CFR President Michael Froman on How Trump Is Rewriting the World Order

Why It Matters

The reorientation of U.S. strategy reshapes global trade, security alliances, and the role of American businesses, influencing market stability and geopolitical risk. Stakeholders must adapt to a fragmented rule set and diminished diplomatic tools.

Key Takeaways

• Trump’s first year reshaped global order beyond past 80 years
• “Coalitions of the willing” replace traditional multilateral institutions
• Private sector leveraged in Venezuela, Gaza, critical minerals deals
• US soft‑power tools cut, trust erosion threatens influence
• Alliance cohesion tested by Hormuz reopening and Europe tensions

Pulse Analysis

The Trump administration’s foreign‑policy overhaul marks a departure from the post‑Cold War consensus that underpinned decades of stable international commerce. By privileging ad‑hoc “coalitions of the willing” over institutions such as the United Nations and the World Trade Organization, Washington is encouraging a more fragmented rule‑making environment. This shift creates both opportunities and uncertainties for multinational corporations that must navigate divergent standards, especially in sectors like defense, energy, and technology where strategic autonomy is increasingly prized.

Business now sits at the center of diplomatic maneuvering, with the administration courting private capital to advance geopolitical goals. Initiatives ranging from oil investments in Venezuela to reconstruction financing in Gaza illustrate a model where corporate profit motives align with national security objectives. For investors, the emphasis on critical minerals and supply‑chain resilience signals heightened demand for assets tied to rare‑earth mining and domestic manufacturing, while trade agreements with Japan, Korea, the EU, and the UK embed investment clauses that could reshape capital flows toward the United States.

However, the erosion of traditional soft‑power tools—cuts to USAID, Voice of America, and research funding—has strained the United States’ ability to build trust abroad. Recent diplomatic flashpoints, such as the effort to reopen the Strait of Hormuz and lingering tensions with European allies over Greenland, underscore the fragility of alliance cohesion. Policymakers and business leaders alike must therefore invest in new forms of influence, from technology‑driven public diplomacy to strategic partnerships that compensate for reduced governmental outreach, to preserve U.S. leadership in an increasingly transactional global order.