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For much of 2025, global geopolitics was shaped by a familiar assumption, that the world economy, strategic stability, and political signalling still ran decisively through the United States. That assumption was not unfounded. The US remains the world’s largest economy, the issuer of the reserve currency, and the most powerful military force. Decisions taken in Washington continue to move markets and influence capitals across the globe.
Yet as 2026 unfolds, a subtle but important shift is becoming visible. Countries are no longer merely reacting to American power. They are beginning to hedge against it.
This is not a break from US leadership, nor the emergence of a clear alternative order. It is a recalibration. Even America’s closest allies are diversifying economic partnerships, reassessing security dependencies, and reopening channels that were once politically constrained. The centre of gravity is no longer singular. It is fragmenting.
2025 and the limits of American centrality
The story of 2025 was one of dominance mixed with unpredictability. US monetary policy shaped global capital flows. Its trade posture influenced supply chains. Its political rhetoric, particularly under President Donald Trump’s second term, set the tone for international engagement.
But that year also revealed the costs of an increasingly transactional and coercive approach to diplomacy. Canada was repeatedly mocked as the “51st state,” its prime minister publicly demeaned as a governor. Greenland was discussed less as a partner and more as a potential acquisition. Venezuela and Iran were addressed almost entirely through pressure. Latin America encountered a satirical revival of the Monroe Doctrine, now often referred to as the “Donro Doctrine,” signalling that great powers could impose their will without consequence.
These moves projected strength. They also bred resentment and mistrust.
2026 and the rise of hedging behaviour
In 2026, the response to that posture is becoming clearer. Countries are not abandoning the US. They are insulating themselves from overdependence.
India’s trajectory is particularly instructive. The India–EU Free Trade Agreement negotiations have gained momentum. India has deepened economic and strategic engagement with Australia. Relations with Canada are showing signs of repair, driven by recognition that prolonged estrangement is economically counterproductive. At the same time, New Delhi has sought to stabilise ties with China, not through grand reconciliation, but through pragmatic easing of constraints that allow better market access and supply chain predictability.
None of this suggests India has chosen sides. It suggests India has chosen options.
A similar logic is visible elsewhere. The UK’s renewed outreach to China under Prime Minister Keir Starmer reflects Europe’s discomfort with being forced into binary alignments. Canada, under Prime Minister Mark Carney, is also reopening economic channels with Beijing despite domestic political risks. The EU’s trade engagement with Mercosur countries signals that even traditionally Atlantic-oriented economies are building buffers.
This is hedging, not defection.
China’s expanding presence
China is a beneficiary of this shift, though not yet its master. Beijing has positioned itself as a patient alternative, offering market access without overt ideological demands. Its influence is no longer confined to Asia. It is expanding steadily into Europe, Latin America, and parts of the Global South.
China is not replacing the US as the global leader. Its financial system lacks openness, its currency lacks trust, and its political model limits appeal. But influence does not require leadership. It requires presence. And China’s presence is growing.
For Washington, this represents a strategic loss, even if it does not yet register as a crisis.
The hidden costs of bullying diplomacy
What is often missing from discussions of American power is an accounting of what the US is losing.
In 2025, several allies were expected to place major defence orders with American firms. Canada, Germany, and India were all seen as potential buyers of US fighter aircraft. Instead, those deals faltered.
India opted for a large Rafale acquisition worth roughly $40 billion. Canada is moving towards the Gripen instead of the F-35. These are not marginal decisions. They reflect a deeper hesitation about strategic reliability. The US defence industrial base remains unmatched, but trust, once eroded, is difficult to restore.
In civil aviation, India’s decision to engage with Brazil’s Embraer rather than deepen reliance on Boeing sends a similar signal. Even if the commercial outcome remains uncertain, the strategic intent is clear. Diversification is now policy.
Allies growing uneasy in Asia
The consequences extend beyond trade. In Asia, ambiguity has replaced reassurance. President Trump has stated that China will not move on Taiwan under his watch, yet has stopped short of explicit commitments. For allies such as Japan, South Korea, the Philippines, and Taiwan itself, this creates unease rather than deterrence.
If great powers are permitted to do as they wish, as Trump has suggested, the implications for Taiwan are profound. Even the perception of hesitation can shift calculations in Beijing. Asian allies are watching closely and quietly preparing for multiple outcomes.
A world beyond single-power bets
The US dollar hitting new lows in early 2026 is not the end of dollar dominance. But it reinforces the perception that American economic centrality is no longer absolute. Currency power rests on confidence as much as fundamentals, and political volatility erodes both.
The emerging pattern of 2026 is not anti-American. It is post-assumption. Countries are no longer willing to assume that alignment with Washington is sufficient insurance against uncertainty. They want redundancy, leverage, and room to manoeuvre.
For the US, the challenge is not China’s rise alone. It is the erosion of unquestioned trust among friends. Power can compel compliance. Leadership requires consent.
What is already clear is that the world is no longer organising itself around a single gravitational centre. It is learning to orbit many.
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