This week, Washington faced a choice that it will face repeatedly until it finally makes it explicit. On Monday, the Trump administration demanded NATO increase defense spending. On Wednesday, Chinese military exercises around Taiwan escalated. On Friday, tensions spiked in the Middle East over Iranian oil shipments. America has the military capacity to dominate any one of these regions. It lacks the economic, military, and political capacity to dominate all three simultaneously while also maintaining global institutional leadership. This is not a temporary imbalance produced by poor planning or weak leadership. It is structural. It reflects a fundamental contradiction at the heart of American strategy: America is attempting to simultaneously be a continental hegemon protecting North America and a global hegemon ordering the entire world. These roles are incompatible.
How American Hegemony Actually Worked
American strategic dominance since 1945 rested on an unusual arrangement: America provided security guarantees and market access to wealthy democracies in Europe and Asia in exchange for political subordination to American interests and institutions. This was genuinely beneficial for allies they received protection and prosperity. But it was asymmetrical. America’s interests came first. Allies’ interests came second.
This arrangement worked for 75 years because American power was sufficiently dominant that it could absorb the costs of global commitment. But relative American power has declined measurably since 1991. America’s share of global GDP has fallen from 40% to 27%. China’s has risen from 2% to 18%. Other powers have built military capacity faster than America has. The material conditions that allowed global hegemony vast geographic isolation, uncontested technological superiority, institutionally weaker rivals, no longer exist.
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Currently, America maintains security commitments to 50+ nations, military bases in 140+ countries, and assumed responsibility for order across Europe, Asia, the Middle East, and the Pacific. Simultaneously, it is attempting to contain China, maintain European security, manage Middle Eastern conflicts, and defend North America. This is unsustainable.
The Structural Contradiction
The fundamental problem is stated simply: America consolidated power as a continental actor and then attempted to leverage that power globally. But continental and global hegemony operate on different logics.
As a continental hegemon, America’s natural interests are focused on North America securing the hemisphere, maintaining friendly governments in Mexico and the Caribbean, and ensuring no hostile power can project force into the Western Hemisphere. The transcontinental railroad, the Monroe Doctrine, and the consolidation of the western frontier were all expressions of this logic.
Global hegemony requires something entirely different: maintaining the political will to defend the interests of 50+ allied nations, sustaining military presence across 140+ countries, managing the rise and fall of regional powers, and absorbing the costs of defending wealthy democracies that face security threats that do not directly threaten America. This worked when American power was overwhelming. It becomes catastrophically difficult when power is merely dominant.
The observable evidence is stark. In 1990, American defense spending was 5.2% of GDP. Today it is 3.5%. But that decline understates the problem, because costs have risen. Personnel costs are higher, equipment is more expensive, and global commitments span more regions. So America is spending less (as a share of GDP) while committing to defend more territory against more threats. This is mathematically unsustainable.
The strongest objection to this argument is that increased defense spending could solve the problem. The Trump administration is requesting $850 billion in defense spending near record levels. But spending increases will not solve a problem that is not primarily fiscal. The problem is political and institutional. America cannot sustain the political consensus necessary to maintain global commitments while also meeting domestic expectations about infrastructure, healthcare, and welfare spending. And it cannot sustain the institutional arrangements necessary to manage 50+ alliances, each with competing interests, while also preparing for a primary competition with China.
Every American president since 1991 has attempted to manage this contradiction through some version of “priorities and partnerships” focus intensely on one region while maintaining alliances elsewhere. Clinton focused on Europe and the Balkans. Bush focused on the Middle East. Obama attempted a “pivot to Asia.” Trump focused on great power competition with China and Russia. Biden attempted to focus on China while also renewing European commitments.
All of these failed. Not because the presidents were incompetent, but because the contradiction is structural. You cannot maintain ironclad security guarantees to European nations while also fully preparing for war in Asia. You cannot simultaneously demand that European allies increase defense spending and that they remain dependent on American security. You cannot tell Japan and South Korea that they are the center of American strategy while also telling NATO that the alliance is America’s most important security commitment.
Every president attempts to manage these contradictions through rhetoric, sequencing, and diplomatic theater. Every president fails because rhetoric cannot change material facts. The material fact is that America has committed to defend territory and interests across the entire globe, but it has only enough military, economic, and political resources to dominate perhaps two regions at a time.
Consider the specific case of NATO. America demands Europe increase defense spending (fair criticism—European spending has been low). But America simultaneously conditions its security guarantee on European compliance with spending targets (which destroys the credibility of the guarantee). And America simultaneously attempts to pivot toward Asia to focus on China (which suggests Europe is not actually the priority). These three positions are contradictory. They cannot all be true simultaneously. Yet American leaders are attempting to assert all three.
Three Paths Forward to 2040
The muddle-through scenario (60% probability): America maintains nominal commitments everywhere while being unable to fully execute on any of them. Defense spending increases, allies build autonomous capacity in parallel. China consolidates regional power in Asia. Europe develops strategic autonomy. By 2035, a specific incident (Taiwan crisis, Baltic conflict, or major Middle Eastern escalation) forces explicit choice about American priorities. America responds by withdrawing from one region (most likely Europe) to consolidate elsewhere. The withdrawal is messy and damages credibility, but happens because the alternative is catastrophic overextension. This assumes no forcing incident before 2035 that makes the contradiction unavoidable.
The crisis-forced choice (25% probability): A specific security incident forces the choice earlier. Either China moves against Taiwan before 2028, or Russia tests American commitment in the Baltics, or the Middle East escalates suddenly. America must choose: defend Asia or Europe? If it chooses Asia, NATO becomes a European alliance with America as marginal player. If Europe, it signals to Asian allies that American commitment is unreliable, accelerating Chinese regional consolidation. Either choice produces significant geopolitical realignment. This scenario depends on an incident that cannot be managed without full American commitment.
The explicit retrenchment scenario (15% probability): American leadership explicitly embraces strategic retrenchment before being forced. The administration announces consolidation of commitments to core interests in North America, transactional relationships with wealthy allies (Europe and Japan provide their own defense), and focuses military resources on containing China in Asia. This would be politically difficult domestically but would create coherence between interests and commitments. Allies would have clear expectations. This requires explicit acknowledgment that hegemony is ending something no American president has been willing to do.
What the Next Five Years Will Reveal
American global dominance is not ending because America is weak. It is ending because America is attempting something structurally impossible: being simultaneously a regional hegemon confident in its sphere of influence and a global hegemon managing the entire international system. Between now and 2040, American leadership will be forced to choose which role it actually wants to play.
The critical question: Does an American president explicitly articulate a new grand strategy that reconciles American interests with American commitments? If yes by 2030, watch what gets abandoned (most likely Europe). If no by 2030, watch for the crisis that forces the abandonment anyway. The answer determines whether the transition is managed retrenchment or chaotic collapse. Either way, the era of global American hegemony ends. The only question is the timeline and the collateral damage.
