The current administration has had numerous unproductive scuffles with allies and trading partners to renegotiate trade agreements, after running a presidential campaign on a protectionist platform, promising to return manufacturing jobs to the US.
After these negotiations were largely unsuccessful, close to the next presidential election, the administration abruptly locks in on one of the only globally successful social media companies that isn't US-controlled and insists that it must be purchased by a US-based company in order to continue operations in the US, without even attempting to resolve the issue through regulation. Due to the size of the US market, the company is bound to give in.
Of course, I'm deliberately telling the story in a biased way, but (as someone not from the US) I do feel that the US has been steadily on the way down as a credible defender of the principles of free trade. And this is just one more incident to add to the pile.
China was pretty poor country when it opened up. When it opened, all the western companies that agreed to their terms weren't doing it just to help out but they wanted a piece of that huge marked to get rich.
China managed to get a better deal than a lot of other countries who were basically plundered. Saying China is "reaping all the benefits" is just absurd. Western countries made countless of billions in China.
All this time, I was taught that it is a positive-sum, virtuous system that improves everything it touches - and that military interventions that enforced it were purely altruistic humanitarian acts, that were done for the targeted countries' own good.
Which is it? Is it a fragile house of cards that we have spread in self-serving ways? Or is it actually a robust positive-sum ideal that we should aspire to? (And therefore, we should ignore defectors, as they only hurt themselves.)
This then leads to a "tragedy of the commons" situation, which is a fairly well-established idea.
It sounds like a failed system, then - can we move over to some other economic model, that does not require coercion or a constant threat of war to function?
Unilateral coercion is not the basis for a free society, or free relationships between societies. It is utterly incompatible with sovereignty and democracy, and the ability of countries to decide their own internal policies.
As to your addendum, I am unaware of an economic model that intrinsically solves such problems of peaceful coordination between nation states.
Saying the US should just press forward with free trade is like saying it is X company's fault for failing when the entire reason they fail is because Y company is behaving anti-competitively, and that behavior is not being curbed by a higher power.
Except in this case there is no higher power to slap China on the wrist. So the only recourse the US (and honestly the rest of the world has) is to be protectionist right back until China realize that everyone wins if we all cooperate, nobody does if we don't.
This is classic prisoner's dilemma, except where the US has been letting China keep pressing "tattle" while the US keeps pressing "keep mum". It had to end at some point.