Ending the American Century: From World War II to World War Trump — Part 2
Most empires eventually fall to foreign invaders, this one has decided to extinguish itself
In Part 1 of this piece, I discussed how and why the American Century, announced by Henry Luce in 1941, has suddenly come to an end at the hands of the Trump 2.0 Administration. Now I want to drill down into the deeper implications of this development. I believe the end of the American Century will have repercussions that go far beyond American abdication of the global leadership role it has played since the end of World War II. Ironically, America’s self-destruction and the end of American dominance over the global economy may have a silver lining … not for America, but for the rest of the world.
How the end of the American Century will change the world
Here are two longer-term consequences that are likely to play out as America continues its descent into Trump-led, Republican-enabled chaos.
American prosperity and economic growth will end, the world will move on, and America will be left impoverished and vulnerable to exploitation and dissolution.
The Economist, which just a few months ago ran a front page story calling the American economy the “envy of the world”, is now calling Trump’s tariffs “the most profound, harmful and unnecessary economic error in the modern era” (source).
Based solely on one man’s ignorance, misunderstanding of history, and revenge fantasies, Trump’s tariffs are triggering a global trade war that virtually guarantees the world will be entering a recession, and possibly a depression, within months. Retaliation, not capitulation, is already emerging as the default global response, with trading partners as diverse as Canada, the EU, and China announcing reciprocal tariffs that will essentially push world trade off a cliff. Or, to be more precise, it will push world trade with the United States off a cliff.
We can already see signs that the world is beginning to bypass Trump’s America. New trading blocks are emerging rapidly. For example, China, South Korea, and Japan — three former adversaries — are now agreeing to “accelerate negotiations on their trilateral free trade agreement and enhance cooperation in supply chain management and export controls” (source). Similarly, America’s two contiguous neighbors and largest trading partners are actively seeking new trading partnerships to compensate for the devastating collapse of their former free trade zone with the US. Both Mexico and Canada are now looking to significantly expand their trade agreements with the EU (source, source).
Trade will flow around the United States, like water flows around a rock in the middle of a stream.
Although the Trump Tariffs are a huge threat to the global economy, they are merely one bad idea coming out of a much larger threat — a nation that is capable of electing an impulsive, ignorant, predatory, lawless and untrustworthy government like the one we elected last year. Everything the Trump 2.0 Administration is doing (summarized in Part 1 of this post) signals to the world that the United States is no longer a reliable global partner and, perhaps more importantly, no longer a safe place to invest your money. We have shown the world we can become a rogue state, a dangerous disruptive force, at the drop of an election. And even if America is able to expunge Trump and his minions in the next Presidential election, what assurances does the world have that we won’t just turn around and do it again? None at all, and that is the true legacy of America’s 2024 Presidential election.
The key factor here is uncertainty. Everything the Trump 2.0 Administration is doing — not just playing whack-a-mole with tariffs — is contributing to uncertainty, and that is what is going to kill the American economy. Shankar Narayan said it well in a recent Medium post:
“Every time a White House spokesperson attacks a judge, every time the administration defies a court order, it’s not just a constitutional crisis — it’s a flashing red light to investors: This system is no longer safe.” (emphasis in original)
Or, as Paul Krugman has put it, MAGA is bad for business:
“Trump may impose further tariffs, or slash them as suddenly as he raised them, depending on who spoke to him last. L’Etat, c’est Trump.
“This kind of uncertainty is paralyzing for businesses, who are realizing that any kind of long-term commitment can turn out to have been a disastrous mistake. Build a plant that depends on imported parts, and Trump may cut you off at the knees with new tariffs. Build a plant that’s only profitable if tariffs stay in place, and Trump may cut you off at the knees by backing down.
Again, the point is that there really isn’t a MAGA economic philosophy, just whatever suits Trump’s fragile ego.”
How bad is the uncertainty at this point? The Federal Reserve Bank of St. Louis maintains a handy indicator of uncertainty called the Economic Policy Uncertainty Index. It is constructed from news reports, basically answering the question, how frequently is economic uncertainly mentioned in the country’s media? Here is how that index has performed since the COVID outbreak in March 2020:
There are reasons why corporations are not falling all over themselves to invest in Viktor Orbán’s Hungary. It is because that country’s economy is stagnant, impoverished, and corrupt (source). As Trump 2.0 follows Orbán’s playbook, we can expect similar outcomes for the USA.
If both trade and business investment collapse in the United States, what happens next? Right now the best case scenarios seem to expect a new surge of inflation and a likely recession, resulting in a significant dip in GDP (source). More dire forecasts, in contrast, anticipate a runaway-train type of scenario: not just lower GDP growth but GDP shrinkage (aka negative GDP growth) accompanied by persistent stagflation, chronic product shortages, and escalating climate disasters, all combining to produce an economic depression rivalling the Great Depression of the 1930s (for a few such scenarios, see source and source). The latter scenarios tend to include a wider array of factors, such as resource depletion, ecological overshoot, energy cannibalism, climate-driven disruptions of agriculture, manufacturing, and supply chains, and the potential domino effects of unrecoverable debt.
Whether America’s economic collapse under Trump 2.0 will result in a “mere” recession or a historic global depression remains to be seen. But America has relinquished its leadership role in the world in either case. Whether the United States ends up in a Brexit-like economic cul-de-sac or something much worse, the rest of the world can be expected to move on. As another Medium contributor has summed it up:
“Most Americans don’t realize what is going on or why the world buys treasury bonds and our debt. They do so because it is safe and they can trust us. But that is coming to an end. How can anyone trust a country that is allowing a madman to intentionally crash an economy, kidnap people at will, and send them to a gulag in El Salvador? Ultimately, how can anyone trust a country that elects convicted criminals for the presidency?” — Leonardo Del Toro
As fossil fuels become too expensive to produce, countries with functioning renewable energy infrastructures will become the new global leaders, leaving America and its fixation on oil and gas behind.
Inevitably mixed in with the fate of America is the fate of fossil fuels. As noted in Part 1, that fate has always been tied to volatility in international politics more than to fluctuations in energy supply and demand (source). What we have been seeing outside the US over the past decade is significant investment in solar, wind, and hydropower technologies as alternatives to fossil fuels for energy production, storage, and transmission. Inside the US, however, we’re seeing something quite different.
America has always been a reluctant participant in the world’s battle against climate change. This can be traced to many factors, but chief among them is how American has chosen to rule itself, and how its system of governance can be manipulated by minority interests with significant monetary resources.
The United States is the only western democracy that allows, indeed encourages, political bribery (source).
In addition, the American two party system is notorious for having many mechanisms for blocking and stalling positive action, but few for bypassing the resulting roadblocks and delays. Add to this one American political party that has essentially been bought and paid for by the oil and gas industry, and you end up with a unique case: the only country in the world with a government that insists climate change is a “hoax” and demands the right to continue burning fossil fuels and polluting the world with impunity.
Unfortunately for the Trump 2.0 “drill, baby, drill” energy plans, this agenda, described in Part 1 as the Oil Industry Agenda, is clashing rather spectacularly with Trump’s Retaliation Agenda. The problem is this: while you’re busy sinking the economy with insane tariffs, racist deportations, and government personnel “reductions”, you are also lowering demand for fossil fuels. And when you lower demand for fossil fuels, you lower the price they can command. At the same time, if you increase oil and gas production, as Trump is promising, then you are increasing supply in the face of lower demand, which will sink prices even further. Finally, there are now viable competitors for energy production and storage that are cheaper to build and run than traditional coal and gas plants. When these are chosen over fossil fuel solutions, as is now happening regularly in states as politically diverse as California and Texas, demand is decreased further.
As the rest of the world continues to invest in infrastructure to generate and deploy clean energy, the United States under Trump 2.0 will act, at best, as a free rider on those efforts (source). Betting its energy ambitions on faulty logic, a misunderstanding of oil field economics, and climate-change denialism, this administration is setting the stage for the oil industry’s eventual slide into insolvency. As one industry executive recently declared in a private industry conference:
“There cannot be ‘U.S. energy dominance’ and $50 per barrel oil; those two statements are contradictory. At $50-per-barrel oil, we will see U.S. oil production start to decline immediately and likely significantly … This is not ‘energy dominance’” (source).
Since January 20, the price of West Texas Intermediate (WTI) crude oil has dropped by nearly 14% (source). Two months into Trump 2.0, it is hovering around $60 per barrel. According to estimates by energy analyst Art Berman, WTI prices under “drill, baby, drill” are likely to decline to around $55 per barrel in 2027 and 2028, and might fall as low as $49 per barrel (source). At such prices, if industry executives are to be believed, the American oil industry simply becomes unprofitable (source).
Trump 2.0 energy policies are not only disastrous for the oil industry, they are even more disastrous for America’s renewable energy prospects. Going well beyond ignoring renewable energy, this Administration is actively sabotaging any and all renewable energy developments: cancelling billions of dollars worth of clean energy initiatives passed by the Biden Administration, leaving the Paris Climate Accords, gutting the agencies responsible for clean energy investments, and even (in a neat Orwellian turn) banning the term “climate change” from all government publications. The net result in a few years is going to be “energy irrelevance”, not “energy dominance”, as America’s oil industry collapses and the country has no Plan B to ensure any kind of energy continuity. A weak and energy-starved America will slip into irrelevance as the rest of the world moves forward, constructing a viable civilization on a much smaller, much warmer, post-carbon world.
“The country that electrifies most rapidly and builds the most renewables to power its electrified economy will be the most competitive economy globally.” — Michael Barnard
That country is unlikely to be the United States.
As the American Century ends, climate calamity accelerates, and a new hegemon ascends
Watching America voluntarily descend into poverty, lawlessness, and international irrelevance, the rest of the world must inevitably ask: What comes next? Right now, the collapse of the United States under Trump 2.0 may look like the defining crisis of the 21st Century, but in fact it is not.
Trump 2.0 is not the crisis of the century. It is the prelude to the crisis of the century.
One crisis to rule them all: climate change
The defining crisis of the 21st Century was, is, and will remain climate change: the relentless heating of the planet’s oceans and land masses due to the burning of fossil fuels — oil, natural gas, and coal — in massive quantities by the major industrial nations of the world. Some may want to argue that resource depletion or carrying capacity overshoot represent bigger crises, in part because our exploding human population would be facing these limits even if fossil fuels didn’t produce global warming.
It is of course true that all of these issues are deeply interconnected as part of a complex global polycrisis, but I believe climate change is the master crisis humanity faces today because it is here now, it is planetary in scope, and it is exacerbating all the other forces converging in the polycrisis. It is also a crisis with one cause (greenhouse gas emissions from fossil fuels) but multiple, overlapping, devastating consequences (floods, droughts, wildfires, wet-bulb temperatures, superstorms). To the extent humanity can limit that one cause, it can avoid at least some of the consequences that cause produces. In other words, climate change, unlike resource depletion or overshoot, is fixable. Our problem in not that we don’t know how to fix it, it’s that our political and economic leaders don’t want to incur the cost of fixing it. And who can blame them? The cost is the end of the modern world as we know it (source), and probably the end of capitalism as well (source).
I call Trump 2.0 a prelude to the crisis of the century because it has very suddenly created a political power vacuum that must be filled before the world can move forward to address these existential challenges collectively.
In a matter of weeks, the US has morphed from the world’s leading advocate for climate action to its leading enemy and denier.
While the US continues to sink deeper into climate denial and authoritarian posturing, the ‘what comes next’ question can be made more precise: who will the world follow now?
Say hello to the new boss
The answer is China. Forty years ago, while the United States was enjoying Ronald Reagan’s “Morning in America”, China was an impoverished and largely agrarian nation of about one billion people. It was still recovering from Mao’s Cultural Revolution, which ended in 1976 and involved many parallels with the cultural revolution Trump 2.0 is inflicting on America today, including attacks on intellectuals, universities, professors, and scientists (source). While the Chinese Communist Party later recognized its Cultural Revolution was “responsible for the most severe setback and the heaviest losses suffered by the people, the country, and the party since the founding of the People’s Republic” (source), the Trump team seems unaware of the historical parallel as it continues to push forward with attacking universities, defunding billions of dollars in scientific research, and firing thousands of government agency scientists.
Beginning in the early 1980s, China launched one of the most profound social transformations in human history:
“Since about 1980, China has built a few things. 500 cities. 46,000 kilometers of high-speed rail. 177,000 kilometers of highways. Tens of thousands of dams. Over 50 subway systems with over 10,000 kilometers of track. A lot of light rail systems. About 1.5 million kilometers of transmission lines. About 8 million kilometers of electricity distribution lines. 34 major sea ports. About 2,000 inland river ports. About a terawatt of wind and solar. About 240 major airports.” (source)
All of that effort burned huge quantities of fossil fuels, mostly coal, and contributed greatly to the planet’s CO2 emissions and rising temperatures. But the economic and social progress achieved has been nothing short of phenomenal: from a per capita GDP of 650 USD in 1978 to 15,000 USD in 2018; from 2% of world GDP in 1978 to 22% in 2018; from 88% of its citizens below the poverty line in 1978 to 1.4% in 2018. During the same period, life expectancy gained 10 years, urbanization increased from 18% to 57%, and literacy increased from 70% to 96%. (source).
Today, much of China’s massive infrastructure build-out is done. It won’t be building 500 more cities, it will be filling the ones it has. Its highly-electrified transportation infrastructure is in place, not on some drawing board awaiting approval. China now appears to be concentrating on an “electrify everything, as much as possible” strategy: It has built more wind turbines, solar farms, hydroelectric plants, and transmission lines than the rest of the world combined. It is now the world leader in manufacturing and exporting solar panels, wind turbines, energy-storage batteries, and electric passenger vehicles. It is building and funding a massive High Voltage Direct Current (HVDC) electricity transmission grid that will move more electrons over longer distances than today’s much more common and inefficient AC transmission systems. Its GEIDCO* initiative with the EU and other countries (141 in total) provides a vision and path forward for a world interconnected by high voltage, direct current interconnectors (source, source). Closely aligned with GEIDCO, China’s Belt and Road Initiative — a massive global infrastructure project designed to promote trade and connectivity among Asian, African, and European countries — is poised to fill the vacuum in international “soft power” that the US is so enthusiastically abandoning under Trump 2.0.
This is not to say China does not have serious challenges of its own — slowing economic growth, a shrinking population, and mass youth unemployment, to name a few (source). But compared to the United States, it is actively and aggressively planning and preparing for an inevitable energy transition that the US is now officially denying will ever happen.
When it comes to addressing climate change, America’s leaders are either too financially compromised to try, or too ideologically-blinded to care, or maybe both.
As the Trump 2.0 Administration sinks its teeth into America’s economy and society, the nation’s commitment to a survivable energy transition has gone from aspirational but inadequate under Biden to non-existent under Trump 2.0. China, not the US, is leading the world’s efforts to lower greenhouse gas emissions and limit global warming to a survivable level. China is ready to sell the world the most advanced renewable energy technologies and solutions, while the US is ready to sell the world … more oil and gas. As China leads the rest of the world in a global race to decarbonize, the US is closing its borders to immigrants and cutting itself off from global supply chains.
“America’s products of all types will simply get more expensive and less competitive on global markets. The USA may or may not build and deploy its own solar panels, wind turbines, batteries, and electric cars, but the world won’t be buying them regardless. The world, especially the three-quarters of it that’s in China’s Belt & Road Initiative, will buy China’s much less expensive, higher quality, more reliable products, just as it’s been increasingly doing for years.” (source)
The American Century is ending and the Chinese Century is beginning. But this century will not be like the last one — an orgy of growth and consumption fueled by a magical energy source and led by a powerful hegemon able to lay down the law and enforce a system of global trade and cooperation that enabled massive economic growth, much to the hegemon’s advantage, for 80 years. Our new hegemon will have a much smaller, much weaker, and much humbler post-carbon world in which to exercise its leadership. Due to climate change and the potential for numerous environmental tipping points appearing before the century ends, the world will be buffeted by climate catastrophes and disasters that are likely to exceed the damage, costs, and deaths suffered in all the 20th Century’s wars, combined. The world will be forced to navigate an energy descent, there will be winners and losers, and those who are further along in decarbonizing their economies will be able to wield significant power over those who have failed to plan and prepare for that inevitable descent.
A silver lining?
If there is a silver lining in all this, it is this. As America’s economy inevitably contracts, its energy consumption will shrink as well, ensuring that its large contributions to greenhouse gas emissions will also decline. Lowering emissions is a good thing: it doesn’t mean an end to global warming, but it does mean a slowing of global warming, and that is better than an acceleration of global warming, which is what is happening now. As climate scientists like to say, “every tenth of a degree matters”. A slowing of global warming will also provide humanity with some breathing room to keep developing better energy solutions that do not depend on fossil fuels.
Ironically, recalling the old admonition to “lead, follow, or get out of the way,” America has chosen to get out of the way, even as it imagines it is leading.
The world is ready to turn toward new leadership and China is ready to step into the void Trump 2.0 has created. The importance and implications of this development cannot be underestimated. We are about to enter a fundamentally new era.
