Updated · Peterson Institute for International Economics · Jul 2
US Enters Post-American Economy After 110 Years of Dominance as China Rises and Trump Returns
Updated
Updated · Peterson Institute for International Economics · Jul 2
US Enters Post-American Economy After 110 Years of Dominance as China Rises and Trump Returns
3 articles · Updated · Peterson Institute for International Economics · Jul 2
Summary
A post-American world economy has arrived, the report argues, with the US no longer providing the global insurance of deep capital markets, safe shipping, rules-based trade and protection against expropriation and corruption.
China’s rise and Trump’s re-election are cited as the break point, not a completed collapse in US economic capacity but a loss of the confidence that once made Washington back openness in its own long-term interest.
That shift could leave US supply chains costlier and less reliable, drive away immigrants and foreign technology, and push global standards in autos and information technology further away from US norms.
Europe is warned not to bet on a quick US return even if power changes in 2026 or 2028, because courts and Congress are described as having tolerated arbitrary executive power and self-dealing.
Without a major political realignment and possible constitutional reform, the report says, allies will need to self-insure against both US and Chinese economic coercion.
With the US leveraging the dollar for coercion, what are the real risks to its status as the world's reserve currency?
Can America's tech sector maintain its global lead amid new restrictions on talent, technology, and foreign competition?
As supply chains shift from efficiency to resilience, what is the true long-term cost for consumers and global innovation?
Global Economic Power Shift 2026: US-China Rivalry, Multipolar Order, and the Future of Trade and Finance
Overview
In mid-2026, the US economy faces a challenging environment shaped by aggressive trade policies and ongoing tariff actions. President Trump’s executive order in early 2025 set off a series of new tariffs and investigations, creating uncertainty for businesses and consumers. Some tariffs were later ruled unlawful by the Supreme Court, but the administration responded by introducing new measures, keeping trade tensions high. These policy shifts, combined with persistent domestic and global pressures, raise concerns about a potential economic slowdown if current trends continue. The evolving trade landscape remains a key factor influencing the US economic outlook.