Trump’s Second Term and the World of Three: Why a G2 Has Become a G3 Problem

As Donald Trump completes one year of his second term as US President, the central question confronting the world is whether his second year will be as disruptive as the first. Early signals suggest continuity rather than correction. Trump has revived a blunt conception of power, choosing muscle over money as his primary instrument of statecraft. This choice has far-reaching implications, not just for the United States, but for a global order that is no longer bipolar, yet not comfortably multipolar either.

Power, money and muscle: a revealing choice

Traditionally, great powers rely on two enduring tools: economic influence (money) and coercive strength (muscle). China, for decades, has leaned heavily on money—patient capital deployment, infrastructure financing, trade integration and manufacturing dominance. The US under Trump has moved decisively in the opposite direction.

Muscle works fast. It shocks, coerces and compels. Money works slowly, shaping incentives and dependencies over time. The contrast reveals deeper cultural orientations: impatience versus patience. But this choice also exposes a structural weakness. The US retains unmatched military muscle but faces fiscal constraints and rising debt. China commands vast financial resources but lacks comparable military reach. India, like most other countries, has neither at scale.

This asymmetry defines today’s geopolitical reality.

Why the “G2” illusion has collapsed

For years, analysts spoke of a “G2” world dominated by the US and China. That idea is now obsolete. The world has effectively become a three-player system: the US, China, and everyone else combined. Economists and political theorists have long warned that three-player systems are the most unstable.

This instability is not new. One of the most intuitive depictions appears in 1984 by George Orwell. Written in 1949, the novel imagines a world divided into three blocs—Oceania, Eurasia and Eastasia—where two are always allied against the third. Alliances shift, enemies change, but conflict is permanent. Technology enables surveillance, control and behavioural conformity. The resemblance to today’s world is unsettling.

The economics of three players: ice creams and horses

Economics offers parallel insights. The American economist and mathematician Harold Hotelling illustrated instability through his famous “ice cream vendors on a beach” model. With two vendors, stability emerges as each occupies half the market. Introduce a third, and equilibrium collapses. Each keeps repositioning to maximise advantage, leaving the system in constant flux.

This idea, known as “minimum differentiation”, holds only in two-player settings. Add a third, and balance becomes elusive.

A related insight comes from Reinhard Selten, who shared the 1994 Nobel Prize with John Nash. Selten’s work on sequential decision-making—often illustrated through “Selten’s Horse”—shows how rational, step-by-step choices can still produce collectively unstable outcomes, especially when three actors are involved. Each player does what seems optimal in the moment, but the system as a whole remains fragile.

From families to foreign policy: the problem of balance

The logic extends beyond theory. Even in everyday life, three-player dynamics are notoriously difficult to manage. A family with three children often experiences more tension than one with two or four. Balance is harder to sustain. In geopolitics, where stakes are existential, the consequences are magnified.

The US, China and the rest of the world are locked into such a configuration. Each move by one actor forces recalibration by the others. Alliances become transactional, trust erodes, and long-term planning gives way to tactical manoeuvring.

What seems certain in an uncertain world

Despite the volatility, some trends appear increasingly clear.

First, there will be an intensified scramble for resources—energy, minerals, technology and supply chains—to keep both capital and labour aligned with national priorities. Second, countries outside the US–China dyad will attempt to build alternative economic and security arrangements. Their success, however, will be constrained by a third certainty: the continued dominance of the US dollar as the world’s reserve and trading currency.

China may nibble at the edges, but displacement of the dollar remains unlikely in the foreseeable future. A fourth certainty lies in technology. Despite Chinese claims, the US retains technological dominance, reinforced by controls that have sharply curtailed technology transfer and theft. China’s capacity for indigenous innovation, without access to global knowledge flows, remains limited.

The fifth certainty is political: a global squeeze on liberal values. The post-Cold War liberal moment now appears, in hindsight, as an aberration rather than a permanent condition. This shift will likely coincide with a contraction in global trade and slower economic integration.

The uncertainty that matters most

Uncertainties, by definition, resist prediction. But one area deserves particular attention: the hidden clauses in bilateral free trade agreements. As multilateralism weakens, power increasingly expresses itself through asymmetric, opaque deals. The real effects of today’s agreements may only become visible years later.

As Trump enters his second year, the question is no longer whether the world will be unstable. It is whether countries can learn to survive—and occasionally thrive—in a three-player game where balance is elusive, certainty is scarce, and disruption is the norm rather than the exception.