As per the current dispensation, for far too long, adversaries and allies alike have been taking advantage of the US. America has now decided that it must change its strategic approach and be much more transactional and ruthless in its dealings.
Wars were easy to define but now most countries do not know when they are at war and with whom they are engaging in conflict. This is because kinetic means are no longer the dominant tool in imposing a nation’s will.
Ever since President Trump returned to power this has been even more evident and he has not distinguished between friends and foes as he concentrates on reshaping the world and is no longer willing to underwrite the expenses.
The policy shifts include territorial claims and economic threats. He has expressed a desire to make Canada the 51st state, annex Greenland, and the Panama Canal and get Gaza Strip under direct American control. Apart from that he has cut the tap as far as supplies to Ukraine go and has shown Europe a mirror as regards the US underwriting their security bill. He has also expanded his trade offensive against China, Canada and Mexico.
A HISTORICAL PRECEDENCE
While there may be a sense of alarm the fact is that during the Cold War, the US resorted to economic coercion against allies. While administrations differed from Trump in tone, but the message of the threats was often similar: follow US policy or face serious economic damage.
In 1948, for example, the Truman administration threatened to suspend the Marshall Plan from the Netherlands unless they abandoned their counterinsurgency against the Indonesian nationalist movement. The US felt that the Indonesian nationalists could be counted on as allies in the Cold War and therefore threatened to cut off aid, which forced the Dutch to grant Indonesia independence within a year.
The Suez crisis in 1956, again demonstrated strong US economic pressure. After France, Israel, and the UK invaded Egypt, President Eisenhower made it clear the US would no longer support Britain’s postwar economy unless it halted its attack. He told British Prime Minister Anthony Eden pointedly that “if you don’t get out of Port Said tomorrow, I’ll cause a run on the pound and drive it down to zero.” Eden gave way. Similar threats against Paris and Tel Aviv also secured the withdrawal of French and Israeli forces. The Suez crisis marked the end of British imperial ambitions in West Asia.
In the 1970s, when South Korean President Park Chung Hee pursued a nuclear weapons program, the Ford administration used threats to freeze US government lending and reconsider its security relationship with South Korea. France eventually decided not to deliver a reprocessing facility to South Korea in 1975.
During his first term, Trump imposed sanctions against Iran’s and Venezuela’s oil exports. These had a crippling economic effect but produced no political shifts. Sanctions were passed against Iran, North Korea, and Russia in 2017 and the US initiated an economic assault on Huawei, ZTE, and other Chinese tech giants. Trump’s tariff war against China resulted in a trade deal in 2020, but China did not meet its commitments to increase purchases of American goods. Eight years later, Iran, North Korea, and Russia have only drawn closer together, while Chinese tech firms led by Huawei have grown stronger. In 2019, the US used sanctions to force Turkey, a fellow NATO member, to rein in its proxies fighting US backed Kurdish forces in Syria. The following year, they again imposed economic penalties on Turkey for buying Russian S-400 antiaircraft missiles.
GAZA CEASEFIRE
On 5 March President Trump threatened further destruction of Gaza if all remaining hostages were not released. Trump also warned of repercussions for Gaza as a whole, where virtually the entire population has been displaced. Yet on the other hand the US confirmed unprecedented indirect talks with Hamas, which it proscribes as a “terrorist” group, focused on the release of the five American hostages in Gaza. The talks were held in Doha.
UKRAINE & EUROPE
There have been recurring strains in the US -Ukrainian relationship under both Trump administrations. The recent Oval Office blow-up between the two Presidents is only the most recent example. But such tensions need not derail a push for peace which is what most people across the globe want. How the war is resolved, and specifically on what terms, is of utmost importance for Ukraine, Russia, and the future of Europe. The outcome is also of consequence to the US as the Trump administration cannot be burdened in the way the way the Biden administration was by mishandling the withdrawal of US troops from Afghanistan.
But ending the war will also require increasing economic pressure on Russia, to incentivise Russia to wind down the conflict while holding out the prospect of improved economic relations if a negotiated peace agreement is reached. It’s not something that is easy to calibrate. The fact is that stopping a war is more difficult than starting a war.
When President Trump told President Zelenskyy that “you don’t have the cards right now” it was a reminder of the strategic balance of power as articulated by Thucydides in the Melian dialogue: “the strong do what they can, and the weak suffer what they must”.
But a crucial point made in the Oval Office was President Trump’s advice to President Zelenskyy stating: “You are gambling with World War III.”
A “coalition of the willing” is being hustled together. Keir Starmer and Emmanuel Macron insist they want to put “boots on the ground” in Ukraine, ostensibly to strengthen Zelenskyy’s hand in the event of a ceasefire. Most analysts see this as a as a red flag for Putin. After all, Russia waded into Ukraine to prevent the possibility of having NATO members on its borders. But European leaders know that Russia will never accept them as neighbours.
TARIfFS THE NEW TOOL OF WAR
Tariffs are another visible part of this new strategic approach. By imposing tariffs on countries that do not align closely with Washington’s priorities, the US has effectively raised the price of entering the American market. If countries want a lower price, then they must also lower the barriers that prevent American businesses from fairly competing in and taking advantage of market opportunities on their own turf. And if this is not possible, then other concessions in the strategic and national security domains must be made.
The size of the US market gives commercial threats potency, particularly against countries who are completely dependent on the US for trade. Take the case of Denmark. The popularity of the diabetes and weight loss drugs Ozempic and Wegovy has turned the Danish pharmaceutical company Novo Nordisk, into the most valuable company in the European Union. Novo Nordisk’s sales in the US market are now growing at 30% annually; its total net sales of $42 billion amount to 10% of Denmark’s GDP making Denmark a target for economic blackmail with regard to Greenland.
But on the obverse, tariffs can be detrimental, unless own domestic production is cheaper than the goods imported with enhanced tariffs. This will only drive up inflation with the bill being paid by the consumers.
Apart from countries, institutions such as the World Bank and IMF may also be targeted. Whether this would be an effective strategy remains to be seen, but the reality is that institutions, bureaucracies, and personnel that continue to operate as per the old rules of American engagement will all be jolted into conforming to the constantly changing dynamics.
CONCLUSION
There is no doubt a major shift is taking place where the free movement of trade, capital, and people were seen as positives. In addition, the view was that American influence largely was derived through the provision of goods. The Trump administration does not subscribe to these beliefs, and it sees access to American markets, capital, and security as a point of leverage through which the US can and must demand certain strategic and economic concessions from both friends and foes.
As per the current dispensation for far too long, adversaries and allies alike have been taking advantage of the US. America has now decided that it must change its strategic approach and be much more transactional and ruthless in its dealings.
The Trump administration is going about reshaping the post-Cold War world order. The foundational belief driving this shift is that access to their market and the broader international system aligned with the US is a privilege and cannot be taken as a right. The fact is that the tools of waging war are getting harder to define.
* Maj Gen Jagatbir Singh, VSM (Retd) was with the Indian Army.