The United States remains a central actor in a dynamic, multipolar world. Since World War II’s “Pax Americana” (when the US underpinned global order) , American leadership has shaped international security, trade and institutions. In the past five years, however, new challenges have emerged – Russia’s war on Ukraine, China’s rise, regional conflicts, and a global pandemic – that have tested and reoriented US relations. Nonetheless, the US continues to rally allies, forge partnerships, and invest in innovation to tackle these challenges. Below, we analyze key domains of US engagement, highlighting recent trends and shifts, with relevant data and sources.
Military Alliances and Strategic Rivalries
NATO and European security. NATO remains “the preeminent security Alliance,” providing a force-multiplier for members’ defense . Allied members have dramatically increased spending: 2024 NATO-wide defense outlays hit $1.506 trillion (55% of global spending) , with the US alone budgeting $997 billion (37% of world total). Germany’s spending jumped 28% to $88.5 billion , making it the top European spender. Finland and Sweden joined NATO, and 18 of 32 members met the 2%-of-GDP guideline for the first time . However, NATO recognizes new threats from Russia and China and the need to adapt: it calls for a “global perspective” despite not being a global alliance . The war in Ukraine has reinforced US-EU unity, but also raised questions about burden-sharing (many NATO members have pledged to raise spending further by 2035).
Russia. Moscow’s invasion of Ukraine (2022–present) has sharply escalated tensions. Russia’s 2024 military budget surged ~38% to $149 billion , forcing a Western response. The US and NATO have armed and funded Ukraine at record levels, imposed historic sanctions on Russia, and expanded NATO’s eastern flank. This rivalry remains a top strategic concern, with US policy focusing on deterring further Russian aggression and supporting Ukrainian sovereignty.
China and Indo-Pacific. China is America’s chief strategic competitor. In 2024 China spent $314 billion on its military (7% growth) , pursuing force projection and regional influence. In response, the US has “re-energized” its Asian alliances : it has strengthened bilateral treaties with Japan, South Korea and the Philippines; deepened ties with India (now a “Comprehensive Global Strategic Partnership”); and built new trilaterals like the Quad (US-Japan-India-Australia) and AUKUS (US-UK-Australia) for Indo-Pacific security. US naval patrols and joint exercises in the South China Sea and Taiwan Strait underscore this competition. The Biden administration’s strategy (and similar plans under the Trump-Harris transition) emphasizes deterring Chinese expansion while engaging Asian partners, reflecting what Brookings analysts call a “renewal” of US alliances in Asia .
Middle East alliances. The US maintains long-standing ties with Israel and Gulf Arab states. It provides Israel with advanced military support and works with Saudi Arabia, the UAE and Egypt on counterterrorism, oil-market stability, and arms sales. Conversely, Iran remains a regional rival. US policy has oscillated between attempting a nuclear deal (JCPOA) and imposing sanctions to curb Iran’s nuclear ambitions and regional influence. Recent Middle East conflicts (the 2023 Hamas-Israel war, Houthi attacks in Yemen, Iran-backed militias in Iraq/Lebanon) have kept US policy reactive; analysts note that Washington’s approach has struggled to achieve its goals . Even so, the US continues shuttle diplomacy to prevent wider war and negotiate ceasefires.
Other partnerships. Beyond these big rivals, the US has security pacts worldwide: with North Atlantic allies (NATO), East Asian allies (ROK, Japan, Australia, New Zealand), and with select Latin American (Colombia, Brazil) or African governments through training missions and intelligence-sharing. New “minilateral” forums (e.g. US-Japan-India, US-Korea-Japan) and international coalitions (anti-ISIS, drug interdiction) reflect diversified US alliance structures. Overall, US military alliances are strengthening in response to threats, but also being adapted to focus on emerging challenges (cyber, space, hybrid warfare) and to ensure allies invest more in their own defense.
Table 1. Leading Military Expenditures (2024)
Country
Military Spending (2024, USD billions)
United States
997
China
314
Russia
149
Germany
88.5
India
86.1
Sources: SIPRI 2025 yearbook data .
Trade Relationships and Economic Competition
North America (USMCA). The United States, Mexico and Canada remain deeply integrated. Under the USMCA (in force since 2020) US-Mexico-Canada goods and services trade totaled about $1.8 trillion in 2022 . In 2023, Mexico and Canada were the US’s top two trading partners (Mexico $798B, Canada $773B in combined imports/exports) . These ties support manufacturing, energy and food supply chains. The USMCA reaffirmed many NAFTA rules (including labor and environmental standards), making North America one of the most closely linked economic regions.
US-China trade rivalry. China is America’s third-largest trading partner ($575 billion total trade in 2023 ), but the relationship is fraught. After a trade war of tariffs and quotas (2018–2020), the Biden administration has largely maintained existing tariffs on Chinese goods and imposed new restrictions on technology exports (chips, AI hardware). US policymakers cite unfair practices (IP theft, subsidies) in keeping a tough stance. Both countries also compete globally: China’s Belt & Road infrastructure deals expand its export markets, while the US pushes allies to diversify supply chains (see Technology below). Despite tensions, cooperation on issues like climate change and global health continues sporadically.
US-EU (Transatlantic). The US and EU comprise the world’s largest trade-investment relationship . The US is the EU’s single largest trade partner (20% of EU exports, 2023) and the prime destination for EU investment . Conversely, EU firms and governments hold over half of total foreign direct investment in the US. These economic ties are a foundation for cooperation. The US has become a key energy supplier to Europe: after Russia’s invasion of Ukraine, about half of Europe’s LNG imports came from the US , helping to diversify away from Russian gas. At the same time, the transatlantic partners occasionally clash: unresolved disputes remain over aircraft subsidies (Airbus vs Boeing), steel/aluminum tariffs, digital-services taxes, and potential car tariffs. Both sides have established a Trade and Technology Council to manage issues like technology standards and critical supply chains. Analysts note that even as the US administration avoids new tariff fights, past conflicts could resurface (especially under a different US leadership) .
Latin America and the Caribbean. The US retains strong economic links in North America, but its influence in Latin America has been challenged by China. China-Latin America trade hit a record $518 billion in 2024 , making China the largest trading partner for much of South America. Chinese banks and companies have financed highways, ports and energy projects across the region. The US remains a major partner (e.g. USMCA with Mexico, aid and trade programs in Central America), but Latin American governments now often balance ties between Washington and Beijing. The US has responded by emphasizing investment (e.g. digital/economic development funds) and governance support, but Beijing’s expanding presence is an ongoing rivalry in the Western Hemisphere.
Global trade leadership. The US is a leading proponent of open trade, but recent years saw a shift. It withdrew from the Trans-Pacific Partnership (TPP) in 2017 (it rejoined a year later as the CPTPP partners without the US). It has not joined other Asia-Pacific trade deals, instead favoring bilateral or minilateral approaches. The US pushes for reformed World Trade Organization rules (on subsidies and state-owned enterprises) and has warned of tariffs if other countries do not open markets (“America First” rhetoric). In sum, US economic competition involves defending its high-tech industries and jobs, negotiating at forums (G7, G20) and trade bodies, and leveraging its market size, while also countering mercantilist policies by rivals.
Table 2. Top US Trading Partners (2023, goods & services)
Country
Total Trade with US (2023, USD billions)
Mexico
798
Canada
773
China
575
Germany
159
Japan
147
Sources: U.S. trade data (goods + services) from USAFacts .
Diplomatic Relations and Influence
Multilateral institutions. The US remains a permanent member of the UN Security Council and a major funder of international organizations (NATO, World Bank, IMF, WHO, etc.). It often uses these platforms to promote human rights, trade norms, and collective security (for example, proposing UN sanctions on North Korea and Iran). US leadership in multilateral climate diplomacy was reaffirmed by rejoining the Paris Agreement in 2021 and hosting successive COP climate summits. However, it now contends with alternative power blocs: China and Russia have expanded the BRICS group (adding new members in 2024/25) and created parallel institutions (e.g. BRICS Bank, separate climate summits), signaling a more contested global order.
Bilateral and regional diplomacy. The US actively pursues bilateral and regional negotiations. It has reinvigorated forums like the Quad leader meetings, APEC summits, and US-EU Trade & Tech Council. The US also brokered normalization (2020–21 Abraham Accords) between Israel and some Arab states. In Asia, it led new economic talks such as the Indo-Pacific Economic Framework. In Latin America and Africa, Washington holds summits and provides development aid to build partnerships. Across all these, US diplomats emphasize shared values and “democracy vs. authoritarianism,” appealing to a rules-based order.
Soft power and aid. The United States is the world’s single largest donor of official development assistance. In 2023–24 it provided the most foreign aid in absolute terms, with about $63.3 billion in ODA in 2024 . This aid goes to global health programs, humanitarian crises, climate projects, and economic development in the developing world. Such assistance undergirds US influence by fostering goodwill and partnerships. Even so, as a share of GDP (0.22%) the US lagged its 0.7% OECD target . Nonetheless, US development and democracy-building initiatives (e.g. PEPFAR, MCC grants, election support) remain important levers of diplomatic influence.
Emerging forums and issues. The US also engages in newer multilateral frameworks: G7/G20 economic coordination, the Indo-Pacific and Quad dialogues, and cyber/nuclear security summits. It has joined efforts on global health (COVAX, WHO reforms) and space (Artemis Accords for lunar exploration). On governance, US officials work with OECD, G7, and UN bodies to set digital and tech standards (see below) and promote anti-corruption. In short, US diplomatic influence is exercised through a mix of old institutions and new “mini-lateral” partnerships, aiming to shape international norms even as competing powers push different agendas.
Technology and Cyber Domains
AI and advanced tech. The US and China are at the forefront of the global artificial intelligence race. US tech giants and startups attracted roughly $109.1 billion in AI-related investment in 2024 . The US government has issued AI strategy documents, and is coordinating with allies on research and safety standards. International bodies (OECD, EU, UN, African Union, etc.) have released AI governance principles emphasizing transparency and ethics in the past year , reflecting US leadership in the conversation. The rivalry drives national policies: for example, both the US and China have enacted export controls on semiconductors and AI chips to protect security-sensitive industries.
5G and cybersecurity. A key flashpoint has been telecommunications security. The US viewed Huawei (China’s 5G telecom giant) as a national security threat, and in recent years the US, Australia, Japan and other allies “effectively banned Huawei from building their 5G networks” . This demonstrates how tech standards have become a geopolitical issue. At the same time, cybersecurity remains a major concern: the US has accused adversaries (Russia, China, Iran, North Korea) of sponsoring ransomware and cyber-espionage. Washington pushes for norms in cyberspace (e.g. via UN or bilateral pacts) and has improved domestic cyber defenses (executive orders on cyber), but threats to critical infrastructure and elections persist.
Semiconductors and supply chains. After the 2020–21 chip shortages, the US enacted the CHIPS and Science Act (2022) to onshore semiconductor manufacturing. This reflects a broader tech competition: the US and its allies (Japan, EU, Taiwan) are collaborating on new chip facilities to reduce dependence on China, while restricting China’s access to cutting-edge chips. Similarly, the US leads efforts to diversify other critical supply chains (rare earth minerals, batteries) through trade pacts and investment incentives.
Overall, technology rivalry is intensifying economic competition. Nonetheless, the US often frames tech as a domain for cooperation: it invites allies to joint research (Open RAN 5G labs, 6G testbeds) and collaborates on emerging fields (space, biotech) with partners. The message is that American leadership in innovation – grounded in large private investment – can offer shared benefits even amid great-power competition.
Energy Geopolitics
Oil and gas. Although the US has become a major energy producer (thanks to shale oil/gas) and even achieved net energy-exporter status by 2019, oil markets still have global interdependence. The US maintains strategic petroleum reserves (SPR) and consults allies on production policies. The 2022–24 surge in oil prices – driven by Russia’s war and OPEC+ cuts – showed US leverage but also limits: Washington urged Saudi Arabia (OPEC leader) to pump more, while Europeans turned to US LNG. Indeed, following Russia’s invasion of Ukraine, the US became Europe’s largest supplier of liquefied natural gas (now ~50% of EU LNG imports) . This illustrates how the US uses its energy exports as a tool of diplomacy, even as it tries to moderate global price shocks at home.
Renewables and climate. A defining trend is the global energy transition. The US under President Biden has pushed aggressively toward renewables: the 2022 Inflation Reduction Act earmarked hundreds of billions for clean energy (EVs, wind, solar, batteries) and declared a goal of net-zero electricity by 2035. Analysts highlight the underlying rationale: about 37% of world primary energy is imported fossil fuels, costing $1.8 trillion annually . By contrast, electrification via renewables (EVs, heat pumps, solar/wind) could cut 70% of those imports , saving $1.3 trillion. These findings explain why the US is promoting green investment both at home and abroad (through climate finance pledges, technology sharing, etc.). In diplomacy, energy often ties to climate: US-Japan and US-EU meetings now routinely include clean energy partnerships, and the US supports ambitious targets at COP climate summits.
Global markets and strategy. US policy also navigates supply disputes. It has imposed sanctions on Iran’s oil and resisted Venezuela’s oil sector as Iran and Russia have sought new customers. In contrast, the US engaged diplomatically with Gulf producers (e.g. persuading Saudi Arabia to maintain output in late 2022) to stabilize markets. Long-term, Washington sees clean energy leadership (solar, batteries, hydrogen) as both an economic opportunity and a strategic hedge. For example, the US is working with Australia on hydrogen technology and with Europe on offshore wind. The broader pattern is a dual strategy: use oil/gas exports to strengthen alliances now, while championing renewables to reduce future vulnerabilities.
Key Regional Theaters
Middle East
In the Middle East, the US combines force and diplomacy to counter its rivals. America’s unwavering ally remains Israel; the US provides it with advanced weapons and vetoes (or threatens to veto) UN actions unfavorable to Israel. The US also maintains security pacts with Gulf countries (Saudi Arabia, UAE, Qatar, Egypt) – selling arms, sharing intelligence, and coordinating on issues like Iran and Yemen. At the same time, Iran poses a persistent challenge. US attempts to revive the Iran nuclear deal stalled as Iran expanded its nuclear program and regional influence. The war between Israel and Hamas (Oct 2023) drew immediate US attention, with the administration articulating goals to support Israel’s security and a cease-fire . Observers at the Middle East Institute lament that US policy has often been reactive, struggling to convert statements into lasting solutions . Nonetheless, the US continues shuttle diplomacy (involving Qatar, Egypt, UN envoys) to broker truces and aid. Military-wise, the US retains bases in Iraq and Syria to fight ISIS remnants and counter Iranian proxies. (For example, analysts note that Iran, Israel-Palestine, and Yemen’s Houthis are “the three major unresolved variables” in the region, with US strategy often lacking coherent focus .)
Indo-Pacific
The Indo-Pacific region is now a central strategic focus. The US has reinvigorated its “Pivot to Asia”: it has stationed more troops and ships in Japan and Guam, conducted freedom-of-navigation operations in contested waters, and sold advanced arms to Taiwan, Japan and South Korea. New alliances reflect this shift. AUKUS (established 2021) commits the US and UK to help Australia build nuclear-powered submarines – a major step countering China’s naval rise. The Quadrilateral Security Dialogue (Quad) of the US, Japan, India and Australia now meets regularly and has begun cooperating on infrastructure and vaccines. Biden also welcomed India into a US-led tech alliance (the “Indo-Pacific Partnership”). These ties underline US commitment to regional balance. Meanwhile, China’s actions in the South China Sea and around Taiwan have escalated tensions. In response, US warships (Carrier Strike Groups) patrol the region routinely. A Brookings report concludes that under Biden the US alliances in Asia have experienced a “renewal” with strengthened ties and cross-regional networking (e.g., linking NATO and Pacific allies) .
Europe
Europe remains a bedrock of US security policy. The Russia-Ukraine war has galvanized NATO, with Europe taking on a larger share of defense. The US has been at the forefront of Western sanctions on Russia and has supplied Ukraine with weapons, training, and economic aid. This transatlantic unity contrasts with a decade earlier, illustrating a major shift: European leaders now regularly consult Washington on Ukraine and defense. The US also supports European energy security: as noted above, by late 2023 American LNG met roughly half of Europe’s needs . In trade and diplomacy, the US and EU coordinate on China policy and uphold shared values. The Biden administration has delayed long-running trade disputes (like steel tariffs), preferring dialogue (via the US-EU Trade and Technology Council) to resolution. Overall, the US-Europe relationship is one of the strongest bonds: both sides are each other’s largest economic partner and cooperated closely on sanctions and defense during the Ukraine war.
Latin America
In Latin America, US influence is mixed. The US continues deep engagement in North America (USMCA integration, major immigrant diaspora ties) . It has also supported democracies in Central America and engaged with South American nations on climate and trade. However, China’s footprint has expanded rapidly: besides the aforementioned $518B trade, China has offered development loans (for example, at a 2025 Celac summit China pledged $9 billion for regional projects), challenging US leadership in the region. The US government has tried to respond by highlighting alternatives – for instance, initiating joint clean-energy or digital projects and emphasizing support for democratic governance – but many Latin leaders now juggle relationships with Beijing, Washington and Moscow. Data point: Mexico and Canada, under the new USMCA pact, still dominate US hemispheric trade (~$1.8T), anchoring the US economy in its “near abroad” . Elsewhere (Brazil, Argentina, etc.), Chinese investment can rival or exceed US.
Africa
Our search found little detailed analysis of US-Africa dynamics in the past five years. In general, the US continues partnerships with some African countries on counterterrorism (in the Sahel and Horn of Africa), health (PEPFAR HIV/AIDS programs), and governance (investment funds, Summit for Democracy). However, African nations increasingly engage with China, which invests heavily in infrastructure and resource projects across the continent. Observers note that most African countries now export more to China than to the US, reflecting China’s influence. The US has attempted to revitalize ties (e.g. the 2022 US-Africa Leaders Summit), but it remains a work in progress. (Connected sources did not provide new specific data on this topic, highlighting a gap in recent public analyses.)
Despite challenges in each region, the overall trend is one of robust American engagement: reinforcing alliances where tensions have risen, pursuing new partnerships where influence can grow, and deploying diplomacy and aid to build goodwill.
Summary Outlook
In summary, the past five years have seen the United States and its partners adapt to a more complex world. New strategic alignments (like AUKUS, Quad) and revitalized old ones (NATO, US-Japan/Korea, US-EU) indicate a collective response to common challenges. Trade and technology are battlegrounds of competition but also opportunities for cooperation (e.g., joint R&D, regulatory coordination). Energy and climate diplomacy are driving a historic shift: the US is not only an energy exporter to allies but also a leader in the green transition (driven by analyses suggesting renewables could slash global oil dependence ).
Looking ahead with an upbeat outlook, many analysts see reason for optimism. For example, global investments in clean energy, AI, and infrastructure – often led or partnered by US interests – are creating economic growth and forging interdependencies that can reduce conflict. International institutions, though strained, have achieved milestones (for instance, G7 commitments on Ukraine and climate, IMF support for pandemic recovery). Moreover, public opinion in many countries remains broadly favorable to cooperation with the US on shared challenges like pandemics and cybercrime.
In short, the US continues to leverage its alliances, economic power, and innovative capacity to shape global affairs. By prioritizing partnerships (military and economic), leading on global issues (climate, health, technology), and upholding core values, the United States seeks to maintain a secure and prosperous world – an objective shared by many nations today. As the 21st century progresses, the ongoing US-led collaborations and competitive engagements alike will shape a more connected, resilient global order.
Sources: Official data and expert analyses from SIPRI, CSIS, OECD, CFR, MEI, and other think tanks and media (see citations) inform this assessment of contemporary US geopolitics .