Pax Americana is over — what comes next for Southeast Asia?

There is broad international consensus that the age of the US-led international order is over. America is no longer seen as the preponderant power that seeks, however imperfectly, to use its strength to uphold norms and underpin institutions.

Instead, President Donald Trump has loudly declared that America’s efforts to create and lead a liberal international order were a waste of America’s scarce resources. According to this logic, such efforts only produce bad outcomes, such as grinding wars, mounting debt and free-riding allies. Additionally, Washington’s faith in free trade and free movement of peoples, according to Trump, hollowed out America’s industrial base and eroded its national character.

Following his return to office in 2025, Trump has advanced a US strategy of putting “America First”. In Trump’s telling, this means strengthening America’s borders, rebalancing global trade, redirecting American foreign assistance funds to address domestic priorities, and shifting the burden for international conflicts to those most directly impacted by the fighting. ISEAS – Yusof Ishak Institute senior fellows Hoang Thi Ha and William Choong have framed this policy pivot as a shift to an America First ethos: “American strength must be built for America and from within America.”

Actions beget reactions. America’s withdrawal from active leadership has coincided with the emergence of conflicts around the world. As Singapore Prime Minister Lawrence Wong has observed, “There are flashpoints everywhere. You can see violence and conflicts in the world going up. Countries can act with greater impunity against international law with less consequences.”

Historically, geopolitical shifts tend to be violent and disorderly. For example, religious and dynastic tensions in Europe triggered the 30 Years’ War (1618-1648), which devastated the continent. The collapse of the Ottoman and Austro-Hungarian empires created conditions for World War I. The collapse of the Soviet Union in 1991 contributed to ethnic conflicts and wars in the Balkans. The geopolitical shifts currently underway seem to be following a similar pattern of violence, most noticeably in Ukraine and the Middle East.

While the US-led international order is fraying, it is less clear what type of order will emerge in its place. There is a range of plausible scenarios. For example, some scholars, such as Brookings Institution senior fellow Robert Kagan, argue that the world is returning to its more natural state, a law of the jungle where the strong do what they wish, and the weak accept what they must. Kagan and others argue that without strong American leadership, the world will revert to a more authoritarian and chaotic state. He believes history is cyclical and not linear. In this telling, as America reverts to a cycle of retrenchment like in the 1930s, authoritarian regimes will rear their heads again in Europe, Asia and elsewhere, just as they did during the run-up to World War II.

If Kagan is correct and the world is reentering a similar cycle, norms such as the prohibition on territorial conquest could come undone. Strong powers could emulate Russia in becoming nakedly acquisitive of other countries’ land and natural resources. Such aggression, or the threat of it, would force leaders around the world to devote more resources to national defence. It also could lead to an era of nuclear proliferation, as countries turn to new capabilities to offset the loss of America’s security backstop.

Another scenario would involve the US pulling back on its global commitments to prioritise national resources on Asia, and specifically, on countering China’s ability to control its periphery. Historically, the fear of a rival dominating an economically vital region of the world has motivated dramatic American actions, including in World War I, World War II and the Cold War.

From a realist standpoint, China’s observable ambition and ability to assert regional hegemony represent a threat that America must challenge. And given America’s fiscal constraints, it no longer can afford to serve as the world’s policeman. Instead, it must focus its finite resources on preventing China’s domination of the most dynamic region in the global economy.

A third scenario would be characterised by the selfish pursuit of national interests. In this scenario, countries would focus on maximising their national interests, even at the expense of others. In contrast to the first scenario (law of the jungle), though, national boundaries would remain relatively static, and there would not be snowballing attempts to redraw borders through military conquest. Instead, major powers would squeeze smaller states for whatever benefit they could secure.

Major powers would grow less attached to international institutions and instead focus more attention and energy on their preferred platforms for advancing their goals, such as the BRICS+ grouping for China and the G-7 for the US. This fragmentation would widen gaps between countries that view themselves as developed versus countries that self-identify as developing.

This scenario would lead to less coordination among countries in addressing regional and global challenges. Instead, each country and region would be forced to assume greater responsibility for conflicts and crises in their periphery, much as Europe is being pressed to take on greater burdens on the Russia-Ukraine war, and post-war reconstruction in Syria is being treated as a problem mostly for the Gulf region to solve.

For issues that are global in nature, such as climate change, AI governance or pandemic preparedness, there simply would be less international coordination and capacity. Instead, national leaders would need to devote more resources to building higher walls around their own countries to try to limit and mitigate the spillover of transnational challenges into their territories. 

While there are a vast number of gradations between and beyond these scenarios, such as the reemergence of spheres of influence, the key point is that the world is transitioning out of a US-led international order. History suggests that the transition period could be turbulent. If the strongest powers at this moment, namely China and the US, increasingly operate by their own rules — with power as the only real constraint — then the risk is contagion. Other countries surely would follow suit. Over time, this rule-less dynamic would generate international friction, with likely implications for trade, investment and overall economic growth.

Lately, it has become almost trite to suggest that the world is becoming multipolar. This redistribution away from American unipolarity is a welcome outcome for many leaders and leading thinkers in Europe, India, Russia, China, Southeast Asia and many other countries around the world. Even US Secretary of State Marco Rubio has embraced the concept. In one of his first interviews in office, Rubio described American unipolarity as “an anomaly” and a “product of the end of the Cold War”. According to Rubio, the US is no longer the dominant power, but rather one of a handful of “great powers in different parts of the planet”.

Chinese senior officials often publicly espouse the virtues of multipolarity. Doing so aligns China’s views with those of developing world partners they are seeking to cultivate. It also shields China from accusations that it seeks to replace the US as the dominant power and hegemon on the world stage. From Beijing’s perspective, any outcome that curtails American influence and generates greater freedom of action for China is a positive development.

Privately, however, in my experiences, Chinese senior officials and scholars acknowledge that the world remains bipolar in terms of the distribution of national power. They avoid such framing in public remarks, though. Chinese officials are wary of appearing out of step with key partners who favour multipolarity. They also worry that bipolarity often gets equated with the Cold War, a dynamic China is keen to avoid in its present-day competition with the US.

Instead, Chinese officials and leading thinkers publicly espouse the need for greater multilateral coordination through the United Nations as well as via their own initiatives, such as President Xi’s Global Governance Initiative, Global Security Initiative, Global Development Initiative, and Global Civilisation Initiative.

Take a step back, however, and in terms of raw national power, the world has two great powers, not more. In fact, the gap in national power between the US and China compared with the rest of the pack is significant. Both countries are simultaneously expanding the distance between themselves and every other country in economic size, pace of innovation, defence spending, and overall national power. Countries or groupings such as the European Union, Russia, India and Japan have major population and economic weight or military heft, but none have all. This puts them all a big step behind the US and China, with little likelihood of closing the gap any time soon.

Only the US and China possess capabilities as strong — or stronger — than those of typical great powers throughout history. As American academic Jennifer Lind has described, Japan and Germany possess great economic strength but appear unlikely to build military power to a level that would qualify them in the great power ranks. India sits close to the economic threshold of a great power but far below the threshold for military expenditure. India is also unlikely to significantly close the gap with China in economic or military strength in the coming decades. Russia is a fading power bolted on to a strong nuclear arsenal.

While the distribution of power between the US and China is fluid, the sizeable gap between both countries versus all others remains steady. This can be seen across a variety of metrics. For example, the US and China now account for a combined 43% of the global economy, according to IMF projections, with America accounting for roughly 26% of global output and China around 17%. In terms of stock of foreign direct investment (FDI), America and China are number one and two in the world. Additionally, the US and China are the top or second largest trading partners for virtually every country in the world.  

Militarily, the US and China have the two largest defence budgets, combining for nearly half of all global defence spending. America maintains unique global force projection capabilities. China has the world’s largest navy by fleet size, in addition to advanced missile capabilities, a rapidly expanding nuclear arsenal, and formidable force projection capability along its periphery.

Technologically, the two major powers are in a league of their own compared with the rest of the world. The US and China outspend every other country in research and development, lead in scientific publications and patents, and operate at the cutting edge of key frontier technologies such as artificial intelligence, quantum, space and biotech.

This dynamic of asymmetric bipolarity holds true globally as it does in Asia, as can be seen in the two most closely watched annual surveys in the region. The first, the Lowy Power Index, measures each country’s national power across eight thematic measures. The Index employs a sophisticated methodology to “measure the ability of countries to shape and respond to their external environment”.

According to Lowy’s 2024 rankings, the US and China hold a comprehensive measure of power of 81.7 and 72.7, respectively. This places both countries at nearly double the national power of the next Asian country on the list, India, which comes in at 39.1. Even as China’s power ranking has been plateauing below the US in recent years due largely to its deceleration in economic growth and influence, Beijing retains a sizeable lead over any other competitor, with little to no prospect of any other country matching or eclipsing China’s power in the coming decades.

The second key survey, ISEAS – Yusok Ishak Institute’s annual publication, The State of Southeast Asia, measures elite sentiment on developments in the region. The survey polls attitudes among scholars, business leaders, civil society, media and government figures.

In the 2025 results, China was viewed as “the most influential economic (56.4%) and political-strategic (37.9%) power in the region. China far outpaced the US on these measures, albeit with some decline in perceptions of its overall economic and political-strategic influence relative to previous years.

By contrast, the US overtook China in the survey to become the prevailing choice (52.3%) in the region when respondents were forced to align with one of the two strategic rivals. China, as a choice, dropped from 50.5% in the previous year to 47.7% in 2025.

No convener, no crisis manager

The disordering of the international system within a bipolar distribution of power will generate challenges and opportunities for countries in Southeast Asia. The principal challenge is that there will not be a strong leading power to act as a convener of regional efforts to address transnational challenges or a first responder to crises. America no longer appears willing to perform that role, and China does not seem interested in taking it on.

The Association of Southeast Asian Nations (ASEAN) can try to spur regional collective action to address transnational challenges, but it will be resource-constrained in its efforts to mobilise major responses to address challenges. This will place growing pressure on countries and companies to deal on their own with public health crises, natural disasters, climate adaptation and migration. It will also place stress on regional countries to uphold norms such as freedom of navigation and peaceful settlement of disputes.

On the flip side, there will also be more diplomatic space for institutional entrepreneurialism to address transnational challenges. New plurilateral groupings of like-minded countries will have more room to develop. There will also likely be more room for regional countries to contribute ideas to rule-making around new issues and emerging technologies, such as cybersecurity and regulations on the use of AI.

ASEAN’s multi-partner strategy

Many Southeast Asian countries will most likely continue to manage competing pressure from China and the US by developing relationships with as many powers as possible, or “polygamous diplomacy”, in the words of former Singapore diplomat Bilahari Kausikan. This approach dilutes great power pressure and opens pathways for the region to develop mutually beneficial relationships.

With the US playing a less overbearing role in the region, and with global perceptions of American reliability declining, there will most likely be greater opportunities for ASEAN members to forge deeper relationships with other key actors, such as Japan, South Korea, India, the European Union, Canada, the UK and Australia. Virtually all developed countries are looking for opportunities to fortify their positions amid America’s reimagining of its global role under Trump. They will all see value in deepening relations with ASEAN, a dynamic and innovative growth engine of the global economy.

Riding the new industrial revolutions

While ASEAN countries will need to remain attentive to regional security risks, arguably the defining variable for them in the coming period will be how well they capture the benefits of the unfolding industrial revolutions in AI, clean energy and biotechnology. These simultaneous industrial revolutions have the potential to turbocharge national economies or leave countries behind, depending upon how they position themselves in the rapidly changing global innovation ecosystem.

In this new era, key enablers of progress will include talent, capital, energy and access to technology. Southeast Asian countries will be able to advance in some of these areas on their own and will depend on external relationships for others. For example, leaders in the region would benefit by continuing to prioritise investments in education, with an emphasis on elevating digital literacy. By upskilling the next generation workforce, countries will be able to capture tremendous potential for improving productivity and overall economic performance.

Leaders would also gain outsized benefits from continually advancing efforts to build transparent and predictable national legal systems. Demonstrating progress in improving the ease of business will enable countries to attract FDI. Such FDI will be necessary if the region is to upgrade its access to energy, including renewable energy. 

Former Indonesian Minister of Trade Gita Wirjawan has wisely counselled that leaders in the region should remain connected with different economic blocs to maximise their optionality. As part of such efforts, they will want to pursue all available avenues to gain access to affordable technological inputs. As a key node of global manufacturing, Southeast Asia will likely be on the frontlines of global efforts to integrate AI and robotics into production processes. The earlier that countries and companies begin efforts to integrate these new technologies into production, the more they will solidify their roles in 21st-century value chains.      

This new era of disordered bipolarity could be turbulent, but it need not be destructive to the upward growth prospects of Southeast Asia. By remaining focused on the defining challenge for the region in this unfolding era — capturing benefits from the simultaneous industrial revolutions — leaders will best position their peoples to seize opportunities while managing risks.   

This is an adapted version of ISEAS Perspective 2025/83 published on 4 November 2025. The paper and its references can be accessed at this link.

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