One vision in particular from the Atlantic Charter—free trade—changed everything and became central to the post-WWII world order.

The United States, the most powerful country in the world, has been turning autocratic, marking a turning point away from its role promoting democracy for decades.

In the decades of growing trade after WWII, there was a general perception that life was getting better—people lived longer, the world became more peaceful, and democracy rose, especially after the Soviet Union collapsed.

On paper, the chaos unleashed by Trump's tariffs is exactly when a multilateral institution would ordinarily step in, but without reform it's an impossible task.

The balance of power on the world stage has been quietly shifting for decades, enabling the rise of authoritarian leaders and the decline of liberalism, driven more by economics than politics.

The Atlantic Charter signed in August 1941 by Franklin D. Roosevelt and Winston Churchill outlined four core principles for the post-WWII world: no country should seek territory beyond its borders, democracy should prevail, nations should trade freely, and hostile countries should disarm.

Brexit supporters framed the EU as a shackling force that was stifling British independence, speaking of sovereignty as the primary motivation for leaving.

The multilateral institutions created after WWII—the World Bank, IMF, General Agreement on Tariffs and Trade (GATT, later WTO), and the European Coal and Steel Community—represented two distinct poles: the American democratic West and Soviet-led autocracies, creating a bipolar political and military world.

The expectation that free trade would lead to democracy has not materialized in China—since Xi Jinping came to power in 2012, term limits have been abolished, Xi's thoughts have been enshrined in the constitution, state surveillance has increased, and descent has been repressed, all during rapid economic development.

When the Soviet Union collapsed in 1991, the world became unipolar with the United States of America as the sole big power and leader of the institutions it had created.

The World Bank initially offered loans that helped European countries rebuild after WWII, the IMF focused on stabilizing the financial system with currencies pegged to the US dollar tied to gold, and GATT/WTO enhanced trade by removing business barriers and introducing common rules.

Because the IMF, World Bank, and WTO were effectively American-led, the dollar emerged as the world's dominant currency, giving the US two major advantages: the ability to borrow money more cheaply than other countries, and the power to impose financial sanctions and play a policing role on the world stage.

The global trade war currently unfolding is putting at risk both of the US's primary advantages from the liberal world order: cheap borrowing and the power to impose financial sanctions.

In the decades after WWII, international trade rose rapidly, with the US representing around 40% of global GDP by 1960, while hugely populous countries like China and India made up only tiny fractions of the global economy.

The US and its allies assumed that freer trade meant freer societies, a core assumption that continued to gain ground and was reinforced by the apparent success of the post-WWII model.

The European Union was formed in 1993 with a single market and later a common currency, designed to make trade even more seamless, and in the 1990s and early 2000s trade continued to expand faster than before in what was called hyper-globalization.

China sought WTO membership motivated partly by prestige—for an emerging economy, membership in a powerful international body offered credibility—and partly by protection from unfair trade practices.

In 2001, China joined the WTO. A year earlier, US President Bill Clinton gave an address saying the agreement was a one-way street requiring China to open its markets while the US maintained present access, and that by joining the WTO China would agree to import democracy's most cherished value—economic freedom—which would lead Chinese people to demand greater political say.

After joining the WTO, China's economy became really powerful really fast—by some measures (purchasing power parity), it already overtaken the United States as the world's largest economy.

China's continued reliance on the US dollar for trade reflects that the world's institutions are operating within a system created in a radically different economic landscape, making the arrangement outdated.