| Jonathan Ping | Umair Ghori |
The shift from liberal hegemony to U.S. transactionalism presents new opportunities for middle powers to engage in ‘niche diplomacy’, where countries like Australia and Pakistan pursue limited foreign policy goals that reflect their capabilities.
Under liberal hegemony, the United States promoted globalisation, democracy, capitalism, human rights, the rule of law and multilateralism. In contrast, the ‘America First’ doctrine, emphasising protectionism, bilateralism, transactional diplomacy and selective engagement, has sidelined multilateral institutions and liberal norms.
This shift is altering the role of middle powers. It challenges longstanding views of these states as actors focused primarily on multilateral solutions, compromise and global citizenship. Instead, some middle powers are adapting by blending domestic policy traditions with opportunities presented by global power shifts, pursuing niche diplomacy in less conventional areas.
Australia and Pakistan exemplify this hybrid model. Australia is expanding its hard power by acquiring nuclear submarines through AUKUS, while also taking a firm diplomatic stance against Chinese revisionism. Pakistan, long oscillating between small and middle power status, has demonstrated increased regional influence, particularly in the Middle East and South Asia. Pakistan’s role as a regional security provider, evident in its support for Saudi Arabia following Israeli airstrikes on Qatar, signals a departure from its previous marginalisation under liberal hegemony.
Australia under Prime Minister Anthony Albanese has continued to follow traditional middle-power approaches, such as recognising Palestinian statehood through multilateral institutions. Rather than replacing these approaches, middle powers are opening new niches. A clear example is rare earths, where both countries are gaining strategic access as U.S. interest in minerals critical for its defence and technology sectors grows.
China dominates rare earth processing, controlling over 90 per cent of global output. In response, the United States is diversifying its supply chains. Australia’s Lynas Corporation, the largest rare earth supplier outside China, has seen its share price approximately double in 2025. Lynas has secured contracts with the U.S. Department of War and partnered with U.S. firm Noveon Magnetics to establish a non-Chinese supply chain for rare earth magnets.
Pakistan, overcoming past sanctions and Western biases favouring India, entered a US$500 million agreement with U.S. firm U.S. Strategic Metals in 2025. Its first shipment of enriched rare earths — including neodymium and praseodymium — marks an early step towards building a role in U.S. critical mineral supply chains.
These changes illustrate the concept of the ‘accomplice’ middle power — states that may not align ideologically with liberal norms but possess strategic capabilities and shared interests with great powers. Washington’s transactionalism means that ideological pedigree is secondary to utility. Pakistan’s growing role, despite its illiberal credentials, exemplifies this new model.
Yet for middle powers seeking to uphold liberal values, coalition-building remains vital. Australia’s alignment with EU states on Palestinian recognition and the establishment of an EU–Australia critical minerals partnership reflect efforts to maintain liberal influence through strategic partnerships.
On trade, Australia has led initiatives to counter U.S. disengagement. Canberra co-founded the Multi-Party Interim Appeal Arbitration Arrangement tribunal to replace the dormant WTO Appellate Body and helped reframe the Trans-Pacific Partnership into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership after the U.S. withdrawal. On regional security, Australia has deepened ties with Japan and the Philippines to counter Chinese aggression and maintain stability around Taiwan.
Australia also promotes liberalism in the Pacific through development projects aimed at countering Chinese influence in nations like the Solomon Islands and Papua New Guinea. These efforts suggest a pragmatic approach: if policies do not conflict with U.S. transactionalism, the United States is unlikely to intervene.
The accomplice model redefines middle power diplomacy. States that can supply strategic goods, exert regional influence or execute discrete tasks are rewarded with partnership regardless of their liberal credentials. This framework accommodates Pakistan’s rise and Australia’s adaptation, offering a more inclusive and functional understanding of middle powers’ roles in a multipolar world.
Within the framework of U.S. transactionalism, middle powers have opportunities to engage in niche diplomacy that leverages their unique capabilities and strategic positioning. But there is a global cost to the departure from liberal hegemony, even if temporary. The United States has long led a global movement towards democracy, capitalism, human rights, rule of law and multilateral institutions. That leadership is waning and projects funded through institutions like the United States Agency for International Development may be diminished or discontinued.
Middle powers still have an option. If inclined, they can champion liberalism through coalitions, multilateralism and good international citizenship. The re-emergence of great power conflict is compelling the United States to turn inward — rebuilding its economy, expressing an interest in fiscal balance — without demonstrating substantive action — and focusing on domestic priorities. This inward turn risks ceding the moral and institutional leadership that underpinned the liberal international order.
In this vacuum, middle powers are acting as regional stabilisers and architects of a reimagined model of globalisation and multilateralism. By investing in regional institutions, defending democratic norms and fostering inclusive economic development, they can help preserve the spirit of liberalism even as the United States recalibrates its position against China. This moment is not only a challenge but a strategic opening for middle powers to redefine their complementary global role.
First published on East Asia Forum. https://doi.org/10.59425/eabc.1765015200
Jonathan Ping is Associate Professor in the Faculty of Society & Design, Bond University.
Umair Ghori is Associate Professor in the Faculty of Law, Bond University.
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