Global Affairs Session 73 6 August 2026

THE KINDLEBERGER TRAP

When no one wants to lead

The Kindleberger Trap describes a world in which the established power stops supplying global public goods, while the rising power does not replace it. Trump’s transactional America, Xi Jinping’s limited responsibility and Putin’s disruptive strategy point towards fragmented power, competing blocs, weaker institutions and crises without a trusted stabiliser.

Warning bells Kindleberger Trap Trump Xi Jinping Putin Where it is visible If no country leads

Trapped!

The Kindleberger Trap describes a world in which the established power stops supplying global public goods, while the rising power does not replace it. That danger is visible today.

• Trump’s America First strategy uses tariffs, selective commitments and burden-sharing pressure, signalling that US leadership will be more transactional.
• Xi Jinping promotes multilateralism, BRICS, infrastructure and governance initiatives, yet China still avoids costs of system-wide leadership.
• Putin exploits the vacuum through war, coercion and disruption, while challenging Western rules.
• The result is not Chinese leadership replacing American leadership, but fragmented power, competing blocs, weaker institutions and crises without a trusted stabiliser.

What is the ‘Kindleberger Trap’

• Charles Kindleberger argued that the world economy needs a powerful country willing to stabilise it.
• Before the Second World War, Britain had become too weak to lead, while the United States remained reluctant.
• No country reliably protected open trade, financial stability, international lending or collective security.
• The leadership vacuum helped transform economic shocks into depression, nationalism and international conflict.
• Today, the central question is whether America still wants to bear the costs of maintaining global order.
• The danger is not simply China defeating America - it is a world in which neither country provides dependable leadership.

Trump: Leadership becomes transactional

• Donald Trump’s America First approach treats alliances as bargains rather than permanent American obligations.
• Tariffs are being used to secure reciprocity, protect American industries and pressure trading partners.
• Trump has pushed NATO members to spend more, helping produce a commitment to reach 5% of GDP by 2035.
• European countries are consequently being asked to assume greater responsibility for their own defence.
• American support for Ukraine increasingly depends on negotiations, burden-sharing and direct US interests.
• Trump is not abandoning global power; he is replacing open-ended leadership with selective, deal-based leadership.

Xi Jinping: Rising power, limited responsibility

• Xi Jinping presents China as a defender of multilateralism, sovereignty, free trade and a multipolar world.
• China is expanding influence through BRICS, the Belt and Road Initiative and the Global Governance Initiative.
• Beijing is also seeking a larger role in setting rules for artificial intelligence, development and international institutions.
• China possesses enormous manufacturing power and leverage over rare-earth minerals and global supply chains.
• However, Beijing has not become the principal security guarantor, crisis lender or protector of open international markets.
• China appears willing to reshape the system, but not necessarily to pay the full economic and military costs of leading it.

Putin: Power through disruption

• Vladimir Putin does not seek to maintain the existing Western-led order; he seeks to revise its rules and boundaries.
• Russia’s continuing war against Ukraine demonstrates the consequences of weakened collective deterrence and divided diplomacy.
• Despite Trump’s attempts to promote negotiations, reporting indicates that Putin remains focused on military and territorial gains.
• Moscow uses military force, energy influence, nuclear signalling, cyber capabilities and political relationships to increase leverage.
• Russia’s partnership with China strengthens both countries’ campaign for a more explicitly multipolar international order.
• Putin benefits when Washington, Beijing and Europe cannot agree on who should enforce rules or impose consequences.

Where the trap is visible today

• Ukraine: No major power has been able to deliver either a decisive settlement or a stable security framework.
• Taiwan: US–China trade negotiations continue while military pressure and warnings over Taiwan intensify.
• Global trade: Tariffs, export controls, industrial subsidies and rare-earth restrictions are replacing predictable trade rules.
• European security: NATO is strengthening, but Europe is being pushed to prepare for reduced American burden-bearing.
• Technology: The United States and China are building competing systems around AI, chips, data, platforms and standards.
• Global institutions: The United Nations and other bodies struggle when powerful states selectively follow rules and block collective action.

What if no country leads?

• The world may divide into overlapping American, Chinese, Russian and regional spheres of influence.
• Smaller countries will practise strategic hedging - working with America for security, China for trade and Russia for energy or weapons.
• International crises will become harder to contain because responsibility will be divided and enforcement will be inconsistent.
• Global problems such as climate change, pandemics, debt, AI safety and maritime security will receive fragmented responses.
• Avoiding the trap requires shared leadership involving the US, China, Europe, India, Japan and other influential middle powers.
• The emerging order may therefore need coalitions of stabilisers, rather than one country acting as the world’s permanent leader.

Value addition

Glossary and related terms

Kindleberger Trap

A leadership vacuum in which an established power becomes less willing or able to stabilise the international system, while a rising power does not assume the full responsibilities of leadership.

Global public goods

Benefits such as open trade, financial stability, collective security and crisis management that support many countries and cannot easily be supplied by fragmented national action alone.

Leadership vacuum

A situation in which no major power is accepted as both capable of and responsible for maintaining rules, stability and coordinated responses.

Transactional leadership

An approach that treats alliances and international commitments as conditional bargains linked to reciprocity, burden-sharing and immediate national interests.

Burden-sharing

The distribution of defence, financial, diplomatic or institutional responsibilities among allies and partners.

Multilateralism

Cooperation among several states through shared rules, negotiations and international institutions.

Multipolar world

An international system in which power is distributed among several major states or centres rather than dominated by one or two powers.

Crisis lender

A state or institution willing to provide emergency finance or liquidity when economic shocks threaten wider instability.

Collective deterrence

Joint action by several states to discourage aggression by signalling that an attack will produce a coordinated response.

Revisionist power

A state that seeks to alter existing international rules, borders, institutions or distributions of influence.

Strategic hedging

Maintaining relationships with competing powers for different needs so that a country is not excessively dependent on any single partner.

Sphere of influence

A geographical or political area in which a major power exercises unusually strong security, economic or diplomatic influence.

Middle power

A state that is not a superpower but can shape regional or global outcomes through diplomacy, coalitions, economic weight or specialised capabilities.

Coalition of stabilisers

A group of influential states that collectively supplies leadership, crisis management and institutional support instead of relying on a single permanent leader.

Value addition

Conceptual references

• Charles P. Kindleberger’s argument that the international economy requires a powerful country willing to stabilise it.
• The interwar transition in which Britain had become too weak to lead while the United States remained reluctant to assume full responsibility.
• The provision of open trade, financial stability, international lending and collective security as global public goods.
• Contemporary debates about America First, burden-sharing, Chinese multilateral initiatives and Russian revisionism.
• Strategic hedging, spheres of influence and the possibility of coalitions of stabilisers in a multipolar order.