The Diplomatic Tightrope: Global Alliances Under Pressure
Unilateralism vs. Multilateralism
Donald Trump’s second term departs from traditional diplomacy, reaffirming his commitment to unilateral action over multilateral cooperation. His first presidency demonstrated a deep scepticism towards international alliances, favouring bilateral deals where the United States could leverage its economic and military power to extract favourable terms. While effective in securing short-term strategic gains, this approach risks alienating allies, weakening international institutions, and diminishing U.S. influence in global governance.
The post-World War II international order has been shaped by multilateral institutions such as the United Nations, NATO, the World Trade Organization, and the G7. These frameworks were established to promote stability, economic collaboration, and security among nations. Trump’s rejection of multilateralism in favour of a transactional, deal-by-deal strategy has raised concerns about the long-term sustainability of these alliances and the potential for geopolitical instability.
The Erosion of Global Cooperation
One of the hallmarks of Trump’s foreign policy is his belief that international agreements and institutions constrain U.S. sovereignty. His first term saw the withdrawal from the Paris Climate Agreement, the Trans-Pacific Partnership, and the Iran nuclear deal, each designed to foster global cooperation on critical issues. A second Trump presidency is expected to erode multilateral structures further, as the administration prioritises American interests above collective international action.
- Weakened Influence in International Institutions
- Trump’s antagonistic approach towards the United Nations and the World Trade Organization has undermined U.S. leadership in global decision-making.
- A continued withdrawal from international forums may allow geopolitical rivals such as China and Russia to expand their influence in shaping global policies.
- Diminishing Trust Among Allies
- NATO partners and traditional U.S. allies in Europe and the Asia-Pacific have expressed concerns over Trump’s commitment to collective security.
- The possibility of reducing U.S. contributions to NATO or pulling back military support from long-standing alliances could embolden adversaries and destabilise regions dependent on American security guarantees.
- Bilateralism Over Collective Action
- Trump’s preference for bilateral trade and security agreements forces allies into one-on-one negotiations, where the U.S. can exert disproportionate influence.
- This approach discourages cooperative problem-solving on global issues such as climate change, international security, and economic recovery, leading to a fragmented international landscape.
Strategic Implications for Global Power Balance
The shift from multilateralism to unilateralism has significant consequences for global power dynamics. As the U.S. reduces its engagement in international institutions, emerging powers seek to fill the void. China, in particular, has actively expanded its role in global governance, investing in multilateral trade agreements and infrastructure projects through initiatives such as the Belt and Road Initiative.
Russia, too, has capitalised on Western divisions, leveraging its influence in energy markets and military engagements to challenge NATO’s cohesion. If Trump’s policies continue to weaken transatlantic and Pacific alliances, these nations will be well-positioned to assert greater control over global security and economic frameworks.
For businesses, investors, and policymakers, the retreat from multilateral cooperation introduces new risks. Trade policies may become more unpredictable, cross-border investments more volatile, and international regulations less standardised. The shift to a more fragmented world order demands adaptability, as businesses and governments must navigate an environment where economic and security relationships are increasingly dictated by national self-interest rather than collective agreement.
The future of global diplomacy will depend on whether other nations step in to reinforce multilateral institutions or whether economic and political alliances realign in response to shifting U.S. policies. As Trump continues to prioritise unilateral decision-making, the stability of global alliances hangs in the balance, with profound implications for economic cooperation, security arrangements, and diplomatic relations in the years ahead.
The Middle East and Rising Conflict Risks
Donald Trump’s second presidency is poised to disrupt the fragile geopolitical landscape of the Middle East. His previous administration took a markedly interventionist stance in the region, favouring aggressive unilateral action over diplomatic consensus. His policies, particularly his close alignment with Israel, withdrawal from the Iran nuclear deal, and economic pressure on adversaries, escalated tensions that continue to shape regional instability. As Trump re-enters the global stage, concerns over renewed conflict, shifting alliances, and economic repercussions for international markets are intensifying.
Historically, U.S. policy in the Middle East has been defined by strategic partnerships, energy security, and military interventions designed to maintain a balance of power. Trump’s preference for transactional diplomacy, where alliances are maintained based on immediate benefits rather than long-term stability, has weakened traditional U.S. influence in the region. His approach to governance suggests that this pattern will continue, with potential ramifications for global oil markets, security alliances, and the economic stability of nations reliant on Middle Eastern trade.
U.S.-Israel Relations and the Palestinian Question
One of Trump’s most defining Middle East policies has been his unwavering support for Israel. His first term saw the relocation of the U.S. embassy from Tel Aviv to Jerusalem. The international community widely condemned this move for undermining efforts towards a two-state solution. His administration also brokered the Abraham Accords, normalising relations between Israel and several Arab states but failing to address the core issues of the Israeli-Palestinian conflict.
During his second term, Trump is expected to further entrench U.S. support for Israeli security policies, likely at the expense of Palestinian autonomy. Recent statements suggesting the potential for forced displacement in Gaza have drawn international condemnation, raising concerns over human rights violations and regional backlash. If Trump pursues a policy of enabling Israeli territorial expansion or limiting Palestinian sovereignty, tensions with Arab states could escalate, reversing the diplomatic progress made in recent years.
Escalating Tensions with Iran and the Risk of Conflict
Trump’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA), known as the Iran nuclear deal, marked a turning point in U.S.-Iran relations. His administration reimposed crippling sanctions on Tehran, significantly damaging Iran’s economy but failing to curb its nuclear ambitions. Under his second presidency, the likelihood of re-engaging in diplomatic talks with Iran is minimal. Instead, Trump is expected to double down on economic pressure and potential military deterrence.
Iran has expanded its influence across the Middle East through its support for proxy groups in Iraq, Syria, Lebanon, and Yemen. If Trump takes an aggressive stance against Iran, including economic isolation and potential military action, the risk of confrontation increases. This could lead to broader regional instability, drawing in Gulf states, Israel, and international actors with vested interests in Middle Eastern security.
The Strait of Hormuz, a critical chokepoint for global oil shipments, remains a flashpoint for potential conflict. Any escalation between the U.S. and Iran could disrupt global energy supply, leading to price spikes that would impact economies worldwide. Given Australia’s reliance on energy imports and international trade stability, the economic fallout of heightened Middle East tensions would be significant.
The Role of Saudi Arabia and the Gulf States
Trump’s first term saw a close relationship with Saudi Arabia despite international criticism over human rights abuses and the assassination of journalist Jamal Khashoggi. His administration prioritised arms deals and economic cooperation over human rights concerns, solidifying a transactional alliance with Riyadh.
Saudi Arabia and other Gulf Cooperation Council (GCC) nations remain key U.S. allies in countering Iranian influence and ensuring regional stability. However, its leadership has increasingly sought to diversify its diplomatic and economic ties, engaging more actively with China and Russia. If Trump adopts a confrontational approach towards Iran without securing GCC backing, the U.S. could find itself diplomatically isolated in the region.
Additionally, Saudi Arabia’s role in global oil production means its economic strategies will have ripple effects on international markets. If Trump pressures the kingdom to maintain lower oil prices to benefit U.S. consumers, it could strain U.S.-Saudi relations, pushing Riyadh towards closer economic cooperation with Beijing and Moscow.
Geopolitical Consequences and the Risk of Wider Conflict
The Middle East has long been a theatre for great power competition, and Trump’s second term may accelerate this dynamic. With the U.S. retreating from multilateral diplomacy, China and Russia have expanded their regional influence, securing trade and military agreements with key players. If Trump further disengages from cooperative security arrangements, these nations will continue to fill the void, reshaping the balance of power.
The risk of broader conflict remains high. Potential flashpoints include:
- Increased Israeli-Palestinian confrontations, mainly if Trump backs Israeli expansionism.
- Proxy wars between Iran-backed groups and U.S.-aligned forces in Iraq, Syria, and Yemen.
- Direct military confrontations in the Persian Gulf, potentially disrupting global energy markets.
A Precarious Future for Middle East Stability
Trump’s return to the presidency brings renewed uncertainty to the Middle East. His preference for unilateral action, economic coercion, and military deterrence over sustained diplomatic engagement heightens the risk of regional instability. The potential for renewed conflict with Iran, shifting alliances among Gulf states, and heightened tensions in Israel and Palestine all contribute to an increasingly volatile environment.
For global markets, disruptions in the Middle East will have far-reaching consequences, particularly in energy security and trade stability. Nations with economic exposure to Middle Eastern volatility, including Australia, must prepare for the possibility of rising fuel costs, supply chain disruptions, and increased geopolitical uncertainty. The coming years will test the resilience of international alliances, with long-term consequences for economic and security frameworks worldwide.
Eric Allgood
Eric Allgood is the Managing Director of SBAAS and brings over two decades of experience in corporate guidance, with a focus on governance and risk, crisis management, industrial relations, and sustainability.
He founded SBAAS in 2019 to extend his corporate strategies to small businesses, quickly becoming a vital support. His background in IR, governance and risk management, combined with his crisis management skills, has enabled businesses to navigate challenges effectively.
Eric’s commitment to sustainability shapes his approach to fostering inclusive and ethical practices within organisations. His strategic acumen and dedication to sustainable growth have positioned SBAAS as a leader in supporting small businesses through integrity and resilience.
Qualifications:
- Master of Business Law
- MBA (USA)
- Graduate Certificate of Business Administration
- Graduate Certificate of Training and Development
- Diploma of Psychology (University of Warwickshire)
- Bachelor of Applied Management
Memberships:
- Small Business Association of Australia –
International Think Tank Member and Sponsor - Australian Institute of Company Directors – MAICD
- Institute of Community Directors Australia – ICDA
- Australian Human Resource Institute – CAHRI
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