Investing.com -- The risk of a fracture within the U.S.-led economic and geopolitical bloc has risen following recent policy shifts by the Trump administration, but the core alliance is likely to endure.
The two key developments, the U.S. decision to pause military aid to Ukraine and the imposition of tariffs on imports from Canada and Mexico alongside increased tariffs on China, prompts such questions. These moves challenge the assumption that Washington continues to distinguish between allies and adversaries
While these tensions could complicate U.S. efforts to rally allies against China, the broader economic costs of a full split within the bloc remain high.
The diversity of the U.S. bloc, which includes commodity producers like Canada, high-end manufacturers such as Japan and Korea, and service-driven economies like the U.K., provides resilience against global economic fragmentation.
Analysts at Capital Economics say strains between the U.S. and its allies will likely intensify, though a fundamental rupture remains unlikely. But warned that the risks of a more serious split are rising.