President Trump’s emerging foreign policy ideology is forcing US allies, including Australia, to reassess their strategic positions. As American leadership becomes increasingly transactional, Canberra must navigate a shifting global order by balancing security concerns with economic resilience, forging new regional partnerships, and maintaining strategic flexibility in an era of geopolitical uncertainty.

The clash between Donald Trump and Volodymyr Zelenskyy at the White House over the weekend was more than a personal spat or a bilateral dispute—it was a moment of geopolitical reckoning. The post-Cold War order—once defined by a rules-based international political economy and security alliances—is rapidly unraveling. Since returning to office, President Trump has revived a transactional and coercive brand of diplomacy—better described as “bully diplomacy.” Characterised by unilateral economic sanctions against major trading partners and coercive threats against allies, his approach undermines multilateralism and raises existential questions about the future of American leadership. 

For Australia, the implications of this shift are profound. Security has long been underpinned by its alliance with the United States, while prosperity has rested on trade with China. For decades, Canberra mostly walked this tightrope adeptly, but both pillars are now under strain. The restructuring of global supply chains, the increasing use of economic statecraft as a tool of foreign policy, and the erosion of institutionalised security alliances—amid intensifying great power competition—are converging to reshape the world order, and, with it, Australia’s diplomatic calculus. 

The End of Globalisation as We Knew It 

The Covid-19 pandemic exposed the vulnerabilities of hyper-globalisation, disrupting interdependent supply chains that had underpinned global production networks for decades. Governments have since pivoted towards security and resilience over efficiency. For example, countries have adopted strategies like “diversification” and “China-Plus-One” as pragmatic alternatives. Nowhere is this shift more apparent than in the scramble for critical minerals, essential for clean energy, semiconductors, and defense industries. 

John Mearsheimer’s offensive realism theory posits that great powers inevitably seek regional dominance through aggression. Trump’s policies extend this theory to a global scale, from territorial bargaining over Greenland and the Panama Canal to annexation rhetoric about Canada and demographic ultimatums over Gaza. His “Make America Great Again” doctrine conflates national renewal with international disruption, transforming US influence from a stabilising force into a tool of coercion. 

Zelenskyy’s refusal to sign the ceasefire agreement with the US exemplifies the Trump administration’s push to secure a lopsided reconstruction investment deal for Ukraine’s critical minerals, leveraging American dominance to extract economic concessions from its allies. Trump’s tactics reflect a modern form of neo-imperial opportunism. Unlike classical imperialism, which relied on sustained territorial control, his strategy employs asymmetric power—coercion and economic leverage—to reshape global dynamics, prioritising immediate advantage over long-term stability.  

Tariff wars against China, Canada, and Mexico expose Trump’s zero-sum mercantilism that weaponises economic interdependence and accelerates deglobalisation. His rejection of the WTO’s multilateral framework—once a cornerstone of US trade policy—signals a shift toward a world where trade is no longer a stabilising force but a battleground for economic dominance. In Trump’s new world order, the US alliances, including Australia, are treated not as partners but as transactional arrangements driven by cost-benefit calculations and extraction. 

Erosion of American Leadership 

Negotiations over a ceasefire and lasting peace in Ukraine reveal a deeper and more troubling reality about national defense: Trump’s coercion is not only aimed at adversaries, but also at allies. His threats to withdraw from NATO unless Europe increases defense spending and his push for Denmark to sell Greenland overturn decades of trust-building, recasting the US as a predatory power rather than a reliable security guarantor. 

The post-1945 US-led order was built on institutionalised alliances and American normative leadership. Trump’s rejection of that legacy, such as the dismantling of key institutions that underpinned US global influence, such as the closure of USAID missions, the withdrawal from the Paris Agreement, the defunding of the WHO, is not merely ideological but fundamental—suggesting that he views the liberal order as a “global racket,” actively dismantling America’s role as a provider of public goods. 

An Existential Test for Australia 

Australia’s actions on the world stage have always been shaped by its fear of abandonment—first by Britain, and since World War II, by the United States. Now, Australia faces a stark reality: its economic and security foundations are increasingly vulnerable to America’s transactional approach under Trump 2.0. Canberra has traditionally viewed the US as a steadfast security guarantor, shaping its defense strategy around that assumption. In response to Beijing’s growing assertiveness in the South China Sea, Australia joined AUKUS—a move that, despite a recent diplomatic thaw under Prime Minister Anthony Albanese, is likely to strain relations with China in the long run. While the Trump administration has publicly endorsed the pact, the president’s broader skepticism toward long-standing security commitments, including NATO, raises questions about the durability of US assurances.

China’s recent live-fire drills in the Tasman Sea underscore the shifting balance of power. Australia now faces a similar dilemma: accept Washington’s “America First” “surcharges” —including support for the US-led Minerals Security Partnership at the cost of its economic interests and strategic autonomy—or risk abandonment in a region where China’s navy overwhelmingly outmatches Australia’s, with a staggering 234 to 16 advantage in warships. Beyond sheer numbers, China’s fleet is newer, more technologically advanced, and backed by an unrivaled capacity and speed for shipbuilding. Beijing’s naval expansion is no sudden phenomenon but the result of more than two decades of deliberate planning to cement its status as a global maritime power. By staging drills off Australia’s southeast coast, China is not only testing Canberra’s response but also assessing Washington’s commitment to its ally at a time when the US is increasingly preoccupied with conflicts elsewhere. 

A New Diplomatic Strategy 

I suggest that diplomacy in an era of great power rivalry is not about choosing sides but about crafting a strategy that safeguards a nation’s long-term prosperity and influence. The Trumpian disruption is not just a fleeting populist episode but also a structural realignment in global politics. America’s shift from system creator and guardian to a more transactional, revisionist power has left Australia navigating a strategic vacuum that is increasingly difficult to fill. Unless institutionalists within the US foreign policy establishment can revive internationalism, the world risks descending into a neo-Westphalian era—one shaped not by American leadership but by its capacity for calculated self-interest. 

Henry Kissinger’s warning—“It may be dangerous to be America’s enemy, but to be America’s friend is fatal”—has never felt more relevant. Ukraine’s abandonment under Trump 2.0 is a stark reminder that US security commitments can be discarded at will. If America’s security commitments can be so easily discarded, what does that mean for its other allies? For Australia, the implications are profound. Having built its defense strategy on the assumption of unwavering US support, Canberra now faces the prospect of navigating an increasingly unstable Indo-Pacific without a guaranteed security backstop. Kissinger’s words serve as a cautionary tale—one that Australia must heed as it reassesses its strategic future in a world where alliances are no longer ironclad. 

Canberra has bolstered its deterrence through AUKUS, increased defense spending, and strengthened regional partnerships. Yet China’s growing assertiveness poses a deeper challenge: is Australia prepared for a future where US intervention can no longer be taken for granted? 

In an increasingly fragmented world, the US retreat from its role as the democratic West’s provider of global public goods and security guarantor is forcing allies to make difficult choices. However, Australia should not be forced into a Faustian bargain—trading core economic and strategic interests for short-term security assurances, often with unpredictable and potentially damaging consequences. 

As US foreign policy becomes more transactional and uncertain under Trump 2.0, and US-China competition escalates, Australia has gone from operating in an international system largely conducive to its interests to one where it feels increasingly isolated. To navigate this evolving landscape, Australia must adapt rather than simply align, ensuring it does not become a passive bystander in great power rivalries. This requires moving beyond its traditional reliance on the US security umbrella and toward a foreign policy that integrates broader economic and defense considerations.  

As global supply chains become increasingly regionalised, China has solidified its position as a hub in Asia-Pacific trade networks, particularly in clean energy transition and critical minerals production. For Australia, this presents both a challenge and an opportunity. It is critical to position itself as a key bridge—not just between Washington and Beijing, but across the Indo-Pacific—leveraging its unique position and strengths to maintain strategic flexibility and economic resilience in a shifting global order. 

Australia is not alone in facing this dilemma. While collaboration with China is essential for global clean energy transitions, and reliance on Beijing for critical minerals and advanced technologies is seen as a strategic vulnerability, few countries are willing to bear the economic costs of decoupling from China. Striking the right balance between engagement and risk mitigation will define Australia’s long-term prosperity and security, which depends on its ability to balance economic resilience with strategic autonomy. Managing relations with China will be particularly crucial. While tensions over security and trade persist, Australia must pursue a calibrated diplomacy—one that safeguards national interests while maintaining open channels for economic cooperation. At the same time, Australia must broaden its diplomatic and economic engagement—strengthening partnerships with countries like Japan, South Korea, and Singapore, deepening participation in multilateral trade agreements, and assuming a bridging role in green technology and critical minerals supply chains. 

Dr. Marina Yue Zhang is an associate professor at the Australia-China Relations Institute, University of Technology Sydney (UTS: ACRI). Prior to this position, Marina worked for UNSW in Australia and Tsinghua University in China. Marina holds a bachelor’s degree in biological science from Peking University, an MBA and a PhD from Australian National University. Marina’s research interests cover China’s innovation policy and practice, latecomers’ catch-up, emerging and disruptive technologies, and network effects in digital transformation. She focuses on industrial such as semiconductors, biotechnology and biopharmaceuticals, and clean energy transition. She is the author of three books, including “Demystifying China’s Innovation Machine: Chaotic Order,” co-authored with Mark Dodgson and David Gann (Oxford University Press, 2022). In addition to academic publications in technology and innovation, Marina also writes analysis pieces on the intersection of technology and international relations in The National Interest, The Diplomat, The Conversation, The Interpreter by Lowy Institute, East Asia Forum, and comments on science and technology issues on BBC News, Bloomberg TV and other news outlets.

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