Global Cooperation in the Age of

Trump
Jan 7, 2025 |GEORGE PAPACONSTANTINOU and JEAN PISANI-FERRY

PARIS – With Donald Trump’s presidential inauguration approaching, the mood in Brussels and across European capitals ranges
from panic to resignation, with many hoping that a transactional modus vivendi might be found. But ad hoc dealmaking will not
answer the big question hanging in the air: What will another Trump presidency mean for global cooperation? What hope is there
for collective efforts to safeguard global public goods such as the climate and public health, and to preserve prosperity by
upholding economic interdependence?
Trump’s election is undoubtedly bad news for those who believe that we all have a duty to the global commons, and that
interdependence must be managed with clear, stable, and consistent rules. Trump is a die-hard nationalist who fundamentally
regards global governance as an obstacle to American primacy. Rather than adhering to principles and rules, his approach is
wholly transactional. He has already threatened Canada and Mexico with trade tariffs unless they stop fentanyl and migrants from
entering the United States, as well as warned the nine BRICS countries that any attempt to create a rival to the dollar will be met
with harsh retaliation and told Europe to buy more oil and gas from the US or face tariffs.

Worse, there is good reason to think that Trump is not a temporary aberration, as US President Joe Biden said in 2020, but rather
an aberrant expression of a fundamental shift in US attitudes toward global leadership. With America tiring of its longstanding
role at the helm of the international community, the world has come to a crossroads. Recall economic historian Charles
Kindleberger’s analysis of the Great Depression: the crisis reflected not only Britain’s relative loss of power but also America’s
unwillingness to assume the mantle of global leadership.

Since World War II, however, the US has fully embraced that role – one that combines exorbitant privileges with outsize duties.
America reaps enormous benefits from the US dollar’s global supremacy – which provides international seigniorage revenues,
among other things – while bearing responsibility for global monetary and financial stability. This implies providing dollar
liquidity to partner central banks in times of monetary stress (as in 2008-10) and keeping the US goods market open when global
demand is low.
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But the US no longer accepts this implicit contract, and today’s world is too fragmented and diverse for any single country to
dominate. Though America remains the sole financial superpower (with a near $60 trillion stock-market capitalization, against
China’s $9.5 trillion, and an even larger lead in innovative market segments), it no longer wants the obligations that come with
leadership. Europe’s declining demographic and economic weight have effectively eliminated it from the running. And China is
too inward-looking to become the next hegemon. It may be the world’s manufacturing superpower (accounting for 35% of global
production), but it is a long way from assuming global responsibilities.

Fortunately, not all problems require leadership from a single dominant country. In the third decade of the twenty-first century, the
world must move to new arrangements whereby global responsibilities are more widely distributed. In New World New Rules:
Global Cooperation in a World of Geopolitical Rivalries, we analyze governance arrangements across a variety of policy domains
– from the global commons to traditional economic interdependence and what we call “behind-the-border integration” issues. In
each case, the goal is to salvage collective action in a world defined by fragmentation and divergent preferences.
On climate, the most emblematic – even existential – global commons, the US is likely to repeat its withdrawal from the 2015
Paris agreement (which the Biden administration rejoined). But the US is a secondary player here, accounting for only 13% of
global emissions, and many US state-level emissions-reduction efforts will continue. Moreover, the European Union and China
could jointly provide the necessary leadership to rally big emerging economies, mobilize private financing toward net-zero
targets, and galvanize civil society.
On international trade, the main channel of economic interdependence, Trump’s tariffs could be the final nail in the coffin of the
multilateral rules-based regime. He will attempt to divide European countries by differentiating tariffs to punish or blackmail
individual governments. Still, Europe can resist by maintaining a united front (along with the United Kingdom). That would allow
it to offer Trump a deal that includes energy and defense purchases, retaliate effectively, or form coalitions with third countries
(hence the importance of the EU’s recent trade agreement with Latin America’s Mercosur countries).

In any case, it has become apparent that prevailing multilateral trade rules are too demanding for a fragmented world. The EU
should liaise with key partners to distinguish behavior that is truly unacceptable from behavior that is merely undesirable.

On macro finance, the other main channel of international economic interdependence, the trend toward deglobalization began
some time ago. While the institutions at the core of the system (the International Monetary Fund and the World Bank) remain
robust, Trump could use America’s veto power to change their policies on a range of issues, not least climate mitigation and
adaptation – which accounted for a whopping 44% of World Bank loans last year.

To preserve the international financial safety net, Europe should focus on the complementarities between regional institutions. But
to foster constructive cooperation, it will need to accept that its role in the main global organizations should be diluted to
accommodate the rise of China and various middle powers.

Beyond these core policy areas are behind-the-border integration matters such as competition, banking, and tax governance,
where widespread acceptance of extraterritoriality and informal networks can produce desirable results even in the absence of
hard rules. Tax cooperation seems unlikely to survive another Trump administration, at least as far as multinationals are
concerned; but some technical discussions and processes could still continue below the radar. A more incremental, granular
approach may be the best way to preserve the progress that has been made to date.

On all these issues and more, policymakers will have to adapt to a world in which no single power is in charge. That requires
defining, for each field, which forms of global governance are best suited to an irreversibly more diverse and more fragmented
terrain.

GEORGE PAPACONSTANTINOU
George Papaconstantinou, a former finance minister of Greece who negotiated the country’s first bailout, is the author of Game
Over – The Inside Story of the Greek Crisis and the co-author (with Jean Pisani-Ferry) of New World New Rules: Global
Cooperation in a World of Geopolitical Rivalries (Columbia University Press, 2025).

JEAN PISANI-FERRY
Jean Pisani-Ferry, a senior fellow at the Brussels-based think tank Bruegel and a senior non-resident fellow at the Peterson
Institute for International Economics, is a professor at Sciences Po and the co-author of (with George Papaconstantinou) of New
World New Rules: Global Cooperation in a World of Geopolitical Rivalries (Columbia University Press, 2025).

https://prosyn.org/jyYytuj

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