By Hiroyuki Kotake, Nikkei Washington bureau chief

WASHINGTON — As the dust begins to settle on the first six months of the presidency of Donald Trump, the world has been busy trying to absorb the full ramifications of his policy agenda.

Half a year of “America first” has left little doubt that the U.S. will no longer lead the world in terms of globalization and liberalism.

Now the realization has sunk in, Japan and Europe are looking to protect their own interests while China and Russia hope to seize the chance to challenge U.S. hegemony.

Jamie Dimon, Chairman and CEO of JPMorgan Chase, has openly expressed his frustration with the political situation in Washington. “It’s almost embarrassing being an American citizen,” he said, exasperated at the legislative gridlock stymieing policy initiatives on tax reform and infrastructure investment.

The U.K.’s wartime Prime Minister Winston Churchill was one of America’s biggest admirers. “If I were to be born again, there is one country in which I would want to be a citizen. There is one country where a man knows he has an unbounded future: the USA,” he said. The old man would be turning in his grave at the sight of Trump’s America lurching toward protectionism, immigration restrictions and isolationism.

Firebrand policies have seen the Trump presidency mired in problems of its own making and a series of scandals have engulfed the administration.

But the world is gradually adapting.

The monthly Global Economic Policy Uncertainty Index, compiled by a group of U.S. economists using reports in major newspapers, hit a record high of 312 when Trump was sworn in in January. But it has since fallen steadily, reaching 164 in June, a level close to where it was immediately before the presidential election in November.

There are signs that the markets are getting used to Trump and the world’s other major economies have started working on the assumption that his policy agenda is unlikely to change.

Japanese Prime Minister Shinzo Abe has been championing himself as the standard-bearer for free trade. His big initiatives include trying to press ahead with the Trans-Pacific Partnership without the U.S. and early implementation of the economic partnership agreement recently confirmed the outline with the European Union.

German Chancellor Angela Merkel has stressed the need to refocus Europe’s policies. “We Europeans must really take our fate into our own hands,” she said soon after this year’s summit of the Group of Seven leading economies.

Merkel has demonstrated a commitment to the Paris climate change accord and other important global policy efforts even without U.S. participation.

But there is a limit to what can be achieved in the absence of Washington’s leadership.

If Trump does resort to specific protectionist measures like restricting steel imports, Japan, Europe and other exporters will be forced to retaliate, triggering a global trade war.

Fifteen former top White House economists, including former Federal Reserve Chairman Ben Bernanke, have called on Trump not to impose tariffs on steel imports.

“We urge you to avoid a policy that would likely incur greater economic and diplomatic costs than any conceivable national security gain,” they stated in a joint letter to the president.

Some of Washington’s rivals have also sensed an opportunity for gain.

Chinese President Xi Jinping is maneuvering to use his Belt and Road Initiative — the development of a huge economic corridor linking East Asia and Europe — to expand China’s sphere of influence across the Eurasian continent.

Beijing’s recent courting of Panama has also been seen as part of a strategy to undermine U.S. supremacy. The Central American country established formal diplomatic relationship with China and severed its ties with Taiwan earlier this year.

Russian President Vladimir Putin is seeking to boost Moscow’s clout with the Eurasian Economic Union initiative, a regional economic partnership among countries in northern Eurasia.

Trump’s policy decisions in the first half year of his presidency have prompted former National Security Adviser Susan Rice to warn that China and Russia will emerge as the real winners of America first.

The president likes to say America should no longer be a “laughing stock,” but his actions have succeeded in raising awkward grimaces from the U.S.’s allies and, perhaps more worryingly, knowing smirks from its rivals.