform for many UN agencies.

Wealthy nations, including the U.S., dominate trade, developmental aid, and climate policies, fostering significant resentment among ascending superpowers like China,

India, Brazil, Indonesia, and numerous other emerging giants.

The representation and financial frameworks within the IMF, World Bank, UN agencies, the WTO, and WHO—including their headquarters—require transparent discussions to recalibrate international decision-making and to adjust the conditions that reinforce economic advantages.

It is challenging to determine how such discussions might commence in today’s charged atmosphere.

China advocates for a ‘multi-polar world’ but lacks the requisite cultural and political openness essential for leadership.

Russia’s involvement in BRICS prevents this burgeoning bloc from significant participation.

This positions the EU as the most credible actor.

Donald Trump has unintentionally opened a Pandora’s Box that U.S. policymakers have long wanted to keep sealed.

Incorporating the U.S. into a discourse on a new rulebook will not be straightforward due to its preeminent geopolitical stature.

Trump, however, is retreating from international obligations that he perceives as exploitative of America.

He appears determined to diminish the value of the ‘almighty dollar’ to enhance export competitiveness, while overlooking the significant risks involved.

Although U.S. debt has surged to $36 trillion, it has been largely manageable due to foreign investments in treasury bonds.

A depreciating dollar would diminish investors’ returns and pave the way for the euro to emerge as a more competitive international reserve currency.

Trump’s emphasis is on reviving U.S. manufacturing capabilities, yet America’s strength is more rooted in its multinational corporations, particularly the digital and internet behemoths.

Regulation of these entities in the age of AI is a pressing issue that provides leverage for competing nations.

Moreover, U.S. dominance in financial markets and monetary policy faces jeopardy if investors become anxious regarding Trump’s excesses.

So, how might a global dialogue be initiated?

It is improbable that governments in Europe or beyond will wish to officially initiate anything, yet they may endorse efforts toward a revised and bolstered international rule of law.

Think tanks, NGOs, and policy advisors could kickstart an informal global dialogue as an initial measure.

Once the parameters for discussion are established, a more structured framework could eventually develop.

At this moment, with the conflicts in Ukraine and between Israel and Palestine still unresolved, the prospect of a new rules-based international framework appears bleak.

However, Donald Trump has inadvertently opened a Pandora’s Box that U.S. policymakers have long sought to keep closed.

Transforming the global rulebook will require concessions from wealthier nations and is inexorable at some point.

Thanks to Trump, it is likely to occur sooner rather than later.

*The opinions expressed in this Frankly Speaking op-ed are solely those of the author and do not represent Friends of Europe.

*This article first appeared on the Friends of Europe website and is reproduced with kind permission.

*The views expressed by the author of this article, Giles Merritt, do not necessarily reflect those of The Bulrushes