The Cold Order
Under the Trump administration, American interest in maintaining a liberal international order has been all but erased from recent memory. The U.S. has instead used its position to broker transactions that benefit the few, the rich. This is hard-edged transactionalism, formalised in the 2025 National Security Strategy and now solidified through bipartisan politics. Internationally, the muddy reality of America's diminishing capacity to garner support has been brought to the surface: the reputational damage of unprecedented sovereign debt, the erosion of the petrodollar, and the strategically reckless decision to strike Iran on 28 February 2026.
The coming new world order is cold. In a reality where the U.S. is trading away its ideological soft power, the global influence landscape is stale, with no rivals for a democratic hand in the pot. The emergent order is not multipolar in the classical Cold War sense, nor is it cold from a game of nuclear chicken; it is a bipolar techno-economic order huddled around two superpower hubs, the U.S. and China, with growing spheres of influence among middle powers. These middle powers are increasingly adopting a foreign policy of decoupling without deglobalisation. Trade volumes are near record highs, but the share of U.S. flows with China has fallen 42% since 2016. The new emerging order is selectively open within geopolitically aligned blocs and closed across them. Creating an environment of fragmented openness, or nationalised globalisation, in which states trade and invest only with trusted partners. Spheres of influence are organised around economic relations rather than expansive multilateral agreements. The result is transactionalism wrapped in a protective nationalism. The foundational norms of sovereignty, free trade, human rights and multilateralism are no longer shared, and now transactional deal-making has replaced the rules-based order. This is cold.
The order's coldness is largely attributable to the fact that China (a state of even greater relative influence now than before the war in Iran) projects power primarily through techno-industrial means. Its primacy on the world stage is built on state-directed dominance of the "new three" (electric vehicles, batteries, solar), critical minerals processing, digital infrastructure and weaponised supply-chain centrality, securing an unrivalled capability in the industries that will define the next decade. Beijing's aim, in the framing of the Institute for Peace and Diplomacy, is to erode U.S. global hegemony rather than to replace it with its own. China holds a non-interventionist global posture underpinned by a coherent sovereigntist counter-ideology. It is opposed not to an international order in principle but to a liberal universalist one. For the first time in modern history, with the demise of America's global standing, the world order is set to be without a leader committed to interventionist democratic ideals. Instead, we are entering a period of geopolitically aligned blocs with rising friction between them, because while the plates are shifting, no one is willing to be ground down.
China's current and future ascendancy reflects not its own consistent performance but the comparative self-destruction of its two largest competitors. Domestically, China is navigating significant strain: a five-year property crisis, declining investment, and credit growth at all-time lows. Fortunately for Beijing, its rivals are eroding externally faster than it is eroding internally. Russia's war has triggered Western restrictions on critical imports (semiconductors, AI, quantum computing) and exhausted Moscow in Ukraine. Coupled with America's short-term, transaction-oriented foreign policy, China will emerge from this period with greater relative ascendancy.
In the next phase of the world order, one of transactional deal-making and geopolitically aligned trading blocs, China, with unrivalled manufacturing power in the technologies of the future, emerges as both an exporting superpower and a leader of a cold order. This isn’t traditional triumphalist China-rise commentary, but rather observations on the stark reality of an ascendancy by rival attrition.
References
David A. Lake, "The End of the Liberal International Order? Globalization, Deep Contestation, and the Future," Chinese Journal of International Politics 19, no. 1 (Spring 2026): 10–24, https://doi.org/10.1093/cjip/poaf016. See also Andrew Latham, "Donald Trump's National Security Strategy Signals the Start of Imperial America," The National Interest, 1 January 2026, https://nationalinterest.org/feature/donald-trumps-national-security-strategy-signals-the-start-of-imperial-america. ↩
Mallika Sachdeva, cited in Lee Ying Shan, "U.S. Dollar Dominance, Reserve Currency Status, Debated amid Iran War," CNBC, 16 April 2026, https://www.cnbc.com/2026/04/16/us-dollar-dominance-reserve-currency-iran-war-oil-china.html; Sasha Rogelberg, "2 Years Ago, Saudi Arabia Quietly Cancelled the 'Petrodollar' Deal with America That Wired the World Economy for 50 Years. Then War Broke Out in Iran," Fortune, 7 April 2026, https://fortune.com/2026/04/07/what-is-petrodollar-petroyuan-saudi-china-dollar-strength/. ↩
"Iran's War with Israel and the United States," Council on Foreign Relations, Global Conflict Tracker, accessed 26 April 2026, https://www.cfr.org/global-conflict-tracker/conflict/confrontation-between-united-states-and-iran. ↩
Henry Farrell and Abraham L. Newman, "The Weaponized World Economy: Surviving the New Age of Economic Coercion," Foreign Affairs, December 2025, https://www.foreignaffairs.com/united-states/weaponized-world-economy-farrell-newman; Chatham House, Competing Visions of International Order (London: Chatham House, March 2025), https://doi.org/10.55317/9781784136383. ↩
Barthélémy Bonadio et al., "Decoupling without Deglobalisation: The New Geography of Trade Blocs," CEPR/VoxEU, 2025, https://cepr.org/voxeu/columns/decoupling-without-deglobalisation-new-geography-trade-blocs. ↩
DHL, Global Connectedness Report 2026, cited in "Global Trade Held Firm in 2025 Despite Rising Tensions," Logistics Middle East, March 2026, https://www.logisticsmiddleeast.com/analysis/global-trade-held-firm-in-2025-despite-rising-tensions. ↩
Lake, "End of the Liberal International Order," 10–24. ↩
World Economic Forum, "Made in China 2025 Set the Tempo of China's Industrial Ambitions," June 2025, https://www.weforum.org/stories/2025/06/how-china-is-reinventing-the-future-of-global-manufacturing/; Casey Crownhart, "China's Energy Dominance in Three Charts," MIT Technology Review, 10 July 2025, https://www.technologyreview.com/2025/07/10/1119941/china-energy-dominance-three-charts/. ↩
Institute for Peace and Diplomacy, "Unraveling China's Grand Strategy: Its Aim Is to Erode U.S. Global Hegemony, Not Seek World Domination," 26 February 2025, https://peacediplomacy.org/2025/02/26/unraveling-chinas-grand-strategy-its-aim-is-to-erode-u-s-global-hegemony-not-seek-world-domination/. ↩
Lake, "End of the Liberal International Order," 10–24. ↩
Daniel H. Rosen and Logan Wright, "China's Economy: Rightsizing 2025, Looking Ahead to 2026," Rhodium Group, December 2025, https://rhg.com/research/chinas-economy-rightsizing-2025-looking-ahead-to-2026/; World Bank, China Economic Update, December 2025, https://thedocs.worldbank.org/en/doc/600cd53e2bb24d516b8c3489e5d2c187-0070012025/original/CEU-December-2025-EN.pdf. ↩
"A War China Didn't Fight but Still Lost: Beijing's Strategic Setback after Ukraine," U.S.-China Perception Monitor, 23 October 2025, https://uscnpm.org/2025/10/23/the-impact-russia-ukraine-war-on-china/; Seth G. Jones and Riley McCabe, Russia's Grinding War in Ukraine (Washington, DC: Center for Strategic and International Studies, February 2026), https://www.csis.org/analysis/russias-grinding-war-ukraine. ↩