Bi-Weekly Geopolitical Report – US Influence on the Wane: New Evidence (September 29, 2025)
by Patrick Fearon-Hernandez, CFA | PDF
World history goes through phases, not as a cycle of recurring situations but as a series of “regimes” or broad sets of trends and relationships. Each regime is complex, since it encompasses issues such as the political landscape in various countries, the dominant global approach to economic policy and trade relationships, the structure and operation of security alliances, and even cultural norms. The most recent regime was the post-Cold War period of globalization that ended around 2008. Since each regime is so complex, and its elements or facets can change at a different pace, it can be hard to know for sure that a transition is taking place. It can be even harder to know what the new, following regime will look like.
Importantly, several major developments over the last few months have confirmed that the world is still transitioning away from the Globalization period. These developments have also provided added evidence about what to expect during the incoming regime of Global Fracturing or, potentially, Chinese Hegemony. As shown in this report, one key message is that the US continues to lose influence in international affairs as it steps back from its traditional role as global hegemon. Recent evidence of this includes the latest United States-China trade talks, the Russian drone incursions in Poland and Romania, and Israel’s attack on Hamas officials in Qatar. These developments are in line with other examples in recent years, such as the Obama administration’s decision not to enforce its “red line” against Syria’s use of chemical weapons in its civil war and the Biden administration’s chaotic withdrawal of US forces from Afghanistan. In this report, we discuss the latest developments and outline how they might affect financial markets going forward.