U.S. grand strategy since 1917 can be divided into four phases. From 1917 to 1941, the strategy was to defend U.S. territorial integrity and to shield it from international turmoil. Between 1945 and 1991, the strategy centered around protecting the capitalist economic system: the free market. Then, between the years 1991 and 2010, the strategy was simply radiating self-confidence as a hyperpower. The year 2008 introduced the intricate task of how to manage a declining power. 

The First Phase

The entry into World War I on the side of Britain and France was to stymie ambitions on the part of Mexico to annex parts of the United States. It was a genuine threat, one that had to be taken seriously, but Mexico could never be successful if it undertook that endeavor alone. Germany was the only nation that had the power and intention to support such a venture. In 1917, it attempted to lure Mexico into military action. Therefore, the war had to be declared on Germany, not to support Britain and France, but to defend U.S. territorial integrity.  

Germany’s defeat meant that this threat to the United States as a continental power had disappeared. Eliminating threats to the United States as a maritime power remained. The answer was the Washington conference 1921, which set a ratio of warship tonnage between the U.S.—Britain—Japan at 5-5-3. That gave the U.S. Navy a sufficiently strong hand to keep sea lanes open. 

This grand strategy served the United States well for twenty years. The economy was basically domestic, not really needing the outside world, dispensing with the need for international rules and agreements. The adoption in 1930 of protectionist tariffs—the Smoot-Hawley Tariff Act—demonstrated that. 

It would probably have been a viable policy for quite long, had not Nazi-Germany and Imperial Japan rocked the boat. 

Between 1939 and 1941, as was the case between 1914 and 1917, the United States tried to stay out of the war. Franklin D. Roosevelt was re-elected in 1940 after promising to U.S. citizens with kids that “your boys are not going to be sent into any foreign wars.”

If Japan had not attacked Pearl Harbor in December 1941 but satisfied itself by overrunning the French, British and Dutch colonies in Southeast Asia, then it is highly debatable whether Roosevelt could have got a declaration of war against Japan through Congress. The mood in the United States was against any intervention to defend the European empires in Asia. And it is normally forgotten or omitted that Nazi-Germany declared war on the United States, not the other way around.

The United States was involved in a war that it had to win. In 1945, it was the only country with a strong and functioning economy. Furthermore, the United States was no longer in the luxurious position that its economy was a domestic economy.  

The Second Phase

What turned the tables was the emergence of a systemic challenger in the form of the Soviet Union running a centrally planned economy combined with an authoritarian political system. 

The policy of containment embedded in George Kennan’s long telegram from 1946 is seen as the cornerstone of U.S. grand strategy response. But the response was far more complex. 

The Soviet Union didn’t plan any military aggression. The enormous losses in the war scared the leadership from any kind of adventurist policy. In 1946, the communist country withdrew from Iran and from the Danish island Bornholm, which held strategic significance in the Baltic; it backed down after triggering the Berlin crisis when the United States responded by an airlift (1948–1949) and didn’t really support North Korea in 1950. In 1948, President Josip Broz Tito of Yugoslavia split from the Soviet bloc. Stalin allegedly said, “I have only to move my little finger, and Tito is finished,” but the point is that he didn’t.

To make the prospect of joining the Soviet system unattractive, the United States implemented policies to support democracy and prop up the European economy. In this it was helped by uprisings in DDR (East Germany) 1953, Poland plus Hungary in 1956 and Czechoslovakia in 1968.  

On a tactical level, it offered financial support (The Marshall Plan in 1948 transferring more than $15 billion) on the condition that the Europeans embarked on dismantling trade barriers.  

On a global level, the trinity of the International Monetary Fund, the World Bank and the General Agreement on Tariffs and Trade, to be succeeded in 1995 by the World Trade Organization, was forged. This institutionalized economic globalization was the framework for projecting U.S. economic power around the globe.

Support to European powers holding on to their colonies was not forthcoming. A French request in 1954 for help in Indochina when the fortress Dien Bien Phu fell was rejected. When Britain and France in 1956 launched a military attack to take back the Suez Canal Zone, the United States sided with Egypt. In 1967, Indonesia’s new President Suharto established friendly relations with the United States. In the early 1970s, President Richard Nixon and Henry Kissinger managed to enter into some kind of understanding with China. It signaled to the developing countries that the United States was a potential friend and pulled the teeth out of the Soviet political offensive to draw them into its sphere of interest.    

This grand strategy was enormously successful. The U.S. economic model and its companion democracy presided over economic growth of unprecedented length and magnitude. 

The Third Phase

After the collapse of the Soviet Union in 1991 the question was: What now? There were hints that President George H. Bush envisaged to follow in the footsteps of President Harry Truman and craft a new world order. 

He lost the presidential election in 1992 to Bill Clinton who never harbored such ideas but was content to enjoy U.S. supremacy. That was possible with Russia out of the game and China still too weak.

The terrorist attack on Sept. 11, 2001, was not of strategic importance but turned out to be so. It was the last chance to craft a new world order combining fighting terrorism and preserving institutionalized economic globalization, but President George W. Bush rejected this option. Instead, he went for a coalition of the willing, which proved to be narrow and alienated a large number of nations. 

Grand strategy during the Obama and Trump administrations became gradually steered by a retreat from America’s role as leader of the free world. The global financial crisis in 2008–2009 sowed doubt about the economic model. The opposition or indifference to trade deals (Trans-Pacific Partnership as the prime example) stopped further global liberalization of trade in goods and services of which services were a key element in future power games. Since 1960 the share of global Gross Domestic Product (GDP) has nearly halved. The persistent deficits on the balance of payments (the last surplus was recorded in 1973) and the federal budget (since 1957 a small surplus has only been registered five times) depict an economy out of sync. 

As the share of global GDP fell, the benefits accruing from institutionalized economic globalization fell too. Donald Trump drew the logical conclusion. He realigned costs and benefits and the only way to do so, was to cut global commitments.

It has often been represented as a withdrawal from alliance commitments and institutionalized economic globalization but was anything but. It was far more subtle. The Trump administration conveyed the message that it was still on board, but commitments would be measured to benefits flowing to the United States, which did no longer fight to defend a societal system. Its policy, as for any other nation, was to pursue its own interests.

The Fourth Phase

Biden has inherited the ingredients that engendered Trump’s changes in grand strategy. The United States is confronted with equally sized economies, non-identical political systems performing well, receding soft power and fissures in the global system originally designed to project U.S. power. 

The basic choice is between:  

(A) containing China, trying to stop its rise and using the existing global system to that effect, or 

(B) modifying and adjusting the existing system to accommodating the interests of rising powers, in particular China, while at the same time prolonging the Western imprint on the system. 

The signals coming out from Washington indicate that the first option has been chosen. This choice seems to be inspired by the Truman administration’s policy vis-à-vis the Soviet Union adopted in the late 1940s. 

Unfortunately, the situation in 2021 is completely different. 

First of all, the Soviet Union wished and openly pursued the goal of exporting its political and economic system. In Stalin’s prism, it was only a question of time before all of Europe would belong to the communist bloc.

China, or for that matter Russia, does not harbor any such ambitions. These countries do not wish to force other countries to abide by their political system. Indeed, it may be the other way around. They fear Western policies—as they see it—to impose Western political ideas on them. 

Secondly, the Biden administration is not reaching out to the majority of Emerging Markets and Developing Economies (EMDE). It is mainly seeking support from Western allies. Yes, it is flirting with India, but while India certainly wants to draw lines for China’s influence, it is hardly conceivable that India will join an alliance against China.  

Thirdly, in a few years China will have the biggest economy and, for a large number of countries, be the most important trade and investment partner. If the United States forces them to choose, then they will refuse to do so. And why should they?  

The alternative is to acquiesce in the shift of economic power. Non-Western countries must be offered a better deal as partners in the existing global system. The United States can still negotiate from a position of strength and craft a system strongly influenced by Western ideas, philosophy, norms and legal standards. China is far from a powerful hegemon. It cannot feed its own population, depends on the import of energy, faces frightening demography and is harassed by inequalities of various kinds. President Xi Jinping has twice at Davos meetings—January 2017 and January 2021—and in April 2021 at Boao Forum signaled willingness, indeed proposed to change the global system to inter alia “abandon ideological prejudice and jointly follow a path of peaceful coexistence, mutual benefit and win-win cooperation.”  

Time is running out. In 2030 the five biggest economies will be China, the United States, India, Japan and Indonesia. In 2050 it will be China, India, the United States, Indonesia and Brazil. 

In the end, the dilemma is: 

(A) to reform and adjust the global system, paying the price now of giving up some of its privileges, some of its economic powers, accepting decision-making reflecting the world economy as it is and not as it was and a more equitable burden-sharing. By doing so the U.S. and its allies may in the long term maintain a stronger position than their declining economies warrant, or 

(B) to hang on to the system as it is and refuse any reforms with the price of seeing EMDEs including China push through much more far-reaching changes or even worse build an alternative system offering the United States and its allies the option of “take it or leave it.” 

It is possible that a U.S. effort to rally other countries to contain China will end as a coalition of Western countries gradually seen as not only directed against China but designed to hang on to a world order out of date, sidelining everybody else.  

Joergen Oerstroem Moeller is the author of Asia’s Transformation: From Economic Globalization to Regionalization, ISEAS, Singapore 2019 and The Veil of Circumstance: Technology, Values, Dehumanization and the Future of Economics and Politics, ISEAS, Singapore, 2016.   

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