Following World War II, the United States Dollar became the anchor to the new international financial system known as Bretton Woods. To this day, the U.S. Dollar has remained the global reserve currency due to its stability and its assets such as the U.S.Treasury security. This has given the U.S. the ability to run higher trade deficits, allowed the Dollar to dominate in foreign-exchange trade, and even given the U.S. the power to impose unilateral sanctions against actions performed between other countries. In recent years however, many nations have become discontent with the Dollar’s dominance of the international financial system. In March of this year, the U.S., along with the E.U., agreed to ban Russia from the SWIFT financial transaction processing system. This effectively barred Russia from making any transaction or payments with any worldwide bank. In response to this, Russia demanded that “unfriendly nations” pay for energy imports in Rubles. This move by Russia has Europe divided over its energy supply. While some nations, like Poland, refuse to pay for oil or gas in Rubles, nations like France and Italy have been in talks with the privately-owned Gazprombank in order to make payments for their energy demands. In that same month, Saudi Arabia announced that it is considering China’s Yuan for its oil purchases. Earlier this month, Iran’s regime made its first purchase of imports with cryptocurrency in order to circumvent U.S. sanctions. Similarly, both Russia and China have posited this idea to avoid current and potential future sanctions. These recent actions show that nations now are putting their energy needs and economic opportunities over the interests of the power of the U.S. Dollar.
2. Military Intervention
One of the pillars of U.S. global influence has been felt in her use of military intervention in foreign affairs. Following the Second World War, the U.S. sent its military into every conflict they could. Many of these interventions were largely successful and came with overwhelming domestic support. Others, such as the Vietnam War, were very divisive and turned the nation against itself. Since the turn of the 21st Century, the U.S. foreign military ventures have become just as divisive as the Vietnam War. Many Americans began to question the ever-changing goals of the conflicts, and why we stayed in Afghanistan a decade after our main goal, revenge for 9/11, was accomplished. When the U.S. finally pulled out of Afghanistan, it was a huge blunder. Not only were 13 American troops killed in the process, but the Taliban retook control of the country. The nation-building project had completely failed. This failure had broad ramifications at home. The Reagan National Defense Survey, conducted in 2021, not only showed a huge drop in trust of the U.S. Military (from 70 percent in November of 2018 to 45 percent in November of 2021), but also showed that American support for global engagement had dropped as well. This drop in support for the military and for global engagement will hamper the U.S.’s ability to maintain its global influence. As Americans get tired of “forever wars”, and their perception of the political class being incompetent, military intervention will decrease, and other nation’ influence will grow in those areas.
3. Economic Development
During the meeting with the Group of Seven (G-7) national leaders last year, President Biden pushed his alternative to China’s “Belt and Road Initiative,” called “Build Back Better World” (B3W). Since this meeting, the President’s advisors have tried to work on the initiative, but despite vigorous lobbying, the plan gained little traction. Gyude Moore, a Senior Policy Fellow at the Center for Global Development (CGD) and a former minister of public works in Liberia, said, “Looking back at what we’ve seen, every iteration of an American-led response to the Chinese infrastructure project has underperformed.” Likewise, in a twitter thread, Charles Kenny, also a Senior Fellow at CGD, said, “More infrastructure for the developing world is great, championing values of competition, openness, transparency great. B3W shaping up to do not much of either.” While the Biden administration has talked a lot about B3W, few countries have seen much follow-through. A former president of the InterAmerican Dialogue, Michael Shifter, stated that many countries are in desperate need of resources following COVID-19 and that, “There are opportunities the Chinese are offering and the U.S. can’t match those… After a while, people just become very skeptical and say, ‘This is not happening.’” During this year’s G-7 Summit, President Biden pushed a rebranded plan under the new name “Partnership for Global Infrastructure.” The skepticism for this project remains high, and even White House officials doubt there will be significant government funding for this project. Gyude Moore also puts doubt on the possibility of public sector funding, stating, “The private sector is organized on a profit motive. If there were opportunities they would go after it themselves.”
4. Global Perception
Although a June report from the Pew Research Center shows that most nations surveyed view the U.S. favorably and as a reliable partner, their confidence in President Biden has fallen dramatically. While most nations still have a favorable view of the President, the number of those have confidence in him has dropped by as much as 30 percent in some European nations. This report also showed that most nations feel the withdrawal from Afghanistan was handled poorly. On top of this, according to a poll released by Rating Group Ukraine, despite the fact that the U.S. sent a total of approximately $8 billion in security assistance to Ukraine, more Ukrainians believe Poland has provided the most support against Russian military aggression.
5. Growth of Influence of Other Nations
A definitive sign of U.S. global decline is watching other nations become influential in the arenas the U.S. once dominated. Chinese President Xi Jinping is expected to meet with the Crown Prince of Saudi Arabia Mohammed bin Salman this week. The visit is expected to be a big event, similar to Donald Trump’s visit in 2017, to contrast with President Biden’s quiet visit this past July. Many critics claimed Biden’s visit achieved little amid the tensions between the Biden administration and Saudi Arabia. Critics also claim that the highly anticipated visit by the Chinese President shows the U.S.’s influence is waning in the region. Following Speaker of the House Nancy Pelosi’s trip to Taiwan earlier this month, China further tested the U.S. by holding military drills and weapons testing near the border of Taiwan. In addition to this, China released a new white paper regarding Taiwan which reneged on their promise not to use military force against the Island Nation. Many now wonder if China will mirror Russia’s current attempt at seizing an opportunity to gain as U.S. influence begins to decline. Along with this, after the BRICS International Forum in late June, the organization’s president, Purnima Anand, revealed that Egypt, Turkey, and Saudi Arabia plan to approach BRICS about becoming official members. Following this news, Argentina and Iran officially applied to become member nations of the organization. These countries, like the five current members of BRICS, share significant structural features such as rapidly growing economies, substantial military capabilities, and increasing political influence in global affairs. This is another clear sign that other nations sense that U.S. influence and power is waning, and are not only looking towards other nations for assistance but looking to increase their own influence regionally as well.