US Declinism in Perspective

Is the US in decline? Do the justifications stand up to scrutiny?
25th July 202311 min

By Dr. Mohammed Zahed

Since America’s disastrous wars in Iraq and Afghanistan and the rise of China, many consider the unipolar moment to be coming to an end. Many consider US global power to be in decline and cite this as key evidence for the ending of the unipolar world.

Whether the US is in decline and the unipolar moment is coming to an end has major implications for global geopolitics. If the US is in decline and there is a shift in power to the formation of a multipolar world, then this scenario opens several possibilities for alternative global structures to emerge. If on the other hand, the US remains the prime power in the world, then this has its own implications. Is the US in decline? Do the justifications stand up to scrutiny?


One of the most prominent arguments to reflect US decline is that the world is shifting  from a unipolar to a multipolar world. This is oft repeated in the media and usually driven by the  rapid ascent of China and now the Russian invasion of Ukraine. Many think tanks in the US, Europe and beyond propagate this perspective. This argument is probably the most prominent currently about US decline.

We need to consider a number of matters when scrutinising this perspective. Is the goal of US foreign policy to ensure hegemony of the US dollar? Is it to be the supreme economic power? Is it to ensure that no competing powers arise that will eat from the same economic cake? If we look at these issues, they are important for the US and they are US goals, but they are not the drivers of US foreign policy. If US foreign policy goals were economic hegemony, why would she have assisted China in its economic ascent? It was the US that welcomed China into the global economy and the WTO in 1999 and integrated her into the global trading and financial systems. It was the US that permitted Chinese money into her real estate, financial markets and tech sectors.

If US foreign policy goals were economic hegemony, why would she have assisted China in its economic ascent?

What we have seen is the US had no problem in embracing China economically, with the belief that China would then undergo political reforms and accept the liberal world order. This obviously never materialised and is what has led to harsher and more confrontational policy by the US towards China.

The chief US foreign policy goal since WW2 has been to create and maintain a global liberal order in which other nations participate and submit to. This ensured US power, dominance, and influence through the rules, currency and institutions she created such as the WTO, UN, IMF and World Bank. Hence multipolarity, in principle, is not contradictory or in conflict with these key US foreign policy goals. Whilst China gets lots of headlines for organisations such as BRICS, SCO and the Asian Infrastructure Bank, these are not alternatives to the current order. Rather, they are parallel structures with the participating countries fully integrated into the global liberal order. This doesn’t mean this organisation could never pose a challenge to the US order, they could do in the future if sufficient finance and capabilities are built and an alternative global order is called for.

Today in Asia, there are a number of rising economic powers such as India and Japan as well as a second tier of economic powers such as South Korea, Vietnam, Malaysia and Singapore. Despite their historical tensions none of these nations want a regional war, but rather they all want an Asian system where all of them can benefit. They see the US as a balancer against nations like China. The US is also a Pacific power and trade with all these nations and having the stability for such a trade system to function is in US strategic interests. China’s aggression in the South China Sea is viewed as upsetting this delicate Asian system, something that is contradictory to US interests. In principle, the US has no problem with Asia’s ascent if it keeps within the status quo and no nation upsets or threatens America’s role. The recent Japanese decision to militarise its foreign policy, increase military spending and the formation of alliances such as QUAD and AUKUS are all meant to ensure balance in Asia and not necessarily to mobilise resources to wage war against China.

In principle, the US has no problem with Asia’s ascent if it keeps within the status quo and no nation upsets or threatens America’s role

GDP Politics

Many believe the US share of global GDP shrinking vis-a-vis other powers is also an indicator of US decline. The protagonists of this view believe GDP equals economic power and thus influence. This argument really gained prominence since the 2008 global financial crisis, which hit the US and the West hard, whereas China was somewhat isolated and did not feel the financial effects like others. The US was 50% of global GDP after WW2, she had the largest gold reserves and was the biggest oil exporter. This percentage of GDP has been on a steady decline and is now at 15%.

If we put this into perspective the British empire in the middle of the 19th century at its peak held approximately 7% of global GDP. This means that even after 50 years of steady US economic decline, as purported by some think tanks, the US will still be twice as powerful as the British empire at its peak. In addition, it was always expected other nations would increase their GDP and eat into the US GDP share. Europe and Japan were crippled after WW2 and it was US strategic goals to turn them into successful examples of free market Capitalist economies in order to counter the calls from Communism during the Cold war. Starting from crippled positions, they were always going to make significant economic progress. It was a US foreign policy objective to create the fertile ground for other countries to catch up to the US as examples of successful Capitalist economies.

Economic data and statistics do indeed reflect US economic decline.  For many, US manufacturing moving abroad and the level of both US government and consumer debt show the US has economic challenges. We do need to keep in mind that all superpowers go though peaks and troughs and that economic data doesn’t capture everything. US tech innovation, military lead and global military presence is very unique. The British empire maintained an empire on a shoestring and had a relatively weak indigenous production industry, but it exercised immense economic power which translated into geopolitical power. She was a master of controlling and exploiting the riches of the world and used them to enrich herself. Today the US has an extensive economic arm that allows it to control the world’s riches at the expense of others. This is why the US is much richer than China, and why it has substantial net resources to deploy in a conflict against China.

De-Dollarization in Perspective

The world is indeed moving to a process of de-dollarization, with more countries trading in their local currencies. Russia since its invasion of Ukraine has demanded trade in its local currency and this has seen Iran and Russia set up mechanisms for trade in local currencies. There is lots of talk of BRICS countries tuning to local currencies in their trade. All of these opinions are used by protagonists to argue a shift in global power, with US economic power diluting, resulting in a shift to a multipolar world.

This debate of de-dollarization is not new, it has been on-going for decades. After the launch of the Euro, there was talk of the European currency replacing the dollar, but the Euro remains a regional currency. Some argue the Chinese Yuan is ready to replace the dollar due to Beijing’s growing economic power. But the Chinese Yuan’s share of global currency is around the same as Canada and Australia! Whilst its use in transactions globally is a mere 3% China’s currency is nowhere close to global usage with the US dollar representing over half of global currency reserves. China places many restrictions on its currency, and as a result it is not freely available globally. This has for long been Chinese policy in order to maintain its export driven economy. For the moment, China is talking about the dollar and the problems this causes, but it’s not doing any of the actions necessary to challenge and replace the dollar.

Is the US Being Replaced in the Middle East

Many consider the position of the US in the Middle East indicative of declining US influence. In the Middle East, there have been many unprecedented developments recently, such as criticism from Saudi Arabia, criticism of the Israeli leadership by US officials and rapprochement between Iran and Saudi Arabia. China’s role in the Iran-Saudi rapprochement has seen the US gradually losing its influence in the Middle East.

The US is a global superpower and has a presence in every region of the world. Its presence is not uniform and the resources the US deploys depends upon its priorities and the threats it perceives. US foreign policy priorities currently are in the Far East and the need to deal with a regional challenger in China. As this is the priority that is driving US resources to the Far East. This does not mean the US is abandoning the Middle East. What the US is doing is shifting towards establishing a traditional balance of power system like the British did in Europe during the 19th century. This will ensure a cooling of regional tensions and conflicts while still allowing the US to act as a guarantor. If we take the case of Yemen, actors who were completely hostile to one another, the Houthis and Saudis, overnight changed their rhetoric and behaviour, with the Saudi foreign minister meeting the Houthi leader in Sana, something unthinkable even a couple of months ago. These shifts are not independent of the US, in fact they represent a new US approach to managing a crisis-ridden region so that it can focus on other geopolitical challenges.

Domestic Polarisation 

The US is facing deep polarisation, with Democrats and Republicans at each other’s throats. This level of polarisation has not been experienced before, even with some Republicans calling for a division of the federation into Democratic and Republican states! Trump’s possibility to contest the next election will further polarise the domestic front although the US establishment is doing its best via FBI indictments to make sure he is paralysed from contesting the 2024 election. Most foreign policy analysts agree that this domestic polarisation will impact US foreign policies and attention, with it becoming less aggressive and assertive, with it needing to sort out its domestic mess. This leaves room for rising powers and potentially new entities to rise and take advantage of US domestic preoccupation. One could also argue that the US hands-off approach in the Middle East is also because of its domestic worries and not only the Chinese threat in East Asia.

The balance of power system the US is attempting to introduce into the Middle East is volatile and fragile and does not preclude the possibility of it breaking down at any moment. The Saudi-Iran agreement does not cover the Iranian nuclear program, its ballistic missiles nor its regional behaviour. These factors could cause a collapse of this agreement overnight. Likewise the Egypt-Turkey rapprochement, Saudi-Turkey rapprochement, Qatar-Saudi rapprochement etc, could falter at any moment, creating new crisis situations to be taken advantage of. We saw something similar in the 19th century, with the British balance of power disrupted with the rise of Germany which led to WW1.

The world is witnessing tremendous geopolitical shifts and many unprecedented ones in the Middle East. However, none of these events reflect the emergence of a multipolar world order in the sense of the dilution of US power and the emergence of competing powers and blocs to its global leadership. The world has always known of a leading power that establishes rules and norms to interact with other powers and to organise them into allies and blocs to counter threats and challenges. A global power to fall off its perch needs to experience severe domestic and external pressures, especially the latter like the Ottomans did when it faced colonial attacks and conquests of their territories, or when Germany was taken out during WW1, with the allies threatened by Germany’s conquests of Europe. For the moment, be it China or Russia, no one is proposing an agentive ideological order for the world and engaging in political struggle to establish it. Until that happens it’s unlikely the global situation will change

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