What is surprising is how little movement this regrettable parade of mistakes created toward supplanting the U.S. as the dominant power in the international order. Even now, with the outlandish behavior and harmful policy choices of President Donald Trump, the structural strengths of the United States remain in place. The dollar remains the world’s holding currency, and Americans enjoy all the exorbitant privileges that accrue to that status. The U.S. just pulled the trigger on a financial stimulus of $2 trillion—a 10th of its gross domestic product—with no negative consequences for its ability to continue borrowing and printing money at essentially zero interest. As my American Enterprise Institute colleague Nicholas Eberstadt described it, the United States is “embracing Keynesianism with an abandon that might have startled Keynes himself”—making the right economic choices to forestall a collapse. The U.S. Federal Reserve has quietly become the central banker to the world, opening swap lines to ensure dollar liquidity to emerging-market borrowers.
No other country seems able to step forward and organize broad collective action. And no other great power looks more responsible than the United States in its current behavior. Power is a relative index as much as an absolute one. For America’s position to weaken in the international order, others must succeed. Despite some adroit propaganda by China earlier this year, that doesn’t appear to be happening.
China is the world’s largest creditor and especially extended in emerging markets; its Belt and Road Initiative is likelier to become a burden than to reorient global trade patterns to China’s advantage, because infrastructure projects that once appeared profitable have turned into white elephants. The Chinese government will have to decide whether to forgive huge swaths of debt or to cement its own image as a predatory lender by repossessing infrastructure—at the same time that the pandemic is spreading to poor countries whose health-care systems were already strained.