Are countries in Europe and elsewhere across the world turning away from the United States? Robert H. Wade writes that while the US remains the world’s most powerful country, Donald Trump’s second presidency has coincided with a marked decline in its global leadership.
The mainstream media is full of reports of US decline. In the words of a recent New York Times article: “Global investors are balking at US bonds. Talk of the dollar’s dwindling power is getting louder. Foreign governments are hauling their gold out of American vaults. Almost two years into President Trump’s second term, the world economy is increasingly looking for ways to distance itself from America.”
This trend is caught in two Gallup World Polls covering around 130 countries undertaken in 2024 and at the end of 2025. In the first poll, before Donald Trump’s second term, the United States was given an approval rating of 39%, while China received 32%. In the second poll at the end of the first year of Trump’s second term, China recorded an approval rating of 36%, while the US received only 31%.
The implication is that the US is losing its hegemonic status, but how can we assess “hegemony” more analytically?
Measuring US hegemony
The degree of US hegemony at a point in time depends on first, US resource capability, meaning the quantity of resources the US state and linked agents (such as US transnational corporations) can use in relations with other states (for example, US share of world GDP, US share of world military expenditures, the US alliance system).
Second, it depends on the degree of US control over the international structures it and most others must operate within (for example, the dollar system and the IMF). And finally, it depends on the balance between US transactional leadership exercised by the consent of allies and US leadership exercised through dominance (coercion).
For the US to remain clearly hegemonic, three conditions must hold. First, it must still have the preponderance of resources in dealings with other states. Second, it must still substantially control – more than any other state – the structures that shape the interactions of states. And third, it must exercise leadership mainly through the consent of allies.
The US for most of the period since World War II has met all three criteria of hegemony. On capabilities, it has long had the biggest share of global output, military expenditure, reserve currency holdings, patent applications and corporate profits.
It has at least 700 military bases outside of the United States, compared to Russia and China each with fewer than 15 overseas bases, however broadly a “base” is defined. Over 70% of the foreign currency reserves of central banks were in dollar-denominated bank deposits and Treasury securities in the early 2000s.
On leadership, the US has led mainly through consent, by successfully representing US national interests as general interests (elided into global interests) and embedding them in global institutions and norms (in the IMF and World Bank, for example).
It has accepted institutional restraints on its own use of power, making it more predictable and less threatening. This has widened the range of states accepting the order of which the US was chief architect and defender (though accepting through legitimacy and accepting through prudential acquiescence are often difficult to distinguish).
The US has more than 50 treaty allies and formal security partners, who for decades have voluntarily chosen to align their security with Washington. The US has also been able to draw alliance partners into almost all of its military interventions since the Korean war (1950-53), even if often on a small scale.
Declining US leadership
Today, under Trump, the US government remains the government with by far the largest quantity of resources deployable in relations with other states. It has by far the largest share of world GDP and is up near the top in terms of average income (both in nominal dollars). It still has the strongest military at global scale.
In the production domain, it has preponderant control over the frontiers of the AI revolution. In the financial domain, it continues to substantially control international finance: 89% of global foreign exchange transactions are still in dollars, as are almost 60% of the foreign currency reserves of the world’s central banks. In knowledge structures, too, it remains preponderant. For instance, 7 US universities are in the top 10 in the Times Higher Education World University Rankings.
Despite this, the US has significantly withdrawn from leadership by consent, shifting more towards leading by dominating. It has stopped bearing the costs of providing international public goods on which (it says) other states are free-riding and shifted towards extraction as a central principle of relations with other states, making others pay adjustment costs.
It uses tariffs as instruments of bilateral leverage. It links other countries’ access to its market with their declarations of political loyalty. It demands that allies purchase military protection with investments in US assets. A new poll from the Rockefeller Foundation finds that Canadians, Mexicans, Brazilians, Chileans, Turks, Indonesians, Singaporeans and more see the United States as more of a “major threat” than either Russia or China.
Over the first year of the second Trump term, the US withdrew from 31 UN entities – including the World Health Organization – and 35 non-UN organisations. This includes just about all treaties and organisations related to the environment and climate. It has imposed sanctions on judges of the International Criminal Court as part of its effort to undermine it.
On the other hand, the US remains the leading member of the IMF, World Bank and World Trade Organization. In the first two, it is the only state with a veto, a right it demanded in the Bretton Woods negotiations of 1944.
In short, we have to distinguish movement in different domains. The US is still hegemonic in the domains of finance and in technology. It not only leads but designed the basic international institutional structures through which others still interact in accordance with its rules.
But in the leadership domain its power has weakened appreciably. The administration threw a fit demanding allied aid from countries in Europe and elsewhere to attack Iran and reopen the Strait of Hormuz, to be greeted with stony silence. Yet Washington had not even consulted them before launching the attack – an attack which we now know stands out in military history as having not even a Plan A, let alone a Plan B.
A multipolar world system
In all domains the US is acting less benevolently, more imperialistically, more transactionally and more extractively. It demonstrates its now more imperial hegemonic power over the structures that almost everyone uses through its use of export controls, dollar-clearing restrictions, sanctions and the pay-to-play provision of military security.
But each use makes manifest that the structures have become instruments of US national (and Trump family) purposes, not neutral infrastructure for public goods. Over time this will encourage other states and entities to move from accepting US hegemonic leadership through legitimacy, to accepting it through prudential acquiescence, towards finally not accepting it while building institutional alternatives to the structures the US currently dominates.
That in turn accelerates the ongoing trend of multi-polarisation of the world system, as more states come to see the US as an unreliable partner, with whom economic and military cooperation can be dangerous.
China, with an average income only around a fifth of the US’s average income (in nominal dollars), has established powerful leverage over US policy through its near monopoly of the rare earth minerals needed in the production of a wide array of high-tech products, including military products.
It has used its control over exports to pressure the US not to supply weapons to Taiwan, for example, and to not impose punitive tariffs on Chinese exports. Some two thirds of countries now have China as their biggest trade partner. China has now far surpassed the US in patent applications filed by its residents worldwide.
China and Europe are both rushing to build ways to reduce their dependence on the dollar system. Europe is building a Capital Markets Union to create a central market for capital in euro-denominated financial assets.
China is growing the yuan-based Cross-Border Interbank Payments System (CIPS) to compete with US banks and the dollar, and to allow others to escape from the “correspondent banking” requirement which dictates that almost all international US dollar transactions must pass through a bank physically located in the US – where they can be subject to US government control.
Already the share of dollar-denominated bank deposits and Treasury securities in the foreign currency reserves of central banks has fallen from over 70% in the early 2000s to 58% in 2025. However, it is striking that China continues to denominate some 70% of its trade in US dollars.
The 11 states now in the BRICS+ coalition are slowly, with difficulty, working towards establishing multilateral institutions that can bypass US control. The spectacular US miliary collapse in the Middle East raises strong doubts about the US’s value as military protector.
Still hegemonic?
US hegemony – understood most generally as the ability to shape the world to its advantage, whether through legitimacy or coercion – was declining before the first Trump government (2017-2021), not least because of the rise of China’s influence in the world.
This change has been crystallised in the meme, beloved by Chinese analysts, “the East is rising, the West is declining”. The US sway has waned even more during the second Trump government, as Trump constantly declares how powerful he is while acting in ways that break the trust of allies.
But analysts run the danger of focusing on what is changing, overlooking what is not changing. Even in the fragmenting, multi-polarising order of 2026, enough of the earlier hegemonic pillars remain that the US loss of power has not yet reached the point where the answer to the question posed in the title of this article – Is the US still hegemonic? – becomes a “no”.
About the author
Robert H. Wade is Professor of Global Political Economy in the Department of International Development at the London School of Economics and Political Science.