But instead of persuading other countries to join the efforts to isolate the Islamic Republic, the Trump administration has made yet another blunder, accelerating the transition to a post-American world order.
It is clear why the US’s ‘allies’ are in no hurry to support a costly and ill-conceived war of choice launched by President Donald Trump. No one consulted them beforehand, and they clearly do not wish to get involved in this conflict now that the US has failed to topple the Iranian regime or come up with a ‘Plan B’.
And who, indeed, can see any point in helping an administration that constantly berates its friends and partners, threatens to seize their territories (Greenland and Canada), and hits them with high tariffs?
There are two ways to win others over – through persuasion and through intimidation. But in Trump’s case, neither works. Aaron David Miller of the Carnegie Endowment for International Peace has drawn the correct conclusion: D-Day in this instance stands for ‘desperation day’.
Persuasion requires trust. Other countries must be confident that the administration is setting itself achievable goals and has the means to achieve them. But Trump has a well-deserved reputation as a liar, so no one believes a word he says. In June 2025, he claimed to have ‘completely and definitively destroyed’ Iran’s nuclear capabilities, whilst in March he announced that the US had ‘literally destroyed’ the Iranian army. A war that was supposed to last four weeks (or perhaps a little longer) has now been going on for seven months. And everyone – from the Iranians to the Canadians – knows that any agreement signed by Trump will be as durable as a paper napkin.
Bessent was supposed to be the most authoritative member of the cabinet. But today he has squandered that authority through his failed attempts to manipulate the bond and currency markets. There can be no doubt that his real motive was a desire to show his boss that he was ‘doing something’. But why do Trump a favour when, as early as tomorrow, he might turn on you, just as he has already done to virtually everyone who previously served him obediently?
Since persuasion is impossible, Trump is left with only one course of action (and, incidentally, it is the one he always prefers): to intimidate and beat his chest. But here a problem arises. Trump and Bessent clearly do not understand that the US cannot dictate its will to the rest of the world in the same way as before. Nor does Trump understand either the changing nature of modern warfare or the evolution of the US’s role in the global economy.
America without trump cards
Permanently stuck in the past, he is incapable of realising that, since the end of the Second World War, America’s share of global GDP (at purchasing power parity) has halved: from around 30 per cent to just under 15 per cent by 2025.
More importantly, the US has lost control over key strategic chokepoints in the global economy. The advanced chips required for most cutting-edge technologies are produced by Taiwan, whilst China dominates the production and processing of magnets and rare-earth elements.
In these instances, even Trump realises that America no longer holds all the trump cards. Trump wishes to cut off the Islamic Republic’s oil revenues by targeting its buyers; yet 90 per cent of Iran’s oil exports are purchased by China, which holds the trump cards when it comes to rare-earth metals.
The response to Trump’s aggression reflects all these unfavourable economic realities. Seeing that, under Trump’s leadership, America’s power is rapidly waning, Canadian Prime Minister Mark Carney has decided that ‘enough is enough’. He refuses to capitulate and surrender his country’s economic sovereignty to America’s mad king – a man incapable of gaining the upper hand even over Iran.
The rest of the world appears to be drawing the same conclusions. No one should tolerate such intimidation. No one should capitulate or remain dependent on the US. The rapidly changing global economic landscape opens up a wealth of new opportunities for diversification. The sooner Bessent and Trump realise just how weak their hand is, the better it will be for the US and for the whole world.
If China and other countries begin to resist Trump’s new demands (which is quite likely), they will not collapse nor suffer the losses that the US hopes to inflict upon them. The global economic war declared by Bessent will end in a stalemate, much like the situation in the Strait of Hormuz. The US will once again pay dearly for all this, whilst its attempts to shift the costs onto other countries will further undermine its reputation and soft power.
America was once a role model. It championed democracy, new economic prospects and other values that attracted many countries.
Now, however, it sets an example of what not to do. It is a cautionary tale of extreme inequality, the erosion of democracy, corruption and social division. The rest of the world must reassess the importance of cooperation and the rule of law – at both national and international levels.
A world that has moved away from US leadership (at least for the time being) promises greater stability, security and prosperity for all.
Joseph Stiglitz, Nobel
Laureate in Economics, former Chief Economist at the World Bank and Chair of the US President’s Council of Economic Advisers, is now a professor at Columbia University and author of *The Road to Freedom: Economics and the Good Society* (W. W. Norton & Company, Allen Lane, 2024).
©: Project Syndicate, 2026.
www.project-syndicate.org
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