The end of American exceptionalism? How a changing America is reshaping global power

On 2 April, US President Donald Trump announced the imposition of reciprocal tariffs on the entire world — dubbed the “Trump storm” that sent shockwaves across the globe. This, along with the earlier US-Russia negotiations over the Ukraine issue that bypassed European allies, known as “overhead diplomacy”, make up Trump’s “dual shock”. 

Canadian Prime Minister Mark Carney remarked that the US-Canada relationship based on close economic and security cooperation had effectively ended. French President Emmanuel Macron suggested expanding France’s nuclear umbrella to pursue Europe’s path towards autonomous defence. Meanwhile, Western media outlets were filled with sensational headlines like “The end of the free trade era”. 

Looking back, however, the similarities with history are stark. On 15 August 1971, US President Richard Nixon announced the abandonment of the gold standard, which allowed the dollar to be converted into gold, while simultaneously imposing a 10% surcharge on all dutiable imports, to improve the US’s balance of payments. He also overlooked Japan, a US ally, by normalising relations with China. These two decisions were termed the “Nixon Shock”. 

Whether it is the Nixon shock or the Trump storm, it seems that US allies have the strongest reactions. They see it as the US overturning the liberal international order it had established and becoming an “unusual nation”. 

Yet, I believe that it is precisely because US allies have long lacked an alternative perception to the US-led order that rendered them so shocked. Essentially, Nixon was and now Trump is steering the US back towards being a normal nation, and the international order will thus see a new era of rebalancing.

The US does indeed seem to be an unusual nation. In economic policy, the US actively encouraged free trade and proactively opened its markets — a vast consumer market that not only allowed Western Europe and Japan to recover rapidly after the war, but ultimately enabled them to develop into economic competitors. Traditional nation-states would often base their economies on mercantilism and protecting domestic jobs.

In terms of security policy, the US has established extensive alliance networks across Europe and Asia, and it has always borne the major costs of these alliances — about 67% of NATO’s expenditures are covered by the US. Traditional nation-states typically focus on their own security and survival, and would be disinterested in bearing the high costs of security for continents leagues away.

US elites often use American “exceptionalism” to explain why the country is so generous. Former Secretary of State Madeleine Albright said that it is because the US stands tall and sees further; the US’s atypicality has been highly moralised. At the same time, US allies have also internalised US logic. The post-war abnormality of the US did not stem from altruism, it was a necessity to maintain its superpower status.

When the cost of maintaining this status — due to foreign interventionist wars and the failure of domestic redistribution policies — leads to a crisis, the US would naturally need to make strategic adjustments. Nixon needed to extricate the US from the quagmire of the Vietnam War and address the huge deficit, making the abandonment of the gold standard and improved relations with China a strategic necessity. 

Similarly, Trump wished to avoid being bogged down by the Ukraine war and address domestic dissatisfaction with the economy, making trade protectionism and improved relations with Russia strategically necessary. 

In essence, the US is a nation like any other — one cannot expect it to always be the provider of the world’s largest market or global security, as this is unsustainable.

Trump’s dual shock, essentially signifying the US’s continued evolution towards normalcy, will have two major global consequences.

One, the restructuring of global markets and supply chains, as well as the acceleration towards global economic integration. Take Japan: although the Shigeru Ishiba administration has been concerned about the US tariff war since Trump took office, it held on to the illusion that allies would be spared. When Ishiba visited the US in February this year, Trump made little mention of tariffs, much to Japan’s relief. The US-Japan Joint Leaders’ Statement, which proposed the building of “a new golden age for US-Japan relations”, led Japan to believe that this special relationship would convince Trump to exclude Japan in the tariff war.

Yet, on 2 April, Trump announced a 24% tariff on Japan, exposing Japan’s complete lack of preparation and leaving them scrambling to react. This will force Japan to recognise the significant risks of overreliance on the US market, necessitating a shift away from North America and towards Asia and other regions. A corresponding restructuring and adjustment of industries will naturally follow. 

Unlike the tariff war during Trump’s first presidency, which mainly targeted China, the current tariff war is targeted at 185 countries and regions worldwide, effectively blanketing the globe. The tariffs imposed on some Southeast Asian countries were surprisingly high, such as Cambodia, which tops the list at 97%, and Vietnam at 46%. These countries were seen as beneficiaries of the previous China-US tariff war, as some international enterprises shifted their production bases there to export to the US to circumvent US tariffs on China. 

With the US initiating a tariff war against the world, circumventing China would be useless, and countries must seriously consider developing markets outside the US. The Asian market is expected to account for 40% of the world market by 2030, implying a new round of economic integration, accelerating the rebalancing of the global economy.

Two, the US’s move towards normalcy also means that the strategic autonomy of countries around the world will evolve simultaneously. Following the Nixon shock and two oil crises, Japan’s understanding of security went beyond the original Cold War military security framework dominated by the US. During the era of Prime Minister Masayoshi Ohira, a comprehensive security concept featuring non-military means began to emerge. Similarly, during the latter half of the Cold War, ASEAN countries also further emphasised regional strategic autonomy, proposing the concept of a Zone of Peace, Freedom and Neutrality and a Southeast Asia Nuclear Weapon-Free Zone.

Indeed, we must also recognise that the US’s return to normalcy may trigger concerns among its allies about a global leadership deficit. Currently, Europe is discussing significant remilitarisation to achieve defence autonomy without relying on the US, while Japan is exploring further strengthening its defence capabilities. These developments could potentially lead to increased regional tensions. 

A potential global leadership deficit may emerge, and the historical responsibility of fostering a new world order while safeguarding the stability of the existing one necessitates the emergence of new leadership, with global south countries, including China, being particularly crucial. 

The substantial conclusion of the ASEAN-China Free Trade Area 3.0 Upgrade Negotiations in 2024 signifies the comprehensive integration of the two markets encompassing the populations of China and ASEAN. At the same time, the expanding consumer market of the growing middle-income group means that a supersized market encompassing 25% of the world’s population has emerged.

The aforementioned actions demonstrate leadership in providing what the current world economy needs most: markets. The world needs more such demonstrations of positive and proactive leadership.

This article was first published in Lianhe Zaobao as “美国“正常国家”回归之路 ——从尼克逊冲击到特朗普飓风”.

Related: Stephen Roach: China’s political calculus | Trump: America’s reforming hero?