Tariffs, Hegemony and the Iran War
By H.M. Child
Picture this: it’s the 2000s. A Republican dubbed “the dumbest President in history” resides in the White House. Doctor Who series 1 & 2 are back on British television. A feckless neoliberal Labourite squats in Downing Street as Farage’s fringe party dictates foreign policy. Economic collapse looms on the horizon. And an unnecessary and illegal war has broken out in the Middle East, with the US at its heart.
There are far too many similarities between us today and the 2000s, though with worse music and more doomscrolling – if there were ever a time the Spice Girls were needed, its today. However, we have come into an entirely new era, wherein we face an upheaval of the international order. We see the weakening of NATO, the withdrawal from the United Nations, the growth of Euroscepticism, and a potential surge into isolationist and nationalist politics.
And now, we may see the death of US hegemony – but why? And what will that result in?
Broadly, we can acknowledge that the aftermath of the Second World War going into the Cold War placed the US at the forefront of international politics, especially since the nineties, the so-called “end of history.” The US had successfully become a hegemon of the world, centralising itself as a security power (to use Realist IR theory). And in doing so, the US ensured the continued safety, security, and stability of all those who fell underneath its realm of control.
It is erroneous to call this a protection racket, as the unwritten contract was a fair trade: ‘I will help you with protection, and you will help me with my trade’; a quid pro quo that underscored decades of history, giving the US the largest economy on the planet, as almost all trade flowed through its borders. But this has weaned in recent months.
That which has given the US the edge, now is functions as the US’s tool for policy.
Donald Trump has made no small issue out of tariffs as a tool for executing his foreign policy, offering reduced tariffs on nations that are willing to “play ball”, such as the Philippines and Indonesia who received massive reductions by dropping their own tariffs with the US to 0% and buying American goods. Trump clearly views the tariffs as a way to force foreign governments to follow his will, and to increase the tax revenue of the US by ensuring American citizens have to pay more for goods, ensuring a reduction to the deficit to the tune of $264 billion in 2025, causing a stock market crash in the process.
The problem is that they were illegal.
This led to the use of Section 122 of the 1974 Trade Act, laying down a 10% tariff for all nations for 150 days (expiring on the 24th of July) – no longer about forcing the hand of foreign nations, with an ‘obey or be impoverished’ tagline, but instead about merely implementing the tariffs. Maybe for the reducing the deficit, though this is unlikely considering Trump also is responsible for only $443 billion in his previous term, compared to Biden with $1.9 trillion.
All this pageantry of tariffs and taxes have garnered mixed opinions on the President; however, they have also had a very unintended consequence: they have bred distrust in the US. Our hub of international trade, and our hegemon of strength is now an unreliable ally. And the market does not like unreliability.
Nicknamed ‘TACO’ now (Trump Always Chickens Out), the market has adopted a belief that Trump will always do what is best for Trump – including alleged insider trading. But it is almost certain that every time the President enacts a sweeping economic change, it will be undone shortly thereafter – once the shares have been bought and sold.
So now we find ourselves with a large-scale mistrust with the US, especially among its closest allies – even the UK, with the ‘special relationship,’ has opted for closer ties with the EU, seeing the US as too untrustworthy. Meanwhile markets are, too, turning away from the US, viewing it as a more chaotic, opting instead to invest in European and Asian markets, with $52 billion having been pulled from US markets since the start of 2026.
The Iran War has revealed that Trump can no longer rely on his allies, too. Europe has ignored the calls to war that they had previously answered to – anyone remember Iraq? But what we can learn is that the US’s hegemony is slipping. As our hegemon, we have learned that they are all-too-willing to elect chaotic and destructive candidates, and that those candidates will cause havoc on our institutions. This will perhaps add to the list of reasons for nations to become more insular and nationalistic.
This war speaks to the chaos that Trump has caused.
American Hegemony – the Pax Americana – is dead. And American voters have ensured its death because they believed in campaign promises.
But to be more optimistic, this might rebuke the MAGA faction of the USA. Trump’s supporters have learned that their loyalty gave them more expensive fuel and better hidden Epstein Files; we may hope that this will mean voters will return to stronger leadership and candidates more focused on the US’s hegemony.
Then again, it may be time for a new hegemon. Should we align ourselves more with China, or should the EU move itself to becoming the new hegemon? Perhaps it is time to abandon the United States? Either way, we can say with certainty that the global order will not be the same for an exceptionally long time.
Readings
https://www.reuters.com/business/buy-america-bye-america-wall-street-exodus-gathers-pace-2026-02-20/
https://www.nytimes.com/interactive/2026/business/economy/trump-tariff-tracker.html
