As US President-elect Donald Trump prepares his administration’s policy toward China, he should be wary of two major traps that history has set for him. The ‘Thucydides Trap,’ cited by Chinese President Xi Jinping, refers to the warning by the ancient Greek historian that cataclysmic war can erupt if an established power (like the United States) becomes too fearful of a rising power (like China). But Trump also has to worry about the ‘Kindleberger Trap’: a China that seems too weak rather than too strong.

Charles Kindleberger, an intellectual architect of the Marshall Plan who later taught at MIT, argued that the disastrous decade of the 1930s was caused when the US replaced Britain as the largest global power but failed to take on Britain’s role in providing global public goods. The result was the collapse of the global system into depression, genocide, and world war. Today, as China’s power grows, will it help provide global public goods?

In domestic politics, governments produce public goods such as policing or a clean environment, from which all citizens can benefit and none are excluded. At the global level, public goods—such as a stable climate, financial stability, or freedom of the seas—are provided by coalitions led by the largest powers.

Small countries have little incentive to pay for such global public goods. Because their small contributions make little difference to whether they benefit or not, it is rational for them to ride for free. But the largest powers can see the effect and feel the benefit of their contributions. So it is rational for the largest countries to lead. When they do not, global public goods are under-produced. When Britain became too weak to play that role after World War I, an isolationist US continued to be a free rider, with disastrous results.

Some observers worry that as China’s power grows, it will free ride rather than contribute to an international order that it did not create. So far, the record is mixed. China benefits from the United Nations system, where it has a veto in the Security Council. It is now the second-largest funder of UN peacekeeping forces, and it participated in UN programs related to Ebola and climate change.

China has also benefited greatly from multilateral economic institutions like the World Trade Organization, the World Bank, and the International Monetary Fund. In 2015, China launched the Asian Infrastructure Investment Bank, which some saw as an alternative to the World Bank; but the new institution adheres to international rules and cooperates with the World Bank.

On the other hand, China’s rejection of a Permanent Court of Arbitration judgment last year against its territorial claims in the South China Sea raises troublesome questions. Thus far, however, Chinese behavior has sought not to overthrow the liberal world order from which it benefits, but to increase its influence within it. If pressed and isolated by Trump’s policy, however, will China become a disruptive free rider that pushes the world into a Kindleberger Trap?

Trump must also worry about the better-known Thucydides Trap: a China that seems too strong rather than too weak. There is nothing inevitable about this trap, and its effects are often exaggerated. For example, the political scientist Graham Allison has argued that in 12 of 16 cases since 1500 when an established power has confronted a rising power, the result has been a major war.

But these numbers are not accurate, because it is not clear what constitutes a “case.” For example, Britain was the dominant world power in the mid-nineteenth century, but it let Prussia create a powerful new German empire in the heart of the European continent. Of course, Britain did fight Germany a half-century later, in 1914, but should that be counted as one case or two?

World War I was not simply a case of an established Britain responding to a rising Germany. In addition to the rise of Germany, WWI was caused by the fear in Germany of Russia’s growing power, the fear of rising Slavic nationalism in a declining Austria-Hungary, as well as myriad other factors that differed from ancient Greece.

As for current analogies, today’s power gap between the US and China is much greater than that between Germany and Britain in 1914. Metaphors can be useful as general precautions, but they become dangerous when they convey a sense of historical inexorableness.

Even the classical Greek case is not as straightforward as Thucydides made it seem. He claimed that the cause of the second Peloponnesian War was the growth of the power of Athens and the fear it caused in Sparta. But the Yale historian Donald Kagan has shown that Athenian power was in fact not growing. Before the war broke out in 431 BC, the balance of power had begun to stabilise. Athenian policy mistakes made the Spartans think that war might be worth the risk.

Athens’ growth caused the first Peloponnesian War earlier in the century, but then a Thirty-Year Truce doused the fire. Kagan argues that to start the second, disastrous war, a spark needed to land on one of the rare bits of kindling that had not been thoroughly drenched and then continually and vigorously fanned by poor policy choices. In other words, the war was caused not by impersonal forces, but by bad decisions in difficult circumstances.

That is the danger that Trump confronts with China today. He must worry about a China that is simultaneously too weak and too strong. To achieve his objectives, he must avoid the Kindleberger trap as well as the Thucydides trap. But, above all, he must avoid the miscalculations, misperceptions, and rash judgments that plague human history.

I was permitted a point of pride late last year when reports came in that Australia’s decoy rocket, Nulka, diverted a missile attack on the American warship USS Mason off the coast of Yemen. As always, success has a hundred fathers, and credit for the failed missile attack is also being claimed for a couple of fired SM-2s and an evolved Seasparrow. An investigation is underway. The defence industry minister, Christopher Pyne, has no doubt about Australia’s singular role, observing in London recently: ‘A US warship, the USS Mason, was recently attacked while off the coast of Yemen by Houthi rebels with what was believed to be land‑based anti‑ship cruise missiles. Fortunately, the ship was equipped with Australian-made Nulka decoys which were deployed, and the missiles crashed into the sea.’

Nulka is cutting-edge technology and our largest defence export. It’s a product of an exchange I had with the then US Defense Secretary Cap Weinberger in the mid-1980s. Some of it’s told in the Defence Department’s book, Nulka: a compelling story—ingenuity, partnership, perseverance. At the time, I was annoyed by our inability to get the codes for the APG 65 radar on the RAAF’s F-18s. The codes supplied to us could only identify Warsaw Pact aircraft as foes when most of our potential targets were Western-sourced. Further, we were then the second largest arms customer for the US defence industry, with nothing to show on the other side of the ledger.

Before the meeting, the department gave me an extensive briefing paper requesting I sign off the termination of then developmental Project Winnin (now Nulka). I didn’t sign it but it was in my notes carried into the meeting. I started with my whinges. Weinberger interrupted me and said, ‘I am sick of your whining but you never give me something concrete.’ I thought he needed an answer and, as luck would have it, one was to hand. I dragged out the briefing paper and replied, ‘How about this then?’ His advisers were aware of the planned cancellation and showed visible consternation. ‘Done’, he immediately responded. He turned to his alarmed folk and said, ‘Make it happen—no argument.’

Later, at the inaugural meeting of AUSMIN in San Francisco in August 1986, we signed off on an agreement to collaborate on full-scale development of the concept developed by our then Defence Science and Technology Organisation. As well as being in service on our warships, the Nulka system is now deployed on many American vessels and, after the Mason incident, I suspect it’ll appear on more.

At the time, and at that stage of development, Nulka was more symbolic. A lot of work had to be done, particularly on the payload, and largely at the American end. The challenge was to produce a signature more powerful for the homing system of an incoming missile than that registered by the ship which launched it. Nulka became an important symbol for both Australian defence science and Australian defence industry. It was important, too, for the alliance as a two-way street. For me, it assuaged some of the sorrow at the removal of New Zealand from the process of the annual meetings.

It’s now a symbol of something else entirely: the possibilities for advanced Australian manufacturing. Protectionism’s back on the table but our protected industries are either gone or their remaining elements, globally competitive. A protected market of 24 million sitting in a regional market of 3 billion makes no sense for an investor anymore. That horse has bolted, and the gate can’t sensibly be closed.

Our manufacturing future lies in niche products, internationally collaborative enterprises and global supply chains. Nulka ticks all these boxes. As a BAE Systems Australia publication points out, it’s the prime contractor and systems design agent. Lockheed Martin (USA) is the design agent for the electronic warfare payload. Aerojet Inc. (USA) manufactures the rocket motor. BAE Systems builds the flight control hardware in Edinburgh Parks, South Australia, and tests and assembles the system at its Nulka Round Assembly Facility in Mulwala, New South Wales. These are a powerful group of defence manufacturers. As well as being our largest regular defence export program, Nulka is subject to continual development to keep it ahead of emerging countermeasures.

The Nulka story is part of the ballast of our alliance relationship as we seek to influence the direction of president-elect Donald Trump’s policy in our region in particular. The Nulka system will be part of the defences of the new warships ships he plans to construct.

Now’s not an easy time. Our region will want us to spend a great deal of our political capital trying to alter what’s an obvious predilection on the part of the incoming Trump administration to nationalist unilateralism—a direction which may destabilise hopes for peace and prosperity. Six years ago we spent some of that capital influencing the Obama administration, classic American liberal internationalists, to extend that approach to the Asian pivot. They fitted in well, ticking all the boxes Asians demand of their international community—basically, being there and engaging. That’s going to be a lot harder after 20 January.

…the tough get going—trite, perhaps, but appropriate in our current circumstances. 2016 ends in a much darker place than it started. The sense of reluctant resignation with which the year began has morphed into doubt and uncertainty, tinged with a level of global concern that borders on fear.

The refugee pressures on the borders of Europe at the beginning of the year may have abated, but the root problem—the humanitarian disasters attendant upon the civil wars in central and northern Africa and across the Middle East into Afghanistan—has intensified.

The Brexit vote not only initiated what will prove to be a significant decline in Britain’s strategic position in Europe but also, and more dangerously for Europe, encouraged separatists and populists on the left and especially the right to press more actively for the disintegration of the euro and eventually the EU. Russia, in the meantime, is strengthening its position on its southwestern and northwestern borders, and exploiting the political and economic uncertainty that is at the heart of Europe’s woes.

Then along comes President-elect Donald J. Trump with a raft of half-baked policies that are capricious where they are not downright dangerous.

His early foray into foreign policy exhilarated the Taiwanese government and left China’s bemused. Three and a half decades of painstaking diplomacy between the US and China now appears to be on the line, and to what strategic or diplomatic purpose? It’s difficult to see any strategic advantage to the US from challenging the ‘One China’ policy, while the strategic consequences for Japan and South Korea are all on the debit side.

Closer to home, developments in Southeast Asia don’t offer much joy. President Rodrigo Duterte continues to drive The Philippines’ domestic and international policy as if he were at the wheel of a runaway jeepney. The Christian governor of Jakarta, Basuki Tjahaja Purnama, is facing court on charges of blasphemy against Allah. Malaysia continues to embed the kleptocratic authoritarianism of its Prime Minister, and Thailand contemplates a range of constitutional uncertainties following the death of King Bhumibol. And all the while, PNG teeters on the brink of political and economic collapse.

With so many of its basic assumptions overturned by events, Australia’s much-vaunted 2016 Defence White Paper is now dead in the water. The strategic fault lines in the Asia–Pacific region, to which I drew attention in an earlier post, are even more apparent than they were in February 2016. Events have also rendered the force structure changes minimalist, which will demand yet another review of the Defence Capability Plan. Given the precedents, that will take years.

But the gloomy entry to 2017 offers some surprising opportunities to the Australian government.

The best way to deal with doubt and uncertainty is to establish a plan and chart a course, establishing a measure of ambition to which others need to respond. For Australia to set down some policy markers, and, of course, the plans to implement them, would be a positive contribution to regional security and to the efforts of our neighbours to act in the collective interest in confusing times.

The forthcoming Foreign Affairs White Paper is a timely chance to do this.

The first policy marker it might consider is a structured regional approach to refugees, a policy issue that successive governments have handled abominably. Our international reputation for compassion and fairness has been trashed. Australia’s approach has been to incarcerate, without any respect to either the ancient principle of habeas corpus or humanitarian law, the victims of the criminals who conned them onto unsafe boats and simultaneously exploited their desperation and their hope. And our policy annihilates the latter. At its simplest, the regional refugee problem can’t be resolved unless the refugees’ problems are resolved.

A second policy marker that might lend additional credibility to a regional refugee initiative would be a concerted effort, with like-minded countries, to bring about negotiated settlements to the various civil wars that are the basic causes of the global refugee flows. Such action would certainly support Australia’s bid for membership of the Human Rights Council, though it would demand a decidedly more nuanced approach to our own involvement in Iraq and Afghanistan, and a diplomatic rather than military approach to generating a settlement in Syria. Quite simply, ISIS is a symptom of the problem in Syria, not the cause of it.

A third policy marker that might contribute substantially to reducing regional tension is a carefully designed and articulated co-management and co-development mechanism that would bring the various South China Sea claimants to the negotiating table. To have any credibility in this, Australia might need to adopt a more cooperative and reasonable approach to East Timor’s claims to the Greater Sunrise gas fields, rather than await a determination by the Permanent Court of Arbitration.

A fourth initiative, given President-elect Trump’s intention to quash the Trans-Pacific Partnership, would be to press for an Asia–Pacific Free Trade Agreement—hopefully including the US—to mitigate the threat of trade wars resulting from resurgent protectionism. Australia’s economic outlook is even gloomier without an open regional trading system.

And, finally, the uncertainty surrounding future US engagement with Asia is the elephant in the room. DFAT’s White Paper should consider the pressing need for an Asia–Pacific security cooperation forum that looks at both security and cooperation in the broad. Such a body would both mitigate the consequences of US disengagement (if that were to occur) while simultaneously providing the US with a new avenue for regional participation. Perhaps the Foreign Affairs White Paper could consider building on an association such as The Council for Security Cooperation in the Asia Pacific (CSCAP) to establish a new type of integrated consultative mechanism that is less a hybrid ‘one and a half track’ dialogue than a way of investing whole-of-nation expertise in maintaining long-term regional security and prosperity.

Let’s hope that the forthcoming White Paper is able to transcend motherhood statements and provide some transformational regional leadership.

US allies around the globe have begun to contemplate a future in which America plays a more restrained role. Here in Australia, we’re acutely conscious of the recent surge of interest in the future of ANZUS. But media reports also tell of a sudden interest among some German commentators in the possibility of an independent European nuclear arsenal, or even an indigenous German one. And northeast Asian allies are contemplating both possible reductions in US forces stationed in their countries and the withdrawal of the US nuclear umbrella.

In short, US assurance policies are struggling. To see why, let’s step back to think about what assurance is. It’s the confidence that an ally will provide assistance when serious national interests are threatened. So there are two factors that contribute to that level of confidence: the assuring state’s capability to provide actual assistance, and its resolve to do so when needed. If we wanted to represent assurance as a mathematical equation, it would be written as A = C x R, (Assurance equals Capabilities multiplied by Resolve). The equation is one of multiplication rather than addition because if either of the variables is zero, so is assurance.

Of course, assurance—like deterrence—is in the eye of the beholder. And typically the beholder’s interested not merely in some level of capability, but in a margin of superiority over a potential adversary. Similarly, the beholder’s interested not merely in some level of resolve, but in that level of resolve which suggests that vital national interests can be safely entrusted to the hands of a foreign power. So we might rewrite the equation as A = PMC x PHR (Assurance equals the Perceived Margin of Capability multiplied by Perceived High-level Resolve).

And here’s where the problems start to become clearer. As other great powers have risen, and are developing and modernising their military capabilities and unfolding anti-access and area denial plans for their immediate environs, it’s become harder for the US to retail a story about its margin of capability over potential adversaries. Over the past decade the need to tell that story has forced the US into its Air-Sea Battle doctrine and, subsequently, the Third Offset. Neither are especially convincing, so on the capabilities side of the equation the overall assessment is one of relative US slippage. The upshot is that US allies proximate to potentially hostile great powers are more anxious about Washington’s ability to save them.

There’s a particular wrinkle on that side of the equation in relation to nuclear weapons. The American determination to decrease the profile of nuclear weapons in its own strategic posture has increased anxieties among its allies covered by the US nuclear umbrella. That’s because the margin of conventional superiority of US forces seems to be narrowing over time, as other great powers modernise their militaries. But it’s also because some traditionally-constrained actors, like North Korea, are moving closer to a point where they could use nuclear weapons against the US homeland if Washington was to intervene on its ally’s behalf. (That’s one factor driving US and allied interest in ballistic missile defences.)

So, the capabilities factor of the equation has its problems. But with Donald Trump’s election as US president, we now have a new bout of allied anxiety about the resolve factor as well. Trump campaigned on the notion of ‘America first’. He weakened US declaratory policy about alliances, portraying US commitments as optional, and depicting security partnerships as protection rackets. He ruminated about whether it might be better for Japan and South Korea to build their own nuclear weapons, rather than rely upon US extended nuclear deterrence. Nationalism and unilateralism trumped internationalism and consultation.

So allies now worry not only about a shrinking margin of US capability, but also about the US commitment to protect their vital interests in a world of contested multipolarity. And that’s driving those allies to consider a range of strategic options that weren’t even on the table in earlier days.

Is there a path back to the earlier condition of robust assurance? Possibly, but the incoming administration’s going to have its work cut out on both factors in the assurance equation. Restoring US declaratory policy probably involves telling a new ordering story about the US role in the world during an age of contested multipolarity and domestic priorities. That’s a big ask. Restoring a US margin of capability over potential adversaries might be an even bigger one.

The obvious answer is that US allies are going to have to bring more to the party, and to depend less upon Washington to safeguard their interests. Their doing so would help to encourage the US to stick around—after all, assurance is a two-way street. But a set of gamechanger strategic policies in Asia might well lie down that path.. We should brace ourselves for a roller-coaster rise ahead.

Since Donald Trump’s victory in the US presidential election last month, the volume of discussion about Australia’s relationship with the US and our region has increased sharply. Politicians, officials, think-tankers and journalists have all weighed in. Much of the debate has turned upon the future status of the ANZUS treaty, with the Prime Minister keen to paint Senator Penny Wong’s thoughtful op-ed piece as a breakdown of the previously bipartisan commitment to the alliance. Meanwhile, Paul Keating has argued that Australia should put an end to its ‘tag-along foreign policy’—although the alliance’s defenders say that no such subordination is involved.

I’d like to move the discussion to a more abstract level, by canvassing what Australia wants in terms of grand strategic outcomes. Too often that question goes unasked. At least since the days of Coral Bell’s book, Dependent Ally, commentators have leapt to the conclusion that Australia deliberately wallows in a comfortable dependency. In the final analysis, though, we’re not a member of ANZUS because of a blind attachment to great powers. We’re in the alliance for strategic reasons. ANZUS ties us not simply to the region’s predominant military power but to its predominant order-builder.

And that matters because what Australia wants is a stable, liberal, prosperous order in Asia. It’s drawn to Washington because the US has been the principal architect of such an order. Indeed, among the existing great powers, the US has played a unique order-building role. Russia’s too Eurocentric to shape the Asian security environment; Japan’s been—since World War 2—too withdrawn to articulate an independent strategic agenda; China seems to want a return to the Sinocentric Asia (and deferential neighbours) of yesteryear; and India’s been too under-developed and too geographically remote from the Asia–Pacific’s centre of gravity to do much order-building.

So, ANZUS is our link to the order-builder. But it’s only our link. The regional order doesn’t run solely through ANZUS. Indeed, we’re merely the distant southern anchor of US alliance commitments in a region where the large, lumpy bits of power—and the key strategic relationships—are still found in the northern hemisphere. Moreover, our alliance is exceptionally close. It’s built on ties of blood and culture, and not just shared interest. As far as we know, Trump likes Australia. So it’s entirely possible that the ANZUS alliance will survive, but that the broader regional order—what Ron Huisken calls the ‘confidence that tomorrow is going to be very much like today’—won’t.

And that would be bad news for Australia. In some ways the order’s more important to us than the alliance. Just as a thought experiment, think about which one’s more expendable. An Asia that’s stable, liberal and prosperous, but in which ANZUS doesn’t exist, is probably preferable to one that’s unstable, authoritarian, and poor, but in which ANZUS does exist. I’m not saying we should be indifferent to ANZUS’s future. Obviously we’d prefer to keep the alliance around, both as a mechanism for order-building in good times and a security guarantor in bad. Still, if the thought experiment’s right, we need to think about looming geopolitical discontinuities in the broad rather than the narrow. The central question shouldn’t be whether Donald Trump likes Skippy.

Let’s turn, then, to those broader discontinuities. Japan’s security policy has long been a subset of Washington’s, which means that Japanese policymakers have typically been more sensitive than their Australian counterparts to the potential marginalisation of their strategic interests in Washington. It’s no surprise that Prime Minister Abe was the first foreign leader to meet with Trump—Abe’s actions speak louder than his words in signalling Tokyo’s high-level strategic concern about Trump’s nationalism and unilateralism.

South Korea’s harder to read, because its president has been fighting for her political life. But North Korea’s pushing ahead with its nuclear arsenal and President Obama’s policy of ‘strategic patience’ is all but dead in the water. So Trump’s campaign ruminations about the possibility of both South Korea and Japan building their own nuclear weapons can only have magnified Seoul’s concerns that Washington’s increasingly sensitive to the potentially costly contests associated with extended nuclear deterrence in Northeast Asia. Putting the judgment in its starkest form, I think the prospects for nuclear proliferation in Northeast Asia are higher now than they’ve ever been.

Worries about the future are most intense in Northeast Asia, but are felt elsewhere as well. Since the days of the Vietnam War, Southeast Asia has become accustomed to being a second-order priority in Washington. The Obama administration, articulating a policy of rebalancing not only to Asia but within it, had begun to shift that perception. But the subregion must now wonder again about its relative priority on Washington’s agenda. What’s worse, that uncertainty’s increasing at a time when China’s maintaining its assertive posture in the South China Sea.

By all means, Canberra should be talking to the incoming administration about the ANZUS relationship. But we shouldn’t be fooled into thinking that’s our sole, or even our primary, concern. Our grand strategic objective is a stable, liberal, prosperous order in Asia. What we need to think about is how to achieve that objective in a more uncertain future, especially if the lynch-pin of the current order fails in Northeast Asia.