Trap one: The Irreconcilable Innate Tensions of Capitalism

Trump’s re-election, to some extent, reflects American voters’ growing dissatisfaction with the political and economic order dominated by neoliberalism. This dissatisfaction has triggered a chain reaction of what might be called the “Tacitus Trap,” wherein the public harbors a fundamentally negative perception of the government. As a result, voters have grown dismissive of establishment figures like President Biden and instead pinned their hopes on

Trump, who presents himself as an anti-establishment outsider capable of breaking the constraints of traditional institutions.
However, Trump is not a thoroughgoing revolutionary. Rather, he is someone who seeks to extend, revise, or even nostalgically revive the neoliberal tradition. When his policies in a second term are considered in isolation, they may seem incoherent or inconsistent. But once placed in the broader temporal context—viewed in relation to his first term and the historical evolution of America’s political-economic regime—his actions can be interpreted as a form of “self-adjustment.” Trump is attempting to address the internal contradictions of neoliberalism that he failed to resolve during his first term.

As Jack Rasmus argues in The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump, “Trump continued and intensified the neoliberal trajectory established from Reagan through Obama—marked by privatization, wage suppression, and persistent advocacy for corporate tax cuts—under the belief that these measures would stimulate investment and boost employment.”

Trump’s stated intention to cut military spending stems from his desire to resolve one of the core contradictions of neoliberalism that has persisted since the Reagan era: the inability of the U.S. government to achieve an organic balance among increasing defense expenditures, tax cuts for corporations and investors, and reductions in social spending. In the face of these structural tensions, previous administrations largely relied on a “twin deficits” strategy—using debt to cover the shortfalls caused by mounting defense budgets and tax reductions.

Trump, however, pursued a more linear approach. He attempted to tackle the problem from the demand side, seeking to rein in military spending by imposing cuts and pressuring U.S. allies to boost their own defense budgets. In his new term, Trump may also attempt a more radical “recombination” of neoliberal policies by aligning monetary, fiscal, industrial, and trade policies more closely.

Historically, however, such recombination has often been accompanied by profound uncertainty. The 2008 financial crisis, for example, not only dealt a heavy blow to the U.S. economy but also destabilized the global economy. Consequently, how to implement effective macroeconomic coordination on a global scale to contain such spillover risks has become a central question in global economic governance.

Unfortunately, both the willingness and capacity of the United States to participate in global economic governance are in decline. This retreat may result in the internal contradictions of neoliberalism spilling over internationally, potentially inflicting significant harm on other economies.

Trap two: The “Neo-Malthusian Trap”-The Double-Edged Effect of Technological Advancement

The “Malthusian Trap,” originally proposed by British political economist Thomas Malthus, refers to the insurmountable contradiction between a geometrically increasing population and arithmetically increasing resources. In the absence of technological advancement or external intervention, a continuously growing population would eventually exceed the Earth’s capacity to sustain it, leading to catastrophic outcomes such as famine, war, and disease—reducing the population back to a level that available resources can support.

However, the “Neo-Malthusian Trap” we face today refers to a new set of challenges that have emerged under the influence of technological progress and other external forces. With ongoing advances in technology, large segments of the population may find themselves unemployed or forced to seek new forms of employment due to “high-intelligence substitution.” For example, workers in occupations with declining demand face the risk of unemployment and require retraining; those in upskilled positions may retain employment but suffer from decreasing wages.

The current wave of artificial intelligence (AI) revolution is increasingly displacing both mental and physical labor across a range of industries, including both emerging and traditional sectors such as information consulting and industrial manufacturing. A McKinsey & Company research report predicts that by 2030, approximately 15% to 30% of existing jobs worldwide may be replaced by AI. Looking forward, the AI revolution may significantly reshape labor markets around the globe. Those unable to adapt to this transformation risk falling into what can be termed a “Neo-Malthusian Trap.”

Workers in the Global South, in particular, are likely to be more vulnerable to this trap, given the rapidly widening digital divide between the Global North and South. Furthermore, studies show that women are more susceptible to AI-driven displacement than men. According to estimates from the International Labour Organization (ILO), AI could potentially affect 48 million female and 27 million male workers worldwide.

However, the replacement of jobs by AI does not necessarily translate to mass unemployment. New types of employment will inevitably emerge, yet this transformation presents a shared governance challenge for all nations. Key issues include: how to use education systems to enhance workforce skills in real time to meet the demands of the AI era; how to implement equitable secondary wealth distribution mechanisms to mitigate the risk of social unrest stemming from labor market disruptions; and how to construct a global framework for technological governance that regulates innovation, oversees emerging industries, and promotes ethical standards in science and technology. Balancing development and security, and coordinating progress with stability, are challenges that governments worldwide must now confront.

Trap three: The “Thucydides Trap”-Must a Rising Power and an Established Power Inevitably Clash?

The concept of the “Thucydides Trap” was proposed by Harvard professor Graham Allison, who analyzed historical cases of power transitions and found that conflicts between rising and established powers often ended in war—an idea used to frame the current U.S.-China relationship. The term originates from the ancient Greek historian Thucydides, who, in his History of the Peloponnesian War, analyzed the conflict between Athens and Sparta.
In that historical context, limited by the constraints of an agrarian civilization and finite material resources, Athens and Sparta engaged in a zero-sum competition over land, population, and other vital assets. With no institutional mechanisms to mediate disputes, their inability to manage rising tensions effectively led to war. Today, avoiding the “Thucydides Trap” remains a central concern for scholars and policymakers in international relations. Yet, it would be overly simplistic to apply traditional power-transition theories to conclude that the U.S. and China are destined for war.

In a globalized economy, growing interdependence through trade has become a crucial driver of worldwide economic growth. Supranational institutions such as the United Nations now play a significant role in mediating conflicts and maintaining order. Furthermore, the global nuclear deterrence regime—built on the strategic balance maintained by thousands of nuclear warheads—has drastically increased the cost of large-scale conflict, thereby reducing the likelihood of war among major powers.

Nonetheless, recent shifts in U.S. policy toward China have destabilized many of the conditions that once helped sustain the established international order. This has reignited speculation that the U.S. and China are falling into the “Thucydides Trap.” Ultimately, however, the trajectory of history depends on the strategic choices made by both countries. “If the two nations choose to be partners and friends, seeking common ground while reserving differences and supporting each other’s development, U.S.-China relations can thrive. But if they view each other as rivals or enemies—engaging in vicious competition and mutual harm—then setbacks and even regression are likely.”

Graham Allison has offered updated perspectives on how to avoid the trap. He argues that while intense competition between the U.S. and China is inevitable, the two powers must maintain candid communication—particularly in small, focused settings—and pursue close cooperation, especially on matters crucial to national survival. Building on Allison’s insights, and considering shifting global conditions, both countries must overcome zero-sum thinking and cultivate a constructive relationship of competitive coexistence. They must also work toward building new consensus and international rules, and manage risks in a timely and effective manner.

Trap four: The “Kindleberger Trap”-Does the Decline of a Great Power Intensify the Global Public Goods Deficit?

The “Kindleberger Trap,” a concept proposed by Harvard professor Joseph Nye, builds on economic historian Charles Kindleberger’s analysis of the Great Depression of 1929. Nye argues that when the international system lacks a leading state willing and able to provide global public goods, systemic failures in global governance are inevitable. In recent years, as the relative power of the United States has declined, so too has its willingness and capacity to lead global governance and supply public goods—prompting renewed concerns about a descent into the Kindleberger Trap.

Under the Trump administration, the U.S. pursued an assertively unilateralist foreign policy centered on “America First,” withdrawing unilaterally from key multilateral agreements such as the Iran nuclear deal and the Paris Climate Accord, and cutting foreign aid. These actions, in effect, reduced the global supply of public goods and widened the global “public goods deficit.”

Nevertheless, even as the U.S. retreats from certain responsibilities, global governance has not collapsed. International organizations such as the United Nations and the World Trade Organization continue to play critical roles. Europe has emerged with a stronger posture in defending and leading multilateralism, while emerging powers—most notably China—have taken on more proactive roles in global affairs. These developments provide important institutional frameworks and normative constraints for preserving a world order centered on peace and development, helping to avert a full descent into the Kindleberger Trap.

Moreover, the United States’ suspension of its participation in certain treaties—such as the Foreign Corrupt Practices Act—has indirectly expanded the international influence of European legal standards. China’s proposals of the Global Development Initiative, Global Security Initiative, and Global Civilization Initiative have also contributed to the provision of international public goods, offering concrete support for global peace, development, and stability.

In the face of global challenges, no country can afford isolation. All nations—especially major powers—bear an inherent responsibility to participate in global governance. Thus, the absence of a single hegemon does not necessarily lead to systemic failure in global order.

Looking ahead, the four aforementioned “traps” facing the international community are shaped by both objective forces and subjective decisions. For major powers, the only path forward lies in facing history honestly, making rational policy choices, fostering dialogue, and prioritizing cooperation. Through such efforts, they can avoid these traps, preserve peace and development, and secure lasting stability at home and abroad. In particular, global governance cooperation has already emerged as a key solution for overcoming these structural dilemmas.

Concrete pathways for such cooperation include four areas:
1.Leveraging platforms such as the G20 to enhance macroeconomic coordination and manage the external risks stemming from neoliberalism’s internal contradictions.
2.Incorporating technology ethics into global tech governance frameworks to better address employment shortages, weak consumption, and various non-traditional security threats.
3.Proactively participating in issue-specific global governance dialogues to create opportunities for bridging divides and forming consensus among major powers.
4.Remaining alert to the erosion of leadership in global governance and the growing public goods deficit, while calling for greater contributions from all actors to the financing and provision of global public goods.

Editor: LQQ