A Fight Over Taiwan Could Go Nuclear
War-Gaming Reveals How a U.S.-Chinese Conflict Might Escalate
President Donald Trump came into office promising to overhaul U.S. foreign policy. Since then, he has scorned allies, withdrawn the United States from international agreements, and slapped tariffs on friends and foes alike. Many experts bemoan the damage Trump’s “America first” policy has done to the so-called liberal international order—the set of institutions and norms that have governed world politics since the end of World War II. They hope that once Trump has left the Oval Office, the United States will resume its role as leader of a liberalizing world.
Don’t count on it. The era of liberal U.S. hegemony is an artifact of the Cold War’s immediate afterglow. Trump’s transactional approach to foreign policy, by contrast, has been the norm for most of U.S. history. As a result, Trump’s imprint could endure long after Trump himself is gone.
Trump’s approach already appeals to many Americans today. That appeal will grow even stronger in the years ahead as two global trends—rapid population aging and the rise of automation—accelerate, remaking international power dynamics in ways that favor the United States. By 2040, the United States will be the only country with a large, growing market and the fiscal capacity to sustain a global military presence. Meanwhile, new technologies will reduce U.S. dependence on foreign labor and resources and will equip the U.S. military with new tools to contain the territorial expansion of the country’s great-power rivals. As long as the United States does not squander those advantages, it will remain the world’s dominant economic and military power.
Remaining the most powerful country, however, is not the same thing as remaining the guarantor of a liberal international order. Somewhat paradoxically, the same trends that will reinforce U.S. economic and military might will also make it harder to play that role—and make Trump’s approach more attractive. Since the end of World War II, the United States has seen itself as the chief defender of a democratic capitalist way of life and the champion of a rules-based international system built on liberal values. Washington has provided dozens of countries with military protection, secure shipping routes, and easy access to U.S. dollars and markets. In exchange, those countries have offered their loyalty and, in many cases, have liberalized their own economies and governments.
In the coming decades, however, rapid population aging and the rise of automation will dampen faith in democratic capitalism and fracture the so-called free world at its core. The burdens of caring for older populations and the job losses resulting from new technologies will spur competition for resources and markets. Aging and automation will also lay bare the flaws of the international institutions that governments rely on to tackle common problems, and Americans will feel less dependent on foreign partners than they have in generations. In response, the United States might become a rogue superpower. Like the twentieth century, the twenty-first century will be dominated by the United States. But whereas the previous “American century” was built on a liberal vision of the U.S. role in the world, what we might be witnessing today is the dawn of an illiberal American century.
Trump’s “America first” approach to foreign policy has deep roots in U.S. history. Before 1945, the United States defined its interests narrowly, mostly in terms of money and physical security, and pursued them aggressively, with little regard for the effects on the rest of the world. It espoused liberal values such as freedom and liberty but applied them selectively, both at home and abroad. It formed no alliances besides the one it signed with France during the Revolutionary War. Its tariffs ranked among the highest in the world. It shunned international institutions. The United States was not isolationist; in fact, its rampant territorial expansion inspired the envy of Adolf Hitler. But it was often aloof.
The United States could afford to pursue its goals alone because it, unlike other powerful countries, was self-sufficient. By the 1880s, the United States was the world’s richest country, largest consumer market, and leading manufacturer and energy producer, with vast natural resources and no major threats. With so much going for it at home, the United States had little interest in forging alliances abroad.
That changed during the Cold War, when the Soviet military occupied large swaths of Eurasia and communism attracted hundreds of millions of followers worldwide. By the early 1950s, Moscow had twice the military might of continental Western Europe, and communists ruled over 35 percent of the world’s industrial resources. The United States needed strong partners to contain these threats, so it bankrolled an alliance, providing dozens of countries with security guarantees and easy access to American markets.
Rapid automation will intensify the economic turmoil.
But when the Cold War ended, Americans increasingly did not see the point of U.S. global leadership and became ever more wary of overseas entanglements. In the decades that followed, U.S. presidents often took office having pledged to do less abroad and more at home. Despite such promises, the post–Cold War era saw Washington launch numerous military interventions (in the Balkans, Afghanistan, Iraq, Libya) and witnessed the further expansion of the U.S.-led liberal order, as China joined the World Trade Organization, the European Union solidified, NATO expanded, and the global economy relied ever more on U.S. institutions.
That trend is one reason why many American elites, who mostly welcomed the spread of U.S. liberal hegemony, were shocked by Trump’s election on an “America first” platform. It would be comforting to blame the country’s current nationalist posture on Trump alone, but Americans’ support for the postwar liberal order has been shaky for decades. Surveys now show that more than 60 percent of Americans want the United States simply to look after itself. When pollsters ask Americans what ought to be the priorities of U.S. foreign policy, few cite promoting democracy, trade, and human rights—the core activities of liberal international leadership. Instead, they point to preventing terrorist attacks, protecting U.S. jobs, and reducing illegal immigration. Roughly half of those surveyed say they oppose sending U.S. troops to defend allies under attack, and nearly 80 percent favor the use of tariffs to prevent job losses from trade. Trump’s approach is no aberration; it taps into a current that has always run through American political culture.
In the years ahead, Americans’ support for the liberal order may decline further still thanks to demographic and technological changes that will increase the United States’ economic and military lead and make the country less dependent on others. First, most countries’ populations are growing older, many at extremely fast rates. By 2070, the median age of the world’s population will have doubled compared with 100 years earlier, from 20 years old to 40 years old, and the share of people aged 65 and older in the global population will have nearly quadrupled, from five percent to 19 percent. For millennia, young people have vastly outnumbered the elderly. But in 2018, for the first time ever, there were more people over the age of 64 than under six.
The United States will soon be the only country with a large, growing market. Among the world’s 20 largest economies, only Australia, Canada, and the United States will have growing populations of adults aged 20 to 49 throughout the next 50 years. The other large economies will suffer, on average, a 16 percent decline in that critical age group, with most of the demographic decline concentrated among the world’s most powerful economic players. China, for example, will lose 225 million young workers and consumers aged 20 to 49, a whopping 36 percent of its current total. Japan’s population of 20- to 49-year-olds will shrink by 42 percent, Russia’s by 23 percent, and Germany’s by 17 percent. India’s will grow until 2040 and then decline rapidly. Meanwhile, the United States’ will expand by ten percent. The American market is already as large as that of the next five countries combined, and the United States depends less on foreign trade and investment than almost any other country. As other major economies shrivel, the United States will become even more central to global growth and even less reliant on international commerce.
The United States will also have less need for staunch allies, because rapid aging will hobble the military expansion of its great-power adversaries. By 2050, Russia’s spending on pensions and medical care for the elderly will increase by nearly 50 percent as a share of its GDP, and China’s will nearly triple, whereas in the United States, such spending will increase by only 35 percent. Russia and China will soon face severe choices between buying guns for their militaries and buying canes for their ballooning elderly populations, and history suggests they will prioritize the latter to prevent domestic unrest. Even if Russia and China do not cut their military spending, they will struggle to modernize their militaries because of the rapid aging of their troops. Personnel costs already consume 46 percent of Russia’s military budget (compared with 25 percent of the U.S. military budget) and likely will exceed 50 percent this decade as a wave of older troops retire and draw pensions. China’s personnel costs are officially listed at 31 percent of its military budget, but independent estimates suggest they consume nearly half of China’s defense spending and will rise in the years ahead.
Rapid aging around the world will accelerate the United States’ economic and military lead over its great‑power rivals and will take place alongside a similarly advantageous trend: the growth of automation. Machines are becoming exponentially faster, smaller, and cheaper. Even more important, they are developing the ability to adapt to new information—a process sometimes called “machine learning,” a type of artificial intelligence. As a result, new machines combine the number-crunching capabilities of computers, the brute strength of industrial machinery, and some of the intuition, situational awareness, and dexterity that were previously the preserve of humans. Thanks to these innovations, nearly half of the jobs in today’s economy could be automated by the 2030s.
Like global aging, the widespread adoption of smart machines will reduce the United States’ economic dependence on other countries. The United States already enjoys a substantial lead in the industries driving the automation trend. For instance, it has nearly five times as many artificial intelligence companies and experts as China, the second-place country, and its shares of the world’s artificial intelligence software and hardware markets are several times as large as China’s. U.S. firms can leverage this technological lead by using advanced automation to replace sprawling global supply chains with vertically integrated factories in the United States. Service industries will follow suit as artificial intelligence takes over more tasks. Call centers, for example, are already moving from foreign countries to the United States. For decades, the United States has chased cheap labor and resources abroad. Now those days look to be numbered, as automation allows the United States to rely more on itself.
The rise of smart machines will also help Washington contain the military rise of its rivals. Instead of waiting for crises to break out, the United States will be able to preposition armed drones and missile launchers in potential conflict zones. These drones and missiles will act as high-tech minefields, capable of annihilating enemy invasion forces. They are also difficult to eliminate and cheap to purchase. For the price of one aircraft carrier, for example, the United States could buy 6,500 XQ-58A stealth drones or 8,500 loitering cruise missiles. By deploying such weapons, the United States will be able to capitalize on a fundamental asymmetry in war aims: whereas U.S. rivals such as China and Russia need to seize and control territory (Taiwan, the Baltics) to achieve their goal of regional hegemony, the United States needs only to deny them that control, a mission that networks of smart drones and missiles are well suited to perform.
Aging and automation will likely make the United States stronger—but they are unlikely to shore up the sagging U.S.-led liberal order. In liberal democracies across the world, public support for that order has long rested on rising incomes for the working class, which in turn were largely the result of growing populations and job-creating technologies. The postwar baby boom produced scores of young workers and consumers, and the assembly line provided them with stable jobs. But today, populations across the democratic world are aging and shrinking, and machines are eliminating jobs. The basic bargain—work hard, support the liberal system, and trust that a rising economic tide will lift all boats—has broken down. Nationalism and xenophobia are filling the void.
The outlook is more dire than many people realize. Over the next 30 years, the working-age populations of the United States’ democratic allies will shrink by 12 percent, on average, making sustained economic growth almost impossible. Meanwhile, the senior populations of these countries will expand by 57 percent, on average, and their average spending on pensions and health care will double as a share of GDP. These countries will not be able to borrow their way out of the resulting fiscal mess, because they already carried debts equal to 270 percent of GDP, on average, before the COVID-19 pandemic plunged their balance sheets further into the red. Instead, they will have to cut entitlements for the elderly, slash social spending for the young, raise taxes, or increase immigration—all of which would likely produce political backlashes.
Rapid aging around the world will accelerate the United States’ economic and military lead.
Rapid automation will intensify the economic turmoil. History has shown that technological revolutions create prosperity in the long run but force some workers into lower-wage jobs or unemployment in the short run—and the short run can last generations. For the first 70 years of the Industrial Revolution in Great Britain, from 1770 to 1840, average wages stagnated and living standards declined, even as output per worker grew by nearly 50 percent. The gains from mass mechanization during this time were captured by tycoons, whose profit rates doubled. Across the developed world today, machines are once again eliminating jobs faster than displaced workers can retrain for new ones, wages for low- and middle-skill workers are stagnating, and millions of people—especially men without college degrees—are dropping out of the workforce. Many economists expect these trends to persist for several decades as labor-replacing technologies currently in development—such as robotic cars, stores, warehouses, and kitchens—are widely adopted.
Sluggish growth, enormous debts, stagnant wages, chronic unemployment, and extreme inequality are bound to breed nationalism and extremism. In the 1930s, economic frustrations caused many people to reject democracy and international cooperation and to embrace fascism or communism. Today, ultranationalists are ascendant across the democratic world—and not just in fledgling democracies in eastern Europe. In Germany, for example, a right-wing nationalist party, Alternative for Germany, now holds the third-largest number of seats in the parliament, and cases of neo-Nazi infiltration in the military and the police have multiplied alarmingly. The United States’ task of leading the liberal world order will grow harder as nationalists gain power and raise tariffs, close borders, and abandon international institutions.
Faced with flailing allies and a divided and apathetic public, the United States might start acting less like the head of a grand coalition and more like a rogue superpower—an economic and military colossus lacking moral commitments, neither isolationist nor internationalist, but aggressive, heavily armed, and entirely out for itself. In fact, under Trump, it already seems to be headed in that direction. During Trump’s time in office, some U.S. security guarantees have started to look like protection rackets, with the president musing that allies should pay the costs of hosting U.S. troops plus a 50 percent premium. The Trump administration has taken to enforcing trade deals with unilateral tariffs rather than working through the World Trade Organization. Trump has largely abandoned the goal of democracy promotion and has downgraded diplomacy, gutting the State Department and handing ever more responsibility to the Pentagon. The U.S. military is changing, too. Increasingly, it is a force geared for punishment rather than protection. The Trump administration has downsized permanent U.S. deployments on allied territory, replacing them with roving expeditionary units that can steam overseas, smash targets, and then slink back over the horizon.
Many of Trump’s critics decry these changes as not just unwise but also somehow un-American. But Trump’s approach appeals to many Americans today and aligns with their preferences regarding the United States’ role in the world. If these conditions persist, the best-case scenario for American leadership may involve Washington adopting a more nationalist version of liberal internationalism. The United States could retain allies but make them pay more for protection. It could sign trade agreements, but only with countries that adopt U.S. regulatory standards; participate in international institutions but threaten to leave them when they act against U.S. interests; and promote democracy and human rights, but mainly to destabilize geopolitical rivals.
Alternatively, the United States might exit the global order business altogether. Instead of trying to reassure weaker nations by supporting international rules and institutions, the United States would deploy every tool in its coercive arsenal—tariffs, financial sanctions, visa restrictions, cyber-espionage, and drone strikes—to wring the best deal possible out of both allies and adversaries. There would be no enduring partnerships based on common values—just transactions. U.S. leaders would judge other countries not by their willingness to help solve global problems or whether they were democracies or autocracies but only by their ability to create American jobs or eliminate threats to the U.S. homeland. Most countries, according to these criteria, would be irrelevant.
The United States might start acting less like the head of a grand coalition and more like a rogue superpower.
American commerce could steadily shift to the Western Hemisphere and especially to North America, which already accounts for a third of U.S. trade and a third of global GDP. At a time when other regions face setbacks from aging populations and rising automation, North America is the only region with all the ingredients necessary for sustained economic growth: a huge and growing market of wealthy consumers, abundant raw materials, a mix of high-skill and low-cost labor, advanced technology, and peaceful international relations.
U.S. strategic alliances, meanwhile, might still exist on paper, but most would be dead letters. Washington might retain only two sets of regular partners. The first would include Australia, Canada, Japan, and the United Kingdom. These countries are strategically arrayed across the globe, and their militaries and intelligence agencies are already integrated with Washington’s. All but Japan boast growing working-age populations, unlike most other U.S. allies, and thus have the potential tax bases to contribute to U.S. missions. The second group would consist of places such as the Baltic states, the Gulf Arab monarchies, and Taiwan, which share borders with or sit in close proximity to U.S. adversaries. The United States would continue to arm these partners but would no longer plan to defend them. Instead, Washington would essentially use them as buffers to check Chinese, Iranian, and Russian expansion without direct U.S. intervention.
Outside of those partnerships, all of Washington’s alliances and relationships—including NATO and its connections with longtime allies such as South Korea—would be negotiable. The United States would no longer woo countries to participate in multilateral alliances. Instead, other countries would have to bargain on a bilateral basis for U.S. protection and market access. Countries with little to offer would have to find new partners or fend for themselves.
U.S. strategic alliances might still exist on paper, but most would be dead letters.
What would happen to the world if the United States fully embraced this kind of “America first” vision? Some analysts paint catastrophic pictures. Robert Kagan foresees a return to the despotism, protectionism, and strife of the 1930s, with China and Russia reprising the roles of imperial Japan and Nazi Germany. Peter Zeihan predicts a violent scramble for security and resources, in which Russia invades its neighbors and East Asia descends into naval warfare. These forecasts may be extreme, but they reflect an essential truth: the postwar order, although flawed and incomplete in many ways, has fostered the most peaceful and prosperous period in human history, and its absence would make the world a more dangerous place.
Thanks to the U.S.-led order, for decades, most countries have not had to fight for market access, guard their supply chains, or even seriously defend their borders. The U.S. Navy has kept international waterways open, the U.S. market has provided reliable consumer demand and capital for dozens of countries, and U.S. security guarantees have covered nearly 70 nations. Such assurances have benefited everyone: not just Washington’s allies and partners but also its adversaries. U.S. security guarantees had the effect of neutering Germany and Japan, the main regional rivals of Russia and China, respectively. In turn, Moscow and Beijing could focus on forging ties with the rest of the world rather than fighting their historical enemies. Without U.S. patronage and protection, countries would have to get back in the business of securing themselves and their economic lifelines.
Such a world would see the return of great-power mercantilism and new forms of imperialism. Powerful countries would once again try to reduce their economic insecurity by establishing exclusive economic zones, where their firms could enjoy cheap and secure access to raw materials and large captive consumer markets. Today, China is already starting to do this with its Belt and Road Initiative, a network of infrastructure projects around the world; its “Made in China 2025” policy, to stimulate domestic production and consumption; and its attempts to create a closed-off, parallel Internet. If the United States follows suit, other countries will have to attach themselves to an American or a Chinese bloc—or forge blocs of their own. France might seek to restore its grip on its former African colonies. Russia might accelerate its efforts to corral former Soviet states into a regional trade union. Germany increasingly would have to look beyond Europe’s shrinking populations to find buyers for its exports—and it would have to develop the military capacity to secure those new far-flung markets and supply lines, too.
Such a world would see the return of great-power mercantilism.
As great powers competed for economic spheres, global governance would erode. Geopolitical conflict would paralyze the UN, as was the case during the Cold War. NATO might dissolve as the United States cherry-picked partners. And the unraveling of the U.S. security blanket over Europe could mean the end of the European Union, too, which already suffers from deep divisions. The few arms control treaties that remain in force today might fall by the wayside as countries militarized to defend themselves. Efforts to combat transnational problems—such as climate change, financial crises, or pandemics—would mimic the world’s shambolic response to COVID-19, when countries hoarded supplies, the World Health Organization parroted Chinese misinformation, and the United States withdrew into itself.
The resulting disorder would jeopardize the very survival of some states. Since 1945, the number of countries in the world has tripled, from 46 to nearly 200. Most of these new states, however, are weak and lack energy, resources, food, domestic markets, advanced technology, military power, or defensible borders. According to research by the political scientist Arjun Chowdhury, two-thirds of all countries today cannot provide basic services to their people without international help. In short, most countries depend critically on the postwar order, which has offered historically unprecedented access to international aid, markets, shipping, and protection. Without such support, some countries would collapse or be conquered. Fragile, aid-dependent states such as Afghanistan, Haiti, and Liberia are only some of the most obvious high-risk cases. Less obvious ones are capable but trade-dependent countries such as Saudi Arabia, Singapore, and South Korea, whose economic systems would struggle to function in a world of closed markets and militarized sea-lanes.
None of these grim outcomes is inevitable. And in the long run, aging populations and automation could make the world more peaceful and prosperous than it has ever been. Ultimately, older societies tend to be less belligerent than younger ones, and technological revolutions usually boost productivity and free workers from drudgery.
But the path to an older and more automated future will be tumultuous. To keep the current liberal order together, the United States would need to take an unusually generous view of its interests. It would need to subordinate the pursuit of national wealth and power to a common aspiration for international order. It would also need to redistribute wealth domestically to maintain political support for liberal leadership abroad.
As the world enters a period of demographic and technological disruption, however, such a path will become increasingly hard to follow. As a result, there may be little hope that the United States will protect partners, patrol sea-lanes, or promote democracy and free trade while asking for little in exchange. A nationalist mood has taken hold in the United States, and for the foreseeable future, it will be the shape of things to come. It is not an anomaly produced by the Trump administration; rather, it is a deeply rooted trend that threatens the rebirth of an older approach to U.S. foreign policy—one that prevailed during the darkest decades of the past century.
A nationalist mood has taken hold in the United States.
The best hope for the liberal world order is that future U.S. administrations find ways to channel growing nationalist impulses in internationalist directions. The United States has occasionally undertaken liberal campaigns for selfish reasons. It opposed European colonialism in part to open markets for U.S. goods, for example, and it nurtured and protected a community of capitalist democracies to crush Soviet communism and establish its global dominance. These campaigns garnered public support because they linked liberal ideals to vital U.S. interests. A similar approach could work today.
Americans may not want to fight and die to defend their country’s far-flung allies, but they do want to prevent authoritarian powers, such as China and Russia, from becoming regional hegemons. The United States could therefore replace some of its most vulnerable bases on allied territories with diffuse networks of missile launchers and drones, thereby containing Chinese and Russian expansion while reducing the number of American lives on the line. Americans would also stand for protecting U.S. workers and businesses. Although the American public opposes trade deals that spur outsourcing, strong support exists for deals that create a level playing field for U.S. businesses. The United States could therefore use its enormous economic clout to compel trading partners to adopt American standards on labor, the environment, and intellectual property protection. Americans are unenthusiastic about promoting democracy overseas but willing to partner with allies to defend U.S. institutions from foreign meddling. Thus, the United States could forge a coalition of democracies to coordinate collective sanctions against foreign powers that interfere in democratic elections. Eventually, the coalition could become a liberal bloc that excludes countries that do not respect open commerce and freedom of expression and navigation.
Compared with leading a global liberal order, this more nationalist version of U.S. engagement may seem stingy and uninspiring. But it would be more realistic—and ultimately more effective at holding the free world together during a period of unprecedented demographic and technological change.
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