By James D. Morrow
January 19, 2025 was the last day of the American Century.
More precisely and less melodramatically, the liberal international order created by the United States in the aftermath of World War II is gone.
Some would say, “Good riddance.” But my comments will focus on what has been lost with the demise of an order that sought to advance a world of democratic polities united in an open global economy.
I am focusing on the open global economy and specifically trade because I think the change there is clear and dramatic. (Questions about the security side of the liberal international order in practice are also worth asking, but the changes there are not yet as clear.)
The ascent of the liberal international order
The goal of an open global economy formed, in part, as a response to the Great Depression where the collapse of trade between 1929 and 1933, driven in large part by tariff walls and competitive devaluations, helped make the Great Depression a worldwide event. It was achieved through the lowering of tariffs, the creation of a stable exchange rate regime, and eventually the creation of the World Trade Organization to limit non-tariff barriers to trade.
Since World War II, the global economy has grown larger and faster than any other period in history. And trade has grown faster than the world economy, making it a larger proportion of the world economy. This growth has lifted billions of people around the world out of dire poverty.
Two things to understand about international order: First, it is not a set of ironclad rules. Practical politics in some cases requires compromises with the rules, institutions, and values embedded in an international order. Second, an international order, like any political order, prioritizes some interests and values over others, so it is not neutral or equally beneficial for all.
An international order is driven by the major powers to suit their interests, but it is more sustainable when others gain from it. They have less reason to challenge that order and are more likely to operate within it.
The liberal international order advanced the interests and values of the United States for decades. But it also offered the opportunity for other countries to benefit from the open global economy through trade and investment.
Doing so required curbing the ability of the United States to use its economic dominance to advance its particular interests at the expense of an open global economy. Multilateralism in trade, a novel feature of this order, was key.
When the General Agreement on Tariffs and Trade (GATT) was established in the late 1940s, 23 countries came together and offered reductions in their own tariffs and committed to non-discrimination among themselves. Negotiating in a multilateral setting reduced the ability of the U.S. to use its dominant economy as bargaining leverage.
Since then, the rounds of GATT leading to the establishment of the World Trade Organization used multilateralism and the rules and procedures of the WTO to limit the ability of large economies to flex their economic muscle to gain advantageous terms of trade.
The Cost of Tariffs
President Trump’s use of tariffs, in his first term and now, undermines both multilateralism and a rule-based order. It shifts trade negotiations back to a bilateral basis, between the U.S. and specific trading partners, and openly flouts WTO rules, instead of using those rules to justify them.
Although it is not clear yet whether Trump will erect permanent tariff walls around the U.S. economy or merely seeks to use tariffs as a negotiating ploy, either use threatens the open global economy.
In its place, they give him the power to use the leverage of access to the U.S. market to secure bilateral trade deals that favor the U.S. at the expense of its trading partners.
But the use of that leverage comes at the cost of alienating long-term trading partners.
One of the great advantages that the U.S. had during the Cold War was that most industrialized countries were aligned with it and not the Soviet Union. They did so in part because they benefited from the open global economy of the liberal international order. If that order is gone, they have less reason to align with the U.S.
Canada gives us a clear example of this shift. Prime Minister Justin Trudeau announced that he would step down because his Liberal party was headed into an election this year 20 points behind the Conservatives. By the time the Liberal party selected Mark Carney as their new leader and candidate to be Prime Minister, the Liberals had eliminated the 20 point gap. They are in a close race with the Conservatives. This happened because both candidates to replace Trudeau in the party adopted anti-Trump and anti-American positions, which are now popular with Canadians who feel they are being bullied by the Trump tariffs.
It is a sign of the cost of the demise of the liberal international order.
This expert opinion piece by James D. Morrow is based on his presentation at the second 2025 teach-in organized by University of Michigan faculty examining “US Democracy in Peril: National and Global Implications.” The independent, non-partisan event was held March 19, 2025, in the U-M Chemistry Building. Dr. Morrow’s research addresses theories of international politics, and his published work covers bargaining, the causes of war, military alliances, arms races, power transition theory, links between international trade and conflict, the role of international institutions, and domestic politics and foreign policy. Dr. Morrow is the A.F.K. Organski Collegiate Professor of World Politics at the University of Michigan and is an affiliate of the Center for Political Studies at the Institute for Social Research. Tevah Platt of the Center for Political Studies contributed to the development of this post.
