The period after World War II saw a global order underpinned by multilateral institutions, such as the United Nations and the World Bank. The United States emerged as the dominant force, with the dollar as the world's reserve currency.

The Trump administration appears to be breaking from that order, with foreign and economic policies that have challenged U.S. allies, undercut some multilateral institutions and used tactics such as tariffs.

While it is unclear what will eventually emerge, interviews this month with more than a dozen senior bankers, investors and officials based in Asia showed that they are not waiting to find out. They are looking for an 'America plus 1' strategy, which reduces their reliance on the United States going forward.

This search for an alternative was more urgent and widespread than last May, when I first reported such a conversation after a visit to Asia. Strikingly, no one seems to have found an answer. These people said there may not be a viable alternative to the U.S. market in the foreseeable future.

"We are in a one in 100-year transition," said Ben Hung, President, International at Standard Chartered. Hung believes the world is becoming multipolar, led by the United States, China and India. "The post-World War II order has changed."

Citi told me it was fielding record calls from Asian clients on how to navigate through increased geopolitical uncertainty.

The bank said its flows from clients such as companies in areas, including foreign exchange and hedging, were growing at double digits in many emerging trade corridors, such as those between Asia and the Middle East as well as Latin America. Even so, investments into the United States were also growing.

In response to questions about this view, Kush Desai, a White House spokesperson, pointed to U.S. investment promises by companies like Taiwanese chipmaker TSMC and Dubai property developer DAMAC, saying they "have responded to President Trump's America First economic agenda of tariffs, deregulation, and the unleashing of American energy."

OPENING FOR CHINA

These conversations underscore how Trump's America First push could accelerate changes that were already under way with the growth of China as the world's second-largest economy, in some ways undermining its goals to counter it.

The White House's unprecedented moves across policy areas, such as playing investment banker on the sale of social media app TikTok, are raising questions in the minds of these people about the U.S. rule of law. That, alongside the use of economic sanctions, has foreign investors and companies wishing for alternatives to U.S. assets and the dollar.

One Chinese official said Trump's tariffs against U.S. allies such as Canada and Europe had given Beijing an opening. Trump cannot isolate China with U.S. allies because "his allies are also facing tariffs," the official said, declining to be named to talk candidly about the situation.

Chinese companies have to diversify, reducing their exposure to the United States and increasing it in other parts of the world, from Southeast Asia and the Middle East to Latin America, the official added.

FEW ALTERNATIVES

Despite this search for alternatives, U.S. assets remain attractive, these interviews showed. That's because of the size of the American economy, the depth of its capital markets and the relative strength of its institutions, especially when compared with authoritarian governments elsewhere.

There are also limited choices. Anyone looking for an alternative to the dollar outside the U.S. sphere of influence, for example, has three options: gold, crypto and the yuan. Some of the run-up in gold in recent months is attributed to central banks diversifying away from the dollar.

"None of those three are perfect," Standard Chartered's Hung said.

Any company looking to do transactions in the yuan instead of the dollar, for example, would need instruments to hedge its exposure to it.

Hung said one of the main ways to do so would be through the Hong Kong Exchange’s Swap Connect, which allows investors to trade renminbi interest rate swaps, derivatives that help manage interest rate risk.

Swap Connect grew to 14.9 billion yuan ($2.06 billion) in average daily turnover last year, which is significantly higher than the 3 billion yuan when it was launched in May 2023. Several bankers said any hedging to manage exposure to the yuan from companies transacting in the Chinese currency was marginal.

BLIND SPOTS

Meanwhile, the costs of the fracturing of the world are becoming increasingly clear. It's creating blind spots, something that became apparent when Chinese AI startup DeepSeek surprised investors in January, sending U.S. markets into a tailspin.

While it was impossible to predict DeepSeek's impact on the market, two people in Hong Kong told me that those following China's artificial intelligence sector closely would have likely come across the company.

One Asia-based investor told me he had met with the founder late last year. He added that his firm had seen much less competition from U.S. private equity and venture investors in recent years.

Bonnie Chan, CEO of the Hong Kong bourse operator, said Western investors had hesitated to invest in China after a challenging few years for exits.

"This vintage of sort of the newer companies like DeepSeek probably didn't attract all the crazy courting from the VC and PE guys like the previous batch of companies," Chan said. "And that's why I feel that DeepSeek is just one of the many things which will shock investors around the world."

"There will be more jaw-dropping moments," Chan added.

($1 = 7.2327 Chinese yuan)