The Great Rebalancing
Change in the International Order and What to Do About It
For the next five hundred words, forget about Donald Trump. I know that’s difficult, when we’re worried about our livelihoods, and our children’s futures, but, I’m going to ignore the spark, and talk about the tinderbox. A tinderbox we’ve created. That tinderbox is, the rules-based international order, and Trump is a random spark that set it on fire. Canada, along with other countries, has benefited greatly from the rules-based international order. This is what allows us to trade with one another. It’s what allows a cargo ship to leave one port and arrive safely in another. However, it was only a matter of time before this order began to burn. For at least the past fifteen years we’ve been asked to pay more to maintain it, and we deferred. Now Canadians can either rebalance the burden, or be forced to survive on our own in a more dangerous world.
A rebalancing of the costs and benefits of this order has been a long time coming. Long before you-know-who came back. Let’s look at some numbers. The United States is 5% of the world’s population, 25% of the world’s GDP, but 50% of the world’s military spending. Meanwhile, the European Union represents 7% of the world’s population, 17% of global GDP, and almost 50% of the world’s social spending. Stanford University’s Dr. Stephen Kotkin estimates the U.S. guarantee of European security represents a $350 billion per year subsidy of western Europeans’ quality of life. What I’ve written here is based on Kotkin’s speech, “The World in Flux, and Trump’s Role in a New Equilibrium,” from April 2025, (available on YouTube). Of course, this is also a subsidy of Canadians’ quality of life. Yes, the United States led the establishment of this order, and ensured they greatly benefited from it, but so did the rest of us. Reasonable people can debate the history of how this arrangement came to be, but the fact remains Americans just elected a government to limit their role, because they can no longer afford it.
The United States is on a fiscally unsustainable path, and needs resources to improve the quality of life of its citizens, and to meet future geopolitical challenges. It’s well known, the U.S. debt-to-GDP ratio is a significant problem. Already at historically high levels, it continues rising. During the presidency of George W. Bush, the U.S. federal budget was about $4.6 trillion. Under President Biden’s administration federal spending reached $7.6 trillion, a $3 trillion increase in a single generation. President Trump isn’t inclined to rein-in spending. In America’s current political climate, tariffs are more popular than taxes, so this is the tool President Trump favours in order to rebalance the burden of policing the international order.
Without enforcement the rule-based international order will descend into prison-yard rules, so Canada must bulk-up and form a new gang. When might makes right, Canada and other middle powers no longer able to shelter behind Captain America’s shield will not fare well, unless they stick together. Canada must meet it’s NATO spending target, guard our Arctic, and contribute to the deterrence of Russia. Meanwhile, we should increase our diplomacy to recast what was forged after the Second World War, into a rules-based international order more countries aspire to join. Key parts of the order can be saved, and other parts will require rebuilding. Now is the time for Canada and middle powers to take the lead, put out the fire and ensure the durability of the rules based order for generations to come.