The Future of American Economic Power

Carnegie Endowment for International Peace | Peter Harrell

The Trump administration has aggressively deployed tariffs, export controls, and industrial policies since January 20, 2025, to entrench United States global economic dominance and counter Chinese leverage. These unilateral measures target critical mineral supply chains and artificial intelligence leadership to secure American preeminence for the next twenty years, despite triggering a severe global backlash.

This strategy marks a shift from the post-Cold War system-building era of the 1990s toward a highly weaponised interdependence that exploits global financial and technological networks. By leveraging the dominance of the U.S. dollar and key technological chokepoints, Washington exerts immense pressure on both adversaries and allies. However, actions like cutting off International Criminal Court access to American software platforms have accelerated international efforts to establish digital sovereignty. Ultimately, the future of American hegemony depends on whether foreign nations can successfully build alternative networks of minimum viable scale to bypass U.S. infrastructure.

Comment

The weaponisation of Western financial architecture, specifically the 2022 SWIFT bans, accelerated efforts by non-aligned states to build redundant transaction systems. New Delhi's integration of the Unified Payments Interface with Singapore's PayNow represents a concrete step to insulate the domestic economy from secondary sanctions. While Europe's INSTEX failed due to corporate compliance fears, modern cross-border digital payment linkages offer a more resilient path toward strategic autonomy. Consequently, the long-term efficacy of American economic statecraft will increasingly clash with the proliferation of these decentralised, non-dollar clearing networks.

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