From NATO to Taiwan: Key Factors Shaping U.S. Hegemony and Global Alliances

Hi, I'm Dong Xiong. Welcome to Digging 2 China, where we explore China in depth to reveal unique perspectives. Punching Canada, kicking Europe, trying to buy Greenland, inviting Russia back into the G8, negotiating with Russia alone, and backstabbing Ukraine. Trump's recent moves have left many people dizzy. Criticism of him is everywhere. Some believe that under Trump, America's beacon of democracy is about to collapse. Others think he's been bought by Putin and is abandoning Ukraine. Some worry about Taiwan's future, asking, if the US won't even support Ukraine, how will it support Taiwan? But many also support Trump, believing he's playing a long game. They argue that everything he's doing is about forming an alliance with Russia to counter China because the Chinese Trump, they say, is just focusing America's strength. At the same time, because Trump is such an extreme figure, his supporters and opponents have also become extreme. The Internet is full of people attacking each other, and it seems like no one is analyzing his actions objectively. So how should we view Trump's latest moves? Does this mean Taiwan is in danger? Let's break it down. First, to understand whether Trump will abandon Taiwan, we need to understand the logic behind his decisions. From what I see, his actions are about shifting America's role in the world. For years, the Chinese Communist Party has pushed certain narratives, terms like American hedge money, the US is the world's biggest policeman, and dollar dominance. Are these ideas completely made up? I don't think so. But I also don't see them as bad things. We should be grateful to live in an era of American hedge money, not reject it. Why? Let's take a closer look at the system of American dominance. This system is built around the US maintaining global order, promoting democracy and supporting free trade. It encourages solving problems through diplomacy rather than force. The foundation of this system includes democratic values, economic cooperation, and international institutions, with the US acting as its guardian. For most people, this has been a good thing, because war isn't the focus. Global conflicts have decreased dramatically. Yes, we see wars in Ukraine, Gaza, and Afghanistan. But overall, war-related deaths have been declining. Trade liberalization also helped the world's economy grow. China is one of the biggest beneficiaries. Its rise was made possible by joining the World Trade Organization and becoming part of the global trade system. Every Chinese citizen has felt the impact. Meanwhile, democracy has spread further because the US champions democratic values. The number of democratic nations has steadily increased. Of course, this system isn't perfect. But compared to other forms of global dominance, it's the best we've had. Just imagine if the Cold War had ended with the Soviet Union winning instead of the US. The world would have been shaped by the Soviet system, planned economies, authoritarian rule, and total state control. Look at the difference between North and South Korea. Nobody wants to live in North Korea. So overall, the US-led world order has been the best in history. But what has Trump done? He is tearing down this system. As I said, the US hedge money rests on three pillars, democratic values, free trade, and international cooperation, all upheld by American leadership. Abandoning Ukraine and criticizing Europe for not contributing more means the US is stepping away from its role as a global stabilizer. Leaving the World Health Organization and other international bodies means Trump is turning away from international cooperation. Partnering with Putin means he is no longer making democracy promotion a US priority. Imposing tariffs on Canada, Mexico, and even allies worldwide means he no longer believes in free trade. Under Trump, the old US world order collapsed almost overnight. So why would Trump dismantle America's global dominance? Because this shift didn't start with him. It's been building for years. Within the US, dissatisfaction with the old world order has been growing. For years, there has been a debate over who really benefits from American global dominance. Chinese state media has long portrayed the US as an empire exploiting the world. But many Americans don't see it that way. They don't feel like they've benefited. As globalization's advantages fade, internal tensions in the US have intensified. More Americans now believe they are the ones suffering under the current system. A Pew Research poll from July 2024 found that only 37% of Americans believe expanding trade benefits the country, while 59% oppose further trade expansion. Among the Republicans, the number is even starker. Only 25% think trade is beneficial, while 73% think it does more harm. This may come as a shock. Wasn't it Xi Jinping who wanted to focus on China's internal economy? Yet now, it's Americans, living at the heart of global trade, who are rejecting it. But this reaction makes sense. Globalization kept high-value jobs like design, R&D, and innovation in the US while moving manufacturing to cheaper labor markets like China. Not everyone in the US can be an engineer or entrepreneur. Many people relied on manufacturing jobs. And as those disappeared, their quality of life declined. Polls show that the lower-income and less-educated Americans are the strongest opponents of trade expansion. Trump's policies reflect this shift. He isn't acting randomly. He is responding to deep-seated frustrations within American society. Most Americans, especially Trump supporters, see themselves as victims of the current global trade system. In the past, the US government tried to address this issue through redistribution, essentially the left's approach of taxing the rich to subsidize the poor. But this hasn't satisfied working-class Americans, a point also made by Vice President J.D. Vance in his book, Hail Billie Elegant. Vance subtly argues that what working-class Americans want isn't welfare or handouts. Welfare only makes them dependent and keeps them at the bottom. What they truly need are opportunities and jobs. Trump's solution to this problem is trade barriers, bringing manufacturing back to the US and reducing the trade deficit. But in their view, America isn't just a victim of global trade, it also spends too much to maintain the system. A key example is military spending. So let's talk about that first. Right now, the US has military bases in over 80 countries. In China's propaganda, this is portrayed as US colonialism. They claim that any country hosting American troops has lost its sovereignty. And there are even false stories about US soldiers committing crimes in places like South Korea. However, Americans see things differently. They believe these countries are actually taking advantage of the US and getting a free ride. And they have a point. If you look at the numbers, America is paying the bulk of these costs. For example, according to the Targets Per Gal, Germany hosts about 35,000 US troops. How much does Germany contribute to their presence? Just 1 billion euros over 10 years, which comes out to only 100 million euros per year. That's an extremely low cost. When dividing among 35,000 soldiers, it's about 2,857 euros per soldier per year. That's less than a month's salary for an American soldier. It might not even be enough to cover the salary of a Chinese PLA soldier for a full year. And that's just the wages. There are many other expenses involved in maintaining these bases. So who covers the rest of the costs? The United States. Another major complaint among Americans is NATO military spending. NATO requires member countries to spend at least 2% of their GDP on defense. But out of the 32 NATO members, only about half meet this requirement. In fact, the only NATO country that spends more on its military than the US is Poland. And even getting half of NATO to meet the 2% goal is largely thanks to Putin. Many European nations only started increasing their defense budgets after Russia invaded Ukraine. The same frustration applies to the war in Ukraine. Many Americans feel that the US is footing the bill to protect Europe. Now, just because I'm explaining their perspective doesn't mean I think they are entirely right. Some of these views lack basic economic understanding. For example, Trump wants to maintain the US dollar's dominance while also eliminating the trade deficit. But economically, that's impossible. There is a concept in monetary theory called the thrift-in dilemma introduced by economist Robert Thriffin in 1960. He pointed out that when a country's currency becomes the world's reserve currency, other nations will naturally want to accumulate it. But to save money, you first need to earn it. And for other countries to earn US dollars, they need to run trade surplus with the US, which means the US must run trade deficits. So a country that issues the world's reserve currency will inevitably have a trade deficit. You can't have both dollar hedge money and a balanced trade account at the same time. The same logic applies to Europe's military spending. Yes, Europe contributes relatively little to NATO, and many countries don't meet the spending targets. But Europe also provides soft support for US global dominance and aligns with the US on many major issues. This kind of support isn't something you can measure in dollars. As for the idea of moving manufacturing from China to the US, that's also unrealistic. China has an abundant and cheap labor force, and its workers are known for their endurance and willingness to work hard. American workers simply can't compete with that. But who's right and who's wrong, that's not something we can settle today, and it's not a question that can be answered in just a few words. What's clear is that many Americans no longer see themselves as beneficiaries of the global system. Free trade, in their view, no longer brings them benefits, only harm. What's worse, they feel like they have to spend huge amounts of money every year to keep the system running. Trump tapped into this frustration and used it to win the presidency. This creates an awkward situation. America is now in the process of dismantling the very world order it spent decades building and maintaining. So what happens next? Some people fear that once the US steps back, global order will collapse, and the world will spiral into chaos. After all, history shows that a world without a stable order can be a dangerous place. Over the past century, there have been three major global orders. After World War I, there was the Messiah Washington system. After World War II, we had the Yalta system. Or the Cold War era of the US-Soviet Revival. And after the Soviet Union collapsed, we moved into the unipolar system, with the US as the sole superpower. We can see that when the world order collapsed, chaos follows. The last time there was a power vacuum, it led to the most devastating and chaotic years in human history, World War II. Now with Trump's changes, will the world order disappear again? No, it won't. The key difference this time is that past shifts in world order happened because the system's main enforcers were weakened or destroyed. Take the Messiah Washington system. For example, it collapsed because it was unfavorable to Germany, and Germany fought back. Britain, France, and the US either chose appeasement or were too weakened by Nazi Germany to stop it. As a result, the system fell apart. The Cold War order collapsed because the Soviet Union fell apart. When one of the main enforcers of an order collapses, the order collapses with it. But today's changes don't fit this pattern. No one is challenging the US directly, and America hasn't declined or collapsed. The shift is happening simply because the US itself is dissatisfied with the current system. America still has the power to maintain world order, it just doesn't want to do it the same way anymore. The US is both enforcer of the current system and the creator of the next one. But under Trump, what kind of new world order does America want? Before he took office, Trump's speeches made it seem like he wanted an isolationist policy, pulling the US out of the global system. But after taking office, his actions have been very different. Instead of isolationism, Trump has been shifting from obligatory hegemony to pay-to-play hegemony. In other words, the US will still maintain world order, but it will no longer act as the world's moral policeman. It won't go around promoting democracy instead. It will act as a security provider that expects payment in return. The US will continue to exert global influence and remain the dominant power. But other countries will have to pay more for that protection. The old system based on democratic values, free trade, and international cooperation was maintained by the US. But the new system will be maintained by the US based on its own interests and hegemonic position. With this understanding, we can analyze whether Trump's changes mean he will sell out Taiwan. Theoretically, if Trump is purely driven by profit, Taiwan's financial contributions are much smaller than what China could offer. Taiwan is small, and China as a dictatorship can easily sacrifice its own people's interest to strike a deal. If Trump was willing to abandon Ukraine, he could do the same to Taiwan. But I don't think this situation is the same. Equating Taiwan with Ukraine oversimplifies the issue. Trump will not abandon Taiwan because Taiwan is crucial to the new world order he wants to create. Trump's vision for America's interests and global dominance is deeply tied to Taiwan. Why is Trump less hostile toward Russia? Because the main conflict between the US and Russia is ideological. But Trump's new world order isn't about ideology. Once ideology is set aside, the US and Russia don't have direct economic conflicts, like trade disputes. Also, Russia is too weak to challenge US dominance. That's why Trump doesn't need to support Ukraine to maintain US hegemony. This is why I believe Trump would easily abandon Ukraine. But China and Taiwan are a different story. The US and China have deep, fundamental conflicts of interest. To Trump, the core of American interests is fair trade. He sees America's massive trade deficit and the loss of manufacturing jobs as China's doing. Since Trump prioritizes business principles over ideology, in theory, he could negotiate with China. If Xi Jinping could offer the right deal, Trump might consider giving up Taiwan. But the problem is, Xi can't afford to meet Trump's demands. China's economy depends on cheap labor and exports. If China were to meet Trump's demands, such as giving up its economic advantages, it could collapse before the military even moves on Taiwan. A failing economy could lead to massive starvation and uprisings. So even though Trump is a businessman who doesn't care about ideological battles, US-China tensions won't end under him. Their conflict is rooted in economic structures, and that's not something Trump can negotiate away. If Trump wants to confront China, Taiwan is essential. Taiwan isn't like Ukraine. It has clear strategic value. It's a critical piece in America's global dominance. Taiwan is at the heart of the first island chain in the Pacific. Controlling Taiwan helps the US maintain influence over Japan, South Korea, the Philippines, and other allies as well. It's a core part of America's power in the Pacific, and that's something the US cannot afford to give up. So Trump won't abandon Taiwan for two reasons. First, Xi Jinping can't afford the price of buying Taiwan. Second, Taiwan is too strategically important for US dominance. It's not because Trump cares about democracy. Under Biden, the US protected Taiwan for ideological reasons, defending democracy. But under Trump, Taiwan's value lies in its strategic importance in America's fight against China. Recently, Taiwan's President Lai Ching-de said Taiwan is a knight and not a pawn. But in Trump's world order where the strong dominate the weak, it's hard to avoid becoming a pawn. Even though I believe Trump won't sell out Taiwan, there is a big difference. The US won't protect Taiwan for ideological reasons anymore. It will do so purely for strategic and economic interests. That means Taiwan will have to pay a higher price for its own security. It will need to increase military spending, buy more weapons, and show a stronger commitment to resisting China. Taiwan will have to prove its value to Trump. The days of being protected by the US simply for sharing democratic values are over. In the future, protection will come at a cost.