Trump, the Dragonbear, and the bipolar World Order 2.0

You powerful eagle, me formidable dragon, Stephff

Major change is on the way, and what awaits us is a week full of surprises in terms of geopolitics and geoeconomics. It starts with the NATO summit in Brussels, during which the member states will discuss how to further strengthen the collective defence and deterrence but also deepen the cooperation with the EU, modernise the alliance and increase the defence investments.[1] The expectations for a constructive dialogue on how to make NATO more agile and adaptive, however, will collide with Trump’s demands on fairer burden-sharing and his divergent priorities about the future of the alliance.[2] It will also reveal that there is a growing gap between Trump’s define goals and those of the other member states when it comes to how this unique strategic bond called NATO must be shaped and preserved in the future. This would also mean that the core of it — which are the common values, norms and rules — would be shaken in an unprecedented way. In Trumps eyes, it is no longer about the size and the expense of the American troops but also about the national interests and goals linked to their presence that are now changing. The pressure for more engagement and involvement on the side of Trump will be further extended to real threats of US troops’ withdrawal from Europe and particularly from Germany.[3] Despite all efforts to mitigate an emerging crisis, it will remain open how NATO and its member states will cope with the more assertive US security policy under Trump who no longer sees the need for the unique defence alliance in the West as it is. Even worse, he called Europe “as bad as China” on trade.[4] The European Budget Commissioner Günther Oettinger also warned that “there will be a trade war” between the EU and the US.[5] Additionally, China pressed Europe for anti-U.S. alliance on trade as well.[6] Obviously, the nexus between security and non-security issues matters as much between strategic allies as in great competitors’ strategies.

Just a few days ago, in an unexpected move, Ray Dalio, the founder of world’s largest hedge fund — Bridgewater Associates — announced on Social Media[7]: “Today is the first day of the war with China.” And a day earlier, Trump made a statement about the upcoming summit in Helsinki, claiming that: “Putin’s fine. He’s fine.”[8] One might wonder what the former message has to do with the latter, and how all these contradictory statements fit together. In fact, they make sense if seen through the prism of an emerging bipolar World Order 2.0, which is about the systemic rivalry between the USA and China, and the unique position of Russia in between.

It has become apparent that most of the decision-makers, experts and scholars mistook the end of the US-led unipolarity for the beginning of multipolarity and thus overlooked the emergence of the Global System bipolarity[9] as well as the creation of the Dragonbear[10] (an unique systemic bond between China and Russia as opposed to the USA). Furthermore, the Global System has become too unsustainable regarding its main (man-made) socio-economic components of global finance, monetary, economy, trade, and energy networks[11], and, as a consequence, is now being shaped by the unprecedented systemic rivalry between the USA and China, with Russia, the EU and India being the free riders, which leads to unexpected new alliances like the Dragonbear or the one between the USA and India, and might also result in the breakup of the NATO and the EU in the long term. Logically, prominent think tanks and mass media began raising the alarm on these issues such as the Council of Foreign Relations (Liberal World Order, R.I.P.)[12], the Financial Times (US-China rivalry will shape the 21st century)[13], the Economist (The Western alliance is in trouble)[14], Bloomberg (If America Retreats, China Will Reshape Global Norms)[15] and many more. However, they have been quite late for making an accurate diagnosis on the Global System and the polarization of the global order.

Against this background, the Helsinki meeting between Trump and Putin on July 16[16] is expected to mark the beginning of the bipolar World Order 2.0. Back in 1975, the West and the Soviet Union bloc met in Helsinki to negotiate and sign a final act with ten principles that have been guiding their relations until now, among which the principle of sovereign equality, the refraining from the threat or use of force, inviolability of frontiers, the territorial integrity of states, and the non-intervention in internal affairs.[17] Indeed, these principles were constantly deteriorated by the actions of single states or organisations over the last decades but were at least recognised by all actors of the global affairs. However, Trump and Putin might declare new rules of the game, which will reflect the growing great powers competition and the flux of the global affairs. The meeting between Trump and Putin tête-à-tête will most likely address the broader picture of the geopolitical and geoeconomic interests of the two actors in the Middle East and beyond, particularly avoiding sensitive issues such as Ukraine, Syria (except for the sake of coordination efforts) or energy sanctions, and will specifically focus on North Korea, Iran and nuclear non-proliferation.

In this geopolitical context, Trump will clearly seek to break the Dragonbear by playing out China and Russia against each other and by coming closer to Russia, which is why the Helsinki summit was more important for him in the first place. What is the common denominator for Trump and Putin? It is the end of the Helsinki world order, which will also mark the destabilization of the Western bloc of the EU and the NATO countries. Trump will further seek to divide the EU and the NATO institutions because he is not interested in blocs but rather in bilateral agreements, partnerships and alliances with single EU and NATO members, which are loyal to the American interests and comply with Trump’s agenda.

In an emerging system bipolarity, the Trump-Putin Summit is clearly meant to be the antidote of the Dragonbear. In this triangle, the EU is clearly on the losing side with any of these two system poles for both ideological and security reasons. Furthermore, these developments might endanger the EU project by creating new dividing lines among the EU members along American and Russian interests in the Old Continent. In this sense, the EU and its members must put the European interests first in order to navigate through the complex triangle relations between the USA, China and Russia in the emerging bipolar world order.

Following the systems analysis on major transformation processes[18], the most significant developments so far have been linked to North Korea (still urgent), the growing systemic rift between the USA and the Dragonbear (upcoming) as well as the increasing risk of potential financial crash (high risk of system collapse). Interestingly, Germany’s Merkel has already warned of looming financial crisis and blamed it on the USA.[19] The spiral of trade conflicts[20], mutual economic and financial sanctions, as well as currency and diplomatic crises will be further triggered by regional tensions along major lines of conflicts, in which regional actors will be eventually confronted with an either/or choice to align with Trump’s America or Xi Jinping’s China. The first litmus test for the bipolar World Order 2.0 will be Iran. Trump has already “ordered the entire world to cut off Iranian oil imports by early November,”[21] resulting eventually in a total blockade with unprecedent consequences for allies and rivals in the region and beyond.

[1] https://www.nato.int/cps/en/natohq/news_155276.htm

[2] https://www.reuters.com/article/us-usa-trump-nato/trump-will-tell-nato-nations-u-s-cannot-be-the-worlds-piggy-bank-idUSKBN1JT2XD

[3] https://www.washingtonpost.com/gdpr-consent/?destination=%2fworld%2fnational-security%2fus-assessing-cost-of-keeping-troops-in-germany-as-trump-battles-with-europe%2f2018%2f06%2f29%2f94689094-ca9f-490c-b3be-b135970de3fc_story.html%3f

[4] https://www.vox.com/world/2018/7/1/17522984/europe-china-trade-war-trump

[5] https://openeurope.org.uk/daily-shakeup/conservative-eurosceptic-mps-say-they-will-not-support-a-uk-eu-deal-that-doesnt-deliver-on-key-brexit-pledges/#section-6

[6] https://www.reuters.com/article/us-usa-trade-china-eu-exclusive/exclusive-china-presses-europe-for-anti-u-s-alliance-on-trade-idUSKBN1JT1KT

[7] https://twitter.com/RayDalio/status/1015306874705666051

[8] https://www.nytimes.com/2018/07/05/us/politics/trump-montana-rally-warren-tester.html

[9] https://medium.com/@vtchakarova/geopolitical-sleepwalking-the-systems-bipolarity-everyone-is-currently-overlooking-f4a41a78b7f1

[10] https://medium.com/@vtchakarova/the-russia-china-alliance-what-does-the-dragonbear-aim-to-achieve-in-global-affairs-e09b1add1c4a

[11] https://medium.com/@vtchakarova/the-global-system-ripe-for-a-paradigm-shift-78cebc942492

[12] https://www.cfr.org/article/liberal-world-order-rip?utm_medium=social_share&utm_source=tw

[13] https://www.ft.com/content/5f796164-3be1-11e8-b9f9-de94fa33a81e

[14] https://www.economist.com/leaders/2018/07/05/the-western-alliance-is-in-trouble

[15] https://www.bloomberg.com/view/articles/2018-07-06/u-s-retreat-would-make-china-s-values-the-new-normal

[16] https://www.washingtonpost.com/gdpr-consent/?destination=%2fpolitics%2ftrump-and-putin-will-meet-july-16-in-helsinki-washington-and-moscow-announce%2f2018%2f06%2f28%2f93043146-7ac3-11e8-80be-6d32e182a3bc_story.html%3f&utm_term=.849b523bf2ae

[17] https://www.osce.org/helsinki-final-act?download=true

[18] https://medium.com/@vtchakarova/should-we-brace-for-storm-while-navigating-through-2018-9e4164f00d9c

[19] https://www.bloomberg.com/news/articles/2018-07-04/merkel-raises-specter-of-financial-crisis-in-trade-war-warning

[20] https://www.reuters.com/article/us-usa-trade-china/china-commerce-ministry-warns-u-s-tariffs-will-hit-global-supply-chains-idUSKBN1JV063

[21] https://www.telegraph.co.uk/business/2018/07/04/trump-showdown-iran-leaves-world-hostage-violent-oil-shock/