Global power and influence in 2018 and beyond. Part 1: The U.S. in a multipolar world


Donald Trump has initiated substantial change in many areas of U.S. policy.

His campaign slogan ”Make America Great Again” hinted that more incentives would be given for employment and the national economy, while some international commitments taken on since World War II would be curtailed. And while the national economy is doing well, few give Trump credit for it. The current U.S. difficulty in adapting to a multi-polar world cannot be attributed solely to Donald Trump. Even before his election, long-term trends were already affecting the country’s position in the affairs of the world.

U.S. foreign policy has sometimes been conflicted, and this seems to be the case today. On one hand, the surviving ”superpower” wishes to maintain the unique status it acquired during the Cold War and after the implosion of the U.S.S.R. On the other hand, the U.S. has often shown its proclivity to ignore inconvenient facts. This could result from members of Congress not being well-versed in global and diplomatic issues or to inward-looking presidents such as Donald Trump. In a government where the president has a high profile, as in France or the U.S., their views on international and global issues can influence the country’s policies and actions.

Among past U.S. presidents, Kennedy, Reagan, Bush (senior), Clinton, and Obama took interest in global issues (whatever their respective agendas). President Bush (junior) will be remembered mainly for the occupation of Iraq. President Trump has destabilised Allies and friends more than he has shown international leadership.

Some long-term trends in the U.S.

Decreasing U.S. dominance in global innovation and trade. Since the end of the 19th century, the U.S. economy has consistently been the largest in the world in nominal terms, while its percentage in the global economy has declined from 40% in 1960 to about 25% in 2013.

The role of innovation in the world economy has been widely documented, for example by Professor Beat Holz-Hart who, in a recent study, remarked:

”In the second half of the 20th century there was a clear hierarchy between nations in the areas of science and technology. The USA was clearly in the lead. Europe followed and was able to keep pace with the USA in specific, well-chosen areas. Asian countries were far behind. More recently, however, achievements in science and technology in China, South Korea and Singapore have made them more competitive.”

The U.S. is still in the lead, but facing an ever stronger competition, in:

  • advanced communications technology (China is implementing a highly secured data transmission system based on nanotechnology)
  • biotech (several countries)
  • social innovation (Northern European countries, Switzerland, Korea, Japan)

A less prevalent U.S. dollar (USD). From the end of World War II to the beginning of the 21st century, the American dollar was the dominant denomination in banking, currency reserves, and world trade. The Euro began to change this when introduced in January 1999. More recently, change escalated with the introduction of the Chinese rénmínbì (人民币 or ”the people’s currency”) as an international instrument.

As noted by the European Central Bank in 2015, ”The US Dollar remains the leading international currency, accounting for 50 to 60% of international transactions across various metrics of international currency use. The Euro remains the second most important currency internationally, accounting for 20 to 25% of transactions. Its role is particularly significant in countries neighbouring the Euro area. All other currencies, the Renminbi included, remain well behind the US dollar and the Euro, although the rise of the Renminbi as an international payment currency – which reflects the leading role played by China in global merchandise trade – is notable.”

Interestingly, the Euro is now the largest currency in circulation in the world. So while the U.S dollar still holds first place in international trade, the respective shares of the Euro and the Renminbi are increasing.

A large national debt, insecure public finances. World War II gave a tremendous boost to all sectors of the U.S. economy. Continuous economic growth did not lower the national debt; instead, over the long term, it rose from 32% of GDP in 1980, to above 100% of GDP in 2014. Currently, the federal debt held by the public is about 75% of GDP.

Projected into the future, this trend should put the national debt held by the public at roughly the same level as at the height of World War 2. The ratio of gross debt to national GDP is currently at about 105%, the ratio of revenue to GDP at 33%, and the ratio of spending to GDP at 35%.

After the Great Depression of 1929, U.S. banking recovered by following clearer rules, and by the 1940s, it seemed unassailable. But a massive deregulation of financial activity began in the 1980s. This encouraged speculation and led to the global meltdown of the financial sector in 2008.

Gradual decline in U.S. infrastructure. Among many others in the U.S. who have discussed this, the Council on Foreign Relations reports that ”in 2015 the United States ranked sixteenth in the world in a broad measure of infrastructure quality—down from fifth place in 2002. That places it behind countries like France, Germany, Japan, and Spain.”

While observers acknowledge that the budget proposed by President Trump might allow some improvement, the American Society of Civil Engineers points out that:

“Trump’s $200 billion in additional infrastructure spending would be offset by infrastructure cuts elsewhere in his proposed budget, including reductions to the Department of Transportation, the national passenger rail service Amtrak, and the highway trust fund.”

It is worth noting that the American Society of Civil Engineers now rates U.S. infrastructure at D+.

Current effects of the Trump presidency 

Issues of strategic importance to the U.S. As a presidential candidate, Donald Trump demeaned the North Atlantic Treaty Organisation (NATO), claiming that its European members were not paying their fair share for collective defence. After his election, Trump’s continued criticism created grave doubts about trans-Atlantic solidarity as enshrined in Article 5 of the Treaty, which was never challenged before. And because the president apparently failed to comprehend that the alliance was one of the most important global U.S. strategic assets, reassurances were given quietly to European allies by Secretary of State Rex Tillerson, as well as by ”Washington’s unlikely pair of NATO women” as described by Politico.

On the North Korean missile crisis, President Trump’s lack of a clear strategy, which cannot be compensated by any amount of tweeting, has caused considerable concern in Japan, South Korea, and even in China. While Secretary Tillerson has shown willingness to engage in consultations with Pyongyang, the White House has undercut him time and again. At this stage, and other than threatening to obliterate North Korea, President Trump has not indicated that he is giving serious consideration to defusing the missile crisis (see ”Can the Korean missile crisis be defused?” in WikiTribune).

Among the many regional issues on which President Trump has taken a stand, his decision to recognize Jerusalem as the capital of Israel and to transfer the U.S. embassy from Tel Aviv to that city, has caused the most widespread negative reactions. Because of this, his earlier visits to the Middle East, which provided a bonanza for arms sales, has compromised the credibility of the U.S. as a fair and trustworthy facilitator in the Middle-East peace process.

Global issues. President Trump’s decision to withdraw the U.S. from international efforts to avert induced climate change, has placed others in the limelight: French President Macron, German Chancellor Angela Merkel, but also Chinese President Xi Jinping. It is quite a novelty to see China, still one of the largest sources of atmospheric pollution, now being looked upon with more sympathy than the U.S. in environmental issues.

Another global issue is the Obama-era decision in favour of ”net neutrality”, which the U.S. Federal Communications Commission (FCC) voted in December 2017 to repeal, thus permitting large internet service providers, many of them in the U.S., to charge access fees to what has been considered as a right, ever since the inception of the internet. This decision, though not made by President Trump himself, was the first action taken by Ajit Pai whom he appointed as chair of the FCC.

The United Nations system. President Trump has consistently criticized the world body headquartered in New York, calling out its inefficiency, cost, and lack of impartiality. In November 2017, he withdrew U.S. participation in the United Nations Educational and Scientific and Cultural Organisation (UNESCO), thus depriving it of about a quarter of its annual budget, on the grounds that it was unfair towards Israel.

Decline of U.S. influence? For decades, U.S. involvement in the developing world was considered an important component of its global influence. Republican leaders in Congress and President Trump decided to slash funds allocated to development aid and, as a result, according to Rajiv Shah, former administrator of USAid, the “U.S. risks losing global development leadership role.”

Another pattern with possible long-term implications is a decline of foreign students in U.S. universities.  This may have various causes such as rising costs in the U.S. and improved availability of education in the countries of origin. However, it seems that the uncertainty arising from President Trump’s immigration policy, some reversed by U.S. courts, has discouraged a number of foreign candidates from applying. As the Washington Post remarked, ”The data from the Institute of International Education are likely to fuel questions about how the divisive 2016 presidential campaign and U.S. policy shifts since President Trump took office have influenced the global academic market.”

As for immigration patterns, the uncertainty brought about by Trump’s policies has slowed down the entry of foreigners, but also made the U.S. a less desirable tourist destination, as remarked by the Chicago Tribune. Finally, the overall reputation of the U.S. has declined along with the sharp rise of skewed news from U.S. sources, which has cast doubt on the reliability of the U.S. itself.

Conclusion

As noted above, some long-term trends suggest that the supremacy of the U.S., which was undisputed for most of the 20th century, is now being challenged by emerging powers and new wielders of influence. But the choices, actions and public attitude of President Trump during his first year in office will most likely affect the ability of the U.S. to maintain the prime influence it has exercised over many decades.

By showing disdain for government departments and agencies and their leadership (State, Justice, FBI), by demeaning the North Atlantic alliance and many of its European members, Donald Trump has contributed to bringing China and Russia closer to global prominence.

By imposing a short-term view on many issues of global significance, President Trump has unwittingly highlighted his difference with other global players who follow long-term policy orientations, say in the European Union, China, or Russia.

In his book ”Trumpocracy”, David Frum, of The Atlantic, writes that his chief concern “is not the bold overthrow of the Constitution, but the stealthy paralysis of governance” and complete disregard for the “rules of the game” on which constitutional democracy is founded (quoted from KirkusReviews).

Admittedly, Donald Trump’s choices do not represent the whole of U.S. reality: in January 2018, part 5 of this series of articles will discuss the “Global influence of non-state actors”, many of which are from or in the U.S.

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