Trump is Reducing the Global Economic & Political Power of the U.S.

We're one of the few empires to voluntarily give up our power

Most empires either go down fighting or they slowly lose their power as their advantages slip from their hands. But a few have voluntarily done so.

The closest example I can think of is the Chinese Ming Empire that at one time had an immense navy under Admiral Zheng He. At it’s peak they were the most advanced and militarily powerful nation on earth. And they then burned the fleet and turned inward,¹ with little further advancement until Europe showed up.

End of the Roman Empire

Military Power

We had Russia on the back foot. Yes we needed to get Europe to take over this fight. But halting military aid to Ukraine, signaling a thaw with Putin - that weakens our influence in Europe. This isn’t just a pivot; it’s a signal we’re less committed to countering authoritarian powers, leaving allies to fend for themselves.

We had China surrounded. China to the North and West is not endangered, but neither can they move anything in that direction. To the South are India and Vietnam, both of whom have had battles with China recently.

And to the East? Korea, Japan (especially Okinawa), Taiwan, & the Philippines keep China bottled up on their coast. Having all these countries as allies, with Australia able to come up from the South, was a giant constraint on China. Will any of these countries depend on the U.S. when it’s clear Trump is a very transactional individual?

There is only one thing worse than fighting with allies, and that is fighting without them.
— Winston Churchill

We had the dominant military power with our allies. Now they’re determining how to move forward independent of the United States.

Economic Power

If you understand what is happening with the bond market and the exchange rate, you should be scared shitless.² Our global economic power is based in large part on the absolute safety of our government bonds and the competent stewardship of our economy.

Gone, all gone.

With tariffs slapped on nearly every import—10% across the board, higher for some like China at 125%—we’re stepping back from the open markets we’ve championed for decades. This risks isolating us economically, as countries turn to other trade blocs like the EU or China-led initiatives. It’s less “America First” and more “America Alone.”

China, Japan, & Korea are working together on their economic response to Trump. They still hate intensely dislike each other. China & Spain came up with new reduced tariffs between them - in 2 weeks. The EU and China are discussing reduced tariffs on EVs.

We had control of the world economy and we’ve walked away from that.

On top of all that Trump has brought corruption on a scale of the Gilded Age, and arguably greater.³ People tend to avoid investing in countries where corruption determines what companies excel and which ones fail. Because companies will focus on rent seeking instead of increasing their productivity.

Governing by Tweetstorm

I was the founder & CEO of a successful software start-up. I can tell you from first had experience, the scariest thing to face is not a recession, it’s uncertainty. When COVID hit my concern was not that we might go into a recession, it’s that I had no idea of if we would and how it would play out.

Nobody knows what’s next because Trump’s decisions seem to come out of nowhere—one day it’s tariffs, the next it’s firing FBI agents or pausing aid. This unpredictability paralyzes planning, from Pentagon strategies to corporate budgets. It’s like trying to navigate a ship when the captain keeps spinning the wheel for fun.

What Does This Mean for Us?

These changes aren’t just headlines; they’re reshaping our place in the world and our lives at home. Here’s how it’s playing out:

1. Businesses in Limbo
   Companies are hitting pause—on hiring, expanding, even investing in new tech—because who knows what Trump will do next?⁴ A new tariff could tank supply chains; a random executive order could upend regulations. Multinationals are eyeing Canada or Europe for stability, waiting for a hint of predictability that might not come until 2029.

2. Economic Position: Sliding Down the Ladder
   As we keep isolating ourselves, our global economic clout will fade. Tariffs and trade wars mean higher prices and fewer exports, hitting farmers and manufacturers hard. As countries diversify away from the dollar, our ability to borrow cheaply weakens. And with companies focusing on rent seeking, productivity will decline.

3. Military Position: A Lonely Power
   Ditching allies while cozying up to Russia could leave us with fewer partners when crises hit. If NATO frays or Asia-Pacific allies pivot to China or each other, our military reach shrinks. Influence comes from trust, and we’re burning through that fast. China’s advances on drones could soon make them more powerful than us.⁵ And with favor to Trump determining advancement in the military, its effectiveness will decline.

4. Recession Risk: It’s Coming
   Economists are slashing growth forecasts, with tariffs, deportations, and layoffs acting like sand in the economy’s gears. A recession isn’t certain, but Moody’s and others say it’s likely if policies stay this disruptive.⁶ Recovering while Trump’s still flipping the board? That’s a tall order—businesses won’t invest, and consumers will hoard cash. Meanwhile much foreign investment will go elsewhere due to the corruption.

5. Next 50 Years: Can We Stay on Top?
   If we keep gutting research (bye-bye NIH grants), alienating allies, and scaring off investors, our edge in science and economics will degrade. China’s already nipping at our heels in AI and renewables. Fifty years from now, we might be a second-tier innovator, respected but not leading, unless we rebuild fast post-2029.

What Can We Do About It?

This feels overwhelming, but we’re not helpless. Here’s what individuals and state governments can do to cushion the blow, assuming Trump’s unpredictability runs through 2029:

• Individuals - Diversify your finances, assume the next 4 years will be a recession. And be true to your faith in our country. Stand up for what’s right.

• States - Prepare for smaller budgets & increased needs (unemployment, etc.) over the next four years. If possible, float bonds for capital projects as costs will be lower. Critically, fight any corruption. Don’t let the sickness at the federal level spread to the state.

These steps aren’t bulletproof—Trump could slap a tariff or ban something nutty tomorrow—but they’re proactive. States and people who plan for chaos will fare better than those who get buffeted by Trump’s tweet of the day.

Can We Fix This Later?

Yes and no. Fundamentally Trump will create a multi-polar world. There will be the U.S., the E.U., the Asian democracies, and China (with their vassal Russia). Sucks for us but it’s not necessarily a bad thing for the world. The trick is to get through it without another war.⁷

This will mean permanent damage to the U.S. Even if we elect a President in 2028 who can lead us out of this,⁸ with a supportive Congress,⁹ we’ve caused permanent damage and regression.

The biggest problem we will face internationally is every other country now knows that the U.S. is always one election away from telling the rest of the world to piss off. We can renegotiate trade deals and rejoin military partnerships. As allies pivot to other powers, they won’t fully trust us again. We’d be a partner, not the leader.

We will also need to reduce the corruption Trump will have embedded throughout the government. Corruption is incredibly hard to reduce.¹⁰ We’ll have the remnants of that degrading the impact of all efforts to fix things.

We can rebuild the administrative state. Some parts quicker such as adequate staffing for social security and the IRS. Some longer such as our funding for research. But a lot of this will put us 10 - 20 years behind, especially on research, forever. All that work needs to be restarted and that takes time. Gutted research pipelines—fewer PhDs, shuttered labs—take generations to rebuild. China won’t wait for us to catch up.

Wrapping Up

I wish I could say this is just a phase, but these shifts—military retreat, economic isolation, a wobbly dollar, a hollowed-out government, corruption, and Trump’s wild-card vibe—are reshaping our future for the worse. Businesses are frozen, our global clout’s slipping, and a recession’s knocking. We are fading as the world’s lab and bank.

We’ve got an important election in 2026 and a critical one in 2028. President Reagan saw America as a shining city upon a hill, something most of us Democrats agreed with. We had different views of how best to move forward, but we agreed on the goal.

The Trump/MAGA team sees a different world. One that is not win/win but one where one dominates and the other loses. One where every individual is out for themselves and there is no working for the greater good. One where the U.S. isolates itself from the rest of the world.

We have to face the fact that a significant chunk of the voters want what Trump is delivering. The country, the economy, and our culture, has not delivered to a significant chunk of the country. These are problems that need to be addressed. Trump won’t solve these problems, but we Democrats must.¹¹

In addition, we need to rebuild smarter than what we’ve got now. There’s a lot of room for improvement and we’ll need that to get us out of the hole Trump has dug and put us in.

A Postscript to my Republican Readers

You all have a lot of valid complaints of the Biden/Harris Administration. I agree with you on a number of them.

Donald Trump is not going to fix this for you. He has nonsensical views on the economy and what he is doing will hurt all of us, you more than me. His flailing on tariffs will not bring manufacturing back to this country.¹²

I will grant his efforts to stop illegal immigration are effective. But they’re also random in many ways and unnecessarily mean. I think he could be more effective with an approach that is thoughtful and humane.

Also a lot of what he’s focused on is retribution. Not retribution against those you feel wronged by, but those he feels wronged by. You may like that he’s forcing Universities to take action against anti-Israeli activists.¹³ Do you want a Democratic President forcing Universities to take action against pro-MAGA activists?

Finally, he’s corrupt.¹⁴ He’s not even subtle about it. Do you want a President who’s on the take? Because if someone offers him enough money, he’ll fuck you over.

1. Which is similar to Trump’s goal. To have us disengage from the rest of the world.

2. A Financial Crisis Primer, Part I

3. While many of those around the President in the Gilded Age were corrupt, the Presidents themselves were relatively clean. Trump by comparison blatantly has his hand out.

4. And that bubbles down. My company sold to large companies. If they hunker down, our sales would tank.

5. Abandoning Ukraine is hurting us here - they are arguably the most advanced power when it comes to drones.

6. Some economists think we’re already in a recession.

7. China - Taiwan being the big worry.

8. I think it needs to be a Governor who has demonstrated the ability to work with Republicans and to get things built. For example, Governors Jared Polis or Josh Shapiro.

9. Not just to rebuild the administrative state and our alliances, but one that will figure out the changes needed so this country can build again.

10. Look at the struggles Ukraine has had on this, desperately trying to reduce it and find it oh so hard to do so.

11. Here’s a good example of solving a piece of it.

12. For every manufacturing job shipped to China, there’s 10 jobs that disappeared due to automation.

13. I agree that the Universities should have said protest speeches are fine, but that’s it. No encampments, no threatening others. But I don’t want the President enforcing his speech codes on the school. Lawsuits, students, their parents, & alumni are the appropriate avenue.

14. Increases in pay come from two things: redistribution and productivity increases. Trump’s tax proposal redistributes from you to the rich. Corruption reduces productivity. Under Trump the pie shrinks (corruption) and your slice is reduced (tax cuts for the rich).