The US Seems to Be Deliberately Weakening its Global Position

Alliances Win Wars, Great Powers Do Not

I am taking this out of paywall as I refer to it in a piece from March 16, 2026

Hi All,

I’m going to start with a broad and crude chart of economic size—it measures the Gross Domestic Product (GDP) of the US and China and one other group.

This chart, btw, significantly overstates the US economic advantage over China in a number of ways. First, it is raw GDP, no adjusting for purchasing power (which some believe is a much more accurate guide to economic strength). If you adjust for Purchasing Power (PPP), the graph is quite different—and China takes a significant size lead over the USA.

Btw, those who are crowing about US economic growth of the last few years tend to only look at the first chart—and ignore the fact that US GDP size growth is to a large degree been inflated by the strength of the US$. They ignore the PPP data—which shows a very different picture indeed.

There are a number of different ways the first chart overstates US advantage, in a strategic sense. Much of the US economy is services—while manufacturing has fallen off a cliff. China can produce far more material than the US, even with its GDP being much smaller. And in the case of war, the ability to produce will matter a great more than the ability to muster legions of well-paid Wall Street lawyers (at which the US would excel). Just one example is world shipbuilding. Looking at a chart of global shipbuilding capacity from 2013-2026 (est) Chinese strength is clear (as is that of Japan and South Korea). The US barely figures as a shipbuilding nation—and is crammed in the tiny rest of the world category.

In other words—in war-fighting potential the US certainly would punch below its raw economic weight vis a vis China. Nor can it automatically count on a major technological advantage of the type that it had in the Cold War. Chinese high-tech is showing some important strengths—you only need to look to the recent announcement of the Chinese company DeepSeek’s advance in producing a much cheaper and less energy demanding AI to see what China is capable of doing. This one Chinese advance, btw, wiped $1 trillion off the value of US high tech companies.

All this evidence supports the idea that in broad economic terms, the US and China are more closely matched than any economic rivals since the US started rivalling and then passing the British in the 19th century.

All three charts also show the great relative strength of the mystery group; the “?”. Actually I’m sure that many of you have figured it out. Its what I’m calling the Democratic Allies (DAs) of the USA; the European Union, the UK, Japan, Australia and South Korea. The US has military alliances with all of these countries (the stance with Taiwan is more ambiguous—which is why I left it out of the mix), they are functioning democracies, all of whom have leaderships who would like these defense relationships to continue, and all have shown a willingness to follow the US’s strategic leadership over the previous 75 years.

note—I also left Canada out of the calculations by mistake—which would make the DA group even larger.

Its the DA group with which the US won the Cold War and with which it instituted what has been referred to as the “global rules based order. Indeed I would go as far to say that it was the alliance between the DA group and the USA which determined the shape of the modern world—and had that grouping not come together, we would be in a very different place.

The strength of the DA group comes from the fact that they are economically successful, possess vibrant and creative societies, and democratic politically. They were also ideal allies. The DA group provided an enormous amount of support to the USA while never challenging US supremacy—the dream alliance combination.

In comparison the USSR’s allies during the Cold War, such as the Warsaw Pact, were more like shot-gun partners. Their populations resented the dominance of the USSR, and their rulers were only kept in power by the threat of overwhelming Soviet military force. When that was withdrawn, the whole edifice crumbled in days. In the end, it is arguable that the Warsaw Pact was as much a burden as a support to the USSR during the Cold War.

The DA group, on the other hand, was a huge benefit for the US. It was full of allies who would have been willing to (and did) fight for US interests, allies who made some of the most advanced equipment in the world, who had technologically conversant populations and which actually provided certain capabilities that the US did not and does not possess.

Today, in any war with China that did not end quickly (ie—a normal war) the US would be at a huge disadvantage if it did not have the ability to tap into the shipbuilding capacities of its DAs in Asia and Europe. The same would be the case in areas such as ammunition and UAV production—all areas in which the USA lags far behind China.

I would go even further. There are three scenarios for the USA to consider—one where it remains the dominant force on the globe, and two others which would be very different. They are: 1) the maintenance of the present DA grouping, 2) the growing neutrality of the DA allies, 3) The loss of the DA allies.

The first is where the US was on January 20. It still had the strength of the DA alliances underwriting its own strength. It meant that in any confrontation in the Indo-Pacific, the US would have the backing of a much larger and more advanced economic/technological group of allies than the Chinese.

However the second two are now very much in game because of what we have seen. Since becoming president, Trump has threatened European states (Denmark) with military force or crippling tariffs, has cozied up to China (which is being understood in Taiwan, Japan and South Korea) and even hinted that he would like to absorb Canada or likewise hit Canada with punitive tariffs. He has also threatened US allies outside of the DA group such as Colombia and Panama.

At the same time, Trump is actively courting the enemies of the DA group. He has made clear his continuing good relationship with Putin and made no commitments to the future security of Ukraine. His affection for the Chinese leadership seems to grow daily—and he is walking back his threat of tariffs on China.

If either 2 or 3 come about, the US ability to deter China or even fight a war against China would be greatly undermined.

So, Trump’s foreign policy seems designed to deliberately undermine the greatest strategic success of the USA since 1945—the creation of the DA world. If it is lost, the US will be the most weakened power.

However, maybe that is the point of what we are seeing.