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Thread: What if the world treated the U.S. like a rogue state?

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    Default What if the world treated the U.S. like a rogue state?

    Interesting thought experiment, read below
    Spoiler Alert, click show to read: 
    WHAT IF THE
    WORLD TREATED
    THE U.S. LIKE A
    ROGUE STATE?


    Some risky but practical proposals to harness
    a superpower that has clearly lost control.


    Story by Samanth Subramanian. Illustrations by Zach Meyer



    Print this story
    THE PLANETʼS DENSEST EMBODIMENT of international cooperation lies in the heart of Geneva, in the few square miles around the lake. From the lakeshore, a brief walk through a park will bring a visitor to the Palace of Nations, built in the 1930s as the seat of the League of Nations, and now the United Nations’ office in the city. To the east, the World Trade Organization; to the north-west, the World Health Organization; an amble away, the headquarters of the Red Cross, the International Labour Organization, the International Telecommunications Union, and the UN High Commissioner for Refugees, among dozens of others. Also nearby is the InterContinental Hotel, where in November 2013, Iran agreed to dilute its nuclear program in exchange for sanctions relief—the first edition of the pact that President Donald Trump abandoned last year.
    It’s entirely fitting that just down the road from the InterContinental is the Graduate Institute of International and Development Studies, which occupies a complex named Maison de la Paix, its six buildings arranged like strewn flower petals. The InterContinental is of particular interest to Thomas Biersteker, a political scientist at the Institute, who has made a career studying sanctions. Biersteker, an American who taught at Brown University until 2007, is prone to discussing the antics of nation-states in a tone of wry curiosity, as if relaying the activities of ant colonies in his backyard. He lives for part of the year in a house in the Swiss Alps, where he hosts so many discussions on his preferred topic that his colleagues call it the “Sanctions Chalet.” Typically, Biersteker’s case studies deal with bad actors: states gone rogue, dangerous leaders thumbing their noses at the world. Increasingly, though, these descriptions seem to fit not just autocracies flush with oil or tinpot dictatorships but also the United States of America.
    Under Trump, America is in the business of actively creating or deepening threats to the world: capsizing the climate; pardoning U.S. soldiers and military contractors convicted of war crimes; supplying arms to Saudi Arabia, so that the kingdom can bombard Yemen. For a while, it looked as if Trump might attack North Korea; it’s still possible that he will start a war with Iran. In recently leaked memos, Kim Darroch, the former British ambassador to the U.S., worried that Trump would wreck world trade. Along the way, his administration has trashed so many diplomatic rules and norms that the entire edifice of postwar multilateralism is at risk. ( 1 ) A low point was Mike Pompeo’s speech last December in Brussels, when he attacked the European Union, the UN, and every other kind of multilateralism that the U.S. once championed. “There was a stunned silence after the speech,” said Anthony Gardner, a former American ambassador to the EU, “and then he left right away without taking questions.”Two years ago, Mary Robinson, a former UN special envoy on climate change, called the U.S. “a rogue state” for quitting the Paris accord. It’s common now for foreign policy professionals from America’s traditional allies to murmur brokenly about the “rules-based order,” as if they were standing at the bedside of a dear, dying friend.
    Everyone on the front lines of foreign policy has stories to tell of chaos and breakdown. In one minor but telling exemplar of the genre, UN officials were shocked last summer when the U.S. abruptly decided to stop contributing $300 million—less than 0.6 percent of its foreign aid spend—to the Relief and Works Agency’s budget for Palestinian refugees. The agency began its work in 1949, to assist Palestinians who’d newly been rendered homeless; with successive generations, its beneficiaries have swelled to around 5.4 million, many of whom still live in or near refugee camps. “The U.S never had a problem with that number, until last year,” one UN official told me. “Then they made the argument that the funding should be pegged to the original number of some 800,000 refugees.” The U.S. refused to budge, despite multiple meetings, including one in mid-August that lasted 15 hours—so long that, after the building’s cafes shut at 5:30 p.m., delegates had to leave the premises altogether to find food. These gatherings rarely conclude without some sort of consensus, or at least some ambiguous language to project unanimity, the official said. But in this case, even that wasn’t an option; America’s dissent had to be recorded in a footnote before the meeting could move on.
    A POLITICAL SCIENTIST COMPARED THE PRESENT INCARNATION OF THE U.S. TO “A LARGE, POWERFUL, OVERGROWN CHILD WITH A HANDGUN. HOW DO YOU DEAL WITH THAT?” A POLITICAL SCIENTIST COMPARED THE PRESENT INCARNATION OF THE U.S. TO “A LARGE, POWERFUL, OVERGROWN CHILD WITH A HANDGUN. HOW DO YOU DEAL WITH THAT?”


    There are so many “egregious examples” of this kind, Wendy Sherman, the undersecretary of state for political affairs during the Obama administration, told me. “To the point that our allies, European leaders, are looking elsewhere for solidarity.” A Canadian political scientist who advised her country during last year’s NAFTA renegotiations was sickened when Trump imposed tariffs on steel and aluminum using a provision for national security considerations. “What that meant to Canadians was: We are a threat to the national security of the U.S.” She described Trump’s actions as “brutal” and “an enormous betrayal” and added: “There was a growing sense that we were foolish to believe in the trust between the two countries.”
    This is an unfamiliar situation for everyone. David Sylvan, a political scientist and one of Biersteker’s colleagues, compared the present incarnation of the U.S. to “a large, powerful, overgrown child with a handgun. How do you deal with that?” The U.S. has never hesitated to make up the rules for itself, but after the end of World War II, it was largely cast as a hegemon maintaining a global order. Now, it is a hegemon that scorns that order. More and more, the world fears that Trump is only a symptom of a much deeper problem, said James Davis, an American political scientist at the University of St. Gallen in Switzerland. European politicians in particular, he said, worry that deep social trends in America—towards chauvinism, insularity and coercion—will keep blooming even after Trump leaves the White House. Other governments “aren’t going to be willing to deal with you on the same terms again,” Davis added. “They won’t trust the system. They’ll worry that in a few years, there will be another explosion.”
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    So the question is worth asking: How much longer will it be before the rest of the world thinks about punishing the U.S. for its misdemeanors? And how would they even go about disciplining a country as mighty as the United States?
    On a rainy April day, in a conference room in one of the petals of the Maison de la Paix, Biersteker convened for me a roundtable of a dozen or so sanctions scholars: practitioners, academics, researchers, economists. Few of them agreed to be quoted by name. Some worked with multilateral institutions and were attending in their personal capacities; a couple were Iranian, and unwilling to be linked to criticism of the U.S. Together, they proposed scenarios in which America’s misbehavior might pose genuine threats to the world, and speculated about how the international community could respond with sanctions, in the very widest sense of that word.
    Through the spring, I spoke to other experts as well, in Geneva, London, Hamburg, New York and Washington D.C. The world is changing, they all said. The American unipolar moment is ending. The economies of China and India will soon outgrow America’s. New networks of power, trade and wealth are emerging. Countries are forming alternative arrangements of finance that fall outside American influence. These developments will eventually leave the U.S. vulnerable to levers of pressure in a way it hasn’t been in the past. In the corridors of power in Brussels, Paris and Berlin, the idea of pushing these levers is beginning to sound less and less outlandish by the day.





    THE MODERN SANCTION, as Biersteker thinks of it, is a device born of the 20th century’s multilateral system. He described it broadly: “a restrictive measure—not necessarily economic—applied with some political purpose.” It was a key tool in the kit of the League of Nations, as envisioned by Woodrow Wilson. A hundred years ago this fall, Wilson toured the U.S. to sell Americans on the League’s potential to preserve peace and order. In a speech in Indianapolis, he explained that if one state’s actions threatened the welfare of the international community, other countries in the League could install boycotts of trade, travel and communication. “Apply this peaceful, silent, deadly remedy,” he said, “and there will be no need for force.”
    Despite Wilson’s optimism, the UN imposed sanctions just twice between 1945 and 1990: against Rhodesia (now Zimbabwe) and South Africa. But since the end of the Cold War, the sanction has been the instrument of choice for coercive diplomacy. When I first met Biersteker, in New York, he pulled out his phone to show me an app he’d helped develop, which holds histories and analyses of all the sanctions the UN has issued since 1991. (“You can download it, if you want, and play around with it,” Biersteker said. I thought he was kidding, but the app allowed me to select from varying theoretical scenarios of threat and conflict, to then recommend sanctions programs that were effective in analogous episodes in the past. Still, Candy Crush Saga it is not.) In the first decade after the Soviet Union collapsed, the Security Council voted 12 times for economic sanctions, and there are now 14 extant UN sanctions regimes. Countries have deployed their own sanctions as well, the U.S. most of all. At the moment, the U.S. has nearly 8,000 sanctions in place—so many that experts worry that the tool is blunting from overuse.
    Sanctions experts like to speak the language of pain. A sanction-sender will study the anatomy of the receiving country, then pinch it in the places that hurt most, said Richard Nephew, the lead sanctions expert on the U.S. team that negotiated with Iran during the Obama administration. Assessing “how pain translates into action” is a delicate and imprecise exercise, he writes in his book “The Art of Sanctions.” Inflicting pain on the citizens of a country might spark internal dissent, leading to an overthrow of the government. But it might also bind citizens closer to their government and to each other—a “rally ’round the flag” effect. Sometimes, the impacts of sanctions can be unexpected, as in Iran’s great chicken shortage of 2012. Right around the time of the biggest Iranian holidays, U.S. sanctions caused inflation that tripled chicken prices. It was as if the cost of turkey in America had tripled just before Thanksgiving, Nephew said. This sparked more frustration among Iranians against their government than years of financial constraints might have achieved.
    For sanctions upon a country to be most effective, its economy must be tied tightly and in manifold ways into the global web of trade and commerce, so that exile from this web causes true pain. This partly explains the dominance of the U.S. as a sender of sanctions. Other interconnected blocs, such as the Arab League and the African Union, have used their collective power to sanction one of their own. But only the U.S. has been able to unilaterally enforce sanctions in a consistent way, punishing not only receiving countries but other states and corporations that deal with them.
    THE U.S. ECONOMY RESEMBLES “A BIG PLATE SPINNING ON A TINY AXIS. IT DOESN’T NECESSARILY TAKE MUCH TO KNOCK YOU OFF THAT AXIS.” THE U.S. ECONOMY RESEMBLES “A BIG PLATE SPINNING ON A TINY AXIS. IT DOESN’T NECESSARILY TAKE MUCH TO KNOCK YOU OFF THAT AXIS.”


    The most practical reason for this power is the might of the dollar, the world’s reserve currency. The U.S. dollar lies on one side or the other of 88 percent of foreign exchange transactions, which means that the world’s banking networks all home in on America as well. “If you go to an ATM in Bangalore, or anywhere else, it’s very likely that some of those bits of data will, at some point, go through New York,” Jarrett Blanc, a senior fellow in the geo-economics and strategy program at the Carnegie Endowment for International Peace, told me. “And with larger transactions, you’ll have to have recourse to the U.S. in a meaningful way.” Only a few major currencies—those that banks and countries most commonly hold in reserve—can swap into each other without first being exchanged for the dollar. “Maybe you could convert euros into yen without going through the U.S.,” said Blanc. “But dirhams into euros—no. It’s like the financial system is a sewer, and all the pipes run through New York.”
    For companies and banks, being banished from the U.S. pipes is a fate akin to death. In 2015, the French bank BNP Paribas paid a penalty of nearly $9 billion for violating U.S. sanctions on Cuba, Sudan and Iran. “And if you look at their plea, they basically said: ‘Yes, we did it. We did it all,’” Biersteker said. (Eventually, BNP Paribas earned a one-year suspension of its U.S. dollar clearing operations through its New York branch for certain lines of business.) Biersteker explained: “Their main focus in negotiating their plea was not the size of the penalty, but the length of time they were afraid they’d be frozen out of the U.S. banking system.”
    The gravitational pull that the U.S. exerts over the world’s finances, like a black hole bending space-time, is also the reason it has historically been so difficult to sanction. But it isn’t just finance. Consider, for instance, that Amazon and Microsoft hold nearly half of the cloud storage used by companies and institutions around the world. If American companies came under the kind of sweeping blacklist that applies to Iranian firms, the BBC., Fujitsu, Novartis, Samsung, Maersk, Lufthansa, HSBC., the London Tube and the European Space Agency would all have to find other cloud providers in a hurry.
    The U.S. economy is threaded too tightly into everyone’s lives to be unwound easily. Every expert I interviewed began with this caveat; indeed, some couldn’t get far enough past it even to game out speculative situations in which the U.S. finds itself sanctioned by its peers. But others, particularly those in Europe, were eager to play. For all its primacy, Nephew said, the U.S. economy still resembles “a big plate spinning on a tiny axis. It doesn’t necessarily take much to knock you off that axis.”





    THERE WAS ONCE A SANCTION that severely wobbled the plate on its axis. In 1973, during the Yom Kippur War, Arab states levied an oil embargo upon America to punish it for arming Israel. The embargo only lasted a few months, and it didn’t stop America from selling arms to Israel. But denying America access to Arab oil caused genuine pain. Cars lined up at gas stations, truckers went on strike and the inflation rate sped upwards. The shock helped to touch off a two-year recession. The U.S. even briefly considered invading Saudi Arabia to restore its supplies of oil. ( 2 )When Henry Kissinger was told that James Schlesinger, the Secretary of Defense, had talked about sending in troops, Kissinger responded: “He is insane.”
    At the roundtable in Geneva, one speaker argued that the Arab oil embargo remains the best example of surmounting “the classic collective action problem.” Not every country in the world has to unite to constrain the U.S. What made the embargo possible was that a small set of states controlled a commodity that America relied upon, making a sanction easier to coordinate, he said. “So the question becomes: What’s the structural weakness of the U.S. that you need to target, and what’s the coalition of actors that you then need to put together?”
    Identifying the pressure points of America’s anatomy isn’t easy. After the 1973 embargo, the U.S. government set about making itself self-sufficient in oil—and has largely succeeded. One potential liability for the U.S. is the enormous financial leverage that China theoretically holds over it, in the form of $1.12 trillion in U.S. securities—more than a quarter of U.S. debt held by foreign governments. Dumping even a portion of that into the market would depress U.S. bond prices, make borrowing costly for Americans, and slow the economy. But China is unlikely to actually use this leverage—the resulting fibrillations in financial markets would pose risks to every country, China included.
    Richard Nephew ran through some of the more audacious options for me. (He prefaced this by sticking out his chin and saying: “Obviously I don’t want to be like: ‘Hey, hit us right here!’”) Say the five countries that host the most U.S. direct investment—the Netherlands, the United Kingdom, Luxembourg, Ireland and Canada—enact regulations that prohibit their markets and businesses from accepting funds from American companies and individuals. Domestic banks in these countries would turn away U.S. money that seeks, for example, a stock market to invest in, or a manufacturing plant to buy, or a subsidiary to fund. Say, additionally, that returns on existing investments were not permitted to be sent back to America. The U.S. would lose billions in national income. Using 2013 data, Nephew has calculated that America earned $439 billion from its international investments—a figure larger than all but the 28 biggest economies in the world. “The impact in terms of inflation, employment, housing markets—all that gets serious.”
    Or, as with the oil embargo, the U.S. could be denied supplies of other foreign commodities it urgently requires, such as rare earth metals. Roughly 90 percent of the global trade in rare earths is controlled by China, and U.S. companies import around $160 million worth of these elements to use in technology. In May, an editorial in the state-controlled People’s Daily unsubtly noted that by imposing tariffs on Chinese products, the U.S. “risks losing rare earth supply.” And then, ominously: “China has plenty of cards to play.”
    One form of sanction against the U.S. has already come in for serious discussion. In late 2017, months after Trump announced his withdrawal from the Paris agreement, a French climate policy analyst was invited to the office of an economic adviser for President Emmanuel Macron. The adviser asked how the EU could impose a carbon border tax upon countries that weren’t meeting their climate change commitments. In this meeting and another one in early 2018, the analyst told me, the adviser presented the government’s own ideas on, for example, what the EU might do with the revenue from such a tax. “This was very much against the Americans, although it wasn’t said in those words,” the analyst said. “They were very enthusiastic. They thought this was a way to rebalance the relationship with the U.S. and uphold the Paris agreement at the same time.” Macron called such a tax “crucial” in a speech two years ago.
    Since at least 2003, economists have gamed out how a border carbon tax might work. First, the EU would tighten its cap on emissions, making it more expensive for its own companies to buy or trade carbon permits. It might also introduce a domestic carbon tax on its transport, energy and manufacturing sectors. Then, to keep the playing field of trade level, the European Commission would recommend carbon border taxes on imports manufactured in countries that are reckless about their carbon footprint. At the most immediate level, these taxes could apply to materials such as steel, aluminium or cement, whose production is highly emissions-intensive and whose carbon cost is simple to calculate. The tax could be directed towards countries that impose no carbon prices at all. (Only 46 countries have any kind of national carbon pricing scheme.) Or it could be directed at the only country refusing to abide by the Paris agreement: the United States.
    The U.S. would almost certainly lodge a complaint with the WTO, arguing that the tax is discriminatory. But the EU could counter that it is merely extending its domestic climate policy to all imports. It could even reasonably argue that the U.S. is deriving an unfair trade advantage through its irresponsibility. “Not paying the cost of damage to the environment is a subsidy, just as not paying the full costs of workers would be,” Joseph E. Stiglitz, the Nobel-winning economist, wrote in 2006. One of the WTO’s chief functions is to prohibit just these kinds of subsidies.
    Brussels has another line of defense as well—one provided by the U.S. itself. In the mid-1990s, the American government banned imports of shrimp from four Asian countries, claiming their harvesting methods were hazardous to endangered sea turtles. The resulting ruling specified that environmental concerns are a legitimate reason to restrict trade. That ruling, Stiglitz wrote, sets a precedent for the imposition of measures like a carbon border tax.
    Anthony Gardner, the former U.S. ambassador, told me that after the initial burst of discussion, the notion of a carbon border tax became marooned in “limbo land.” Macron’s presidency grew ensnarled in other worries, the climate analyst explained, “and the U.S.’ volatility went from just Paris to this madness today.” Still, as recently as May, Macron repeated the proposal; the same month, Spanish ministers urged the EU to consider it as well. The first section of a manifesto by the incoming president of the European Commission, Ursula von der Leyen, features a carbon border tax. “If Trump wins a second term,” Gardner predicted, “there’s going to be even more pressure.”
    It is in France that Karen Donfried, the president of the German Marshall Fund, senses the most intense currents of exasperation with the U.S. “I touch down in Paris and start talking to people, and I see it. They’re now preaching from the gospel of strategic autonomy”—of trying to shrink Europe’s dependence on America. “That has been a longstanding French position, but they’re arguing it more vehemently today because they think America has gone bad.” Last year, France led eight other European countries in forming an “intervention initiative”—a military coalition outside NATO that has now swelled to 13 members. Macron has also suggested not making trade deals with the U.S. at all because of Trump’s rejection of the Paris agreement—a point he reinforced last week at the UN. And it is France that has pushed hardest for the European Defence Fund, a multibillion-dollar project to improve the EU’s ability to conduct its own security and defense operations, Donfried said. “The French see the U.S.’ role as having changed over time, and that it’s not going back to what it was.”

    SAY IT HAPPENS. Say a clutch of determined countries decide upon some form of sanction to inflict upon the U.S. They will find that, in the event of American retaliation, their first order of business will be to figure out a way around the U.S. dollar. But undermining the dollar can also be a sanction in itself, a way to censure the U.S.. In a café in Geneva, I met Ramon della Torre, an economist and one of Biersteker’s former students, who laid out for me, in animated fashion, methods to do that.
    One strategy, he said, would be for the largest oil-producing nations—or even for OPEC, the cartel that binds these nations together—to stop denominating the price of crude in dollars. At least 60 percent of the world’s annual oil production is paid for in dollars; oil futures and options worth trillions are priced in dollars as well. “Oil-producing nations could say: ‘We don’t want to take part any more in this petrodollar regime,’” della Torre said. “Arab countries might say this. Or Russia, which would be more interesting. And China might decide that it doesn’t care if it buys oil in dollars or euros.” That would rattle the dollar, he said. “I’m actually wondering why it hasn’t happened yet.”
    Some countries under U.S. sanctions have actually attempted to do this. Venezuela launched a petro-cryptocurrency to sell oil, and Iran began to accept euros for oil in 2006. But the game needs big players. Last year, China, the world’s largest importer of crude, introduced the first oil futures contract denominated in its own currency, and major oil producers such as Nigeria, Russia and Indonesia announced that they would accept payments in yuan. In April, faced with the prospect that OPEC might newly be subject to American antitrust laws, Saudi Arabia started to consider selling oil in non-dollar currencies. “The Saudis know they have the dollar as the nuclear option,” Reuters quoted a source as saying. If the world’s largest exporter of oil prices its barrels in euros or yuan, another source said, “it would be the U.S. economy that would fall apart.”
    MANY AMERICANS THINK THERE’S NO WAY AROUND THE DOLLAR’S SUPREMACY, SAID JARRETT BLANC. “THEY MISTAKE THE FACT THAT IT HASN’T HAPPENED WITH A PREDICTION THAT IT CAN’T HAPPEN.” MANY AMERICANS THINK THERE’S NO WAY AROUND THE DOLLAR’S SUPREMACY, SAID JARRETT BLANC. “THEY MISTAKE THE FACT THAT IT HASN’T HAPPENED WITH A PREDICTION THAT IT CAN’T HAPPEN.”


    Another way to diminish the dollar is to build an alternative set of what Jarrett Blanc calls “pipes”: channels of international finance that aren’t forced to rely upon U.S. banks to execute transactions. Examples of such systems are just beginning to emerge—ironically, because of the pressures of U.S. sanctions on countries such as Iran and Russia. Earlier this year, the EU formed a special purpose vehicle called Instrument in Support of Trade Exchanges, or Instex, which bypasses dollar payment channels to continue doing business with Iranian companies. ( 3 ) Instex maintains a ledger of sorts, to see that European firms exporting to Iran are paid not with funds from Iran but with euros from other European firms importing from Iran. A clearinghouse in Iran does the same for Iranian firms dealing with European counterparts.Instex clears trade only in food and medicines at the moment, although the EU wants to open it up to countries such as China, India and Japan, and to have it facilitate Iran’s oil exports as well. Separately, Russia and China have developed their own transfer networks that function as an alternative to SWIFT, the most common banking protocol, which is based in Belgium but complies with U.S sanctions on other countries and corporations. NGOs eager to funnel aid into Syria, stymied by U.S. sanctions, are working to set up cryptocurrency detours around the dollar.
    All these initiatives may well end in defeat; indeed, a new raft of sanctions on Iran, unveiled by Trump on September 20, already threatens to cripple Instex. As Blanc points out, there’s no one button that you can press to challenge the dollar. The euro is subject to the EU’s internal tensions; the yuan is controlled tightly by the Chinese government. Many Americans think there’s no way around the dollar’s supremacy, Blanc said. “They mistake the fact that it hasn’t happened with a prediction that it can’t happen.” So far, it has been too costly and difficult to try to circumvent the dollar. But the cost and difficulty of dealing with a heedless America may outweigh that of renovating the financial system, Blanc explained. “Only now are we testing what happens if the U.S. acts in a genuinely unilateral manner.”





    FOR THE FULL THEATER OF SANCTIONS to be revealed, America will have to commit a deed so flagrant that it goads the international community into action. “It has to be something very visible,” said Julia Grauvogel, a senior research fellow at the German Institute of Global and Area Studies in Hamburg. A nuclear strike against North Korea or Iran might do it, she said. Military intervention, say in Venezuela? “It would have to depend on the nature of the intervention,” she said. “Would they send troops on the ground? Would they use their nuclear capacity as a threat? There needs to be a very unambiguous case where the U.S. has broken international law.”
    Climate change delinquency may or may not cut it. When I first started asking around about climate-related penalties, I was invariably told that the pace of deterioration in the climate, while fast enough to cause alarm, was too slow to provoke sanctions. But last month, at the G-7 summit in Biarritz, France, a test case presented itself. With the Amazon rainforest aflame, leaders of the EU threatened to withhold ratification of a new trade agreement with the South American bloc Mercosur unless Brazil took steps to douse the fire. It was the first major instance of a sanction-like threat being held over a country over climate change.
    Even so, it will be difficult to extend the model to states breaking out of the Paris agreement or failing to curb emissions. The most critical provisions of the Paris agreement, dealing with emissions targets and financial commitments, are not legally binding. Even the resolve to reduce emissions varies across the world. “You need to have a norm which is equally shared,” Christian von Soest, Grauvogel’s colleague, said. “Think of Russia. Would they issue environmental sanctions? I don’t think so. It’s not a key norm for them.”
    But climate events will inevitably begin to cascade: freak storms, droughts, floods, migration, crop loss, conflict. “Maybe ten years from now, when the global economic balances change, if the U.S. has had ten years of Trump and Trump-like policies,” Nephew said, lesser things may serve as triggers. “They could be military actions, intensified use of drone strikes and the human rights violations associated with them, or withdrawal from international agreements.”
    “WHAT DOES THAT WORLD EVEN LOOK LIKE, WHERE...EVERY COUNTRY DECIDES WHAT IT WANTS TO DO, WITH NO RULES?” SAID A FORMER U.S. AMBASSADOR TO THE EU. “THAT IS A GLOBAL FREE-FOR-ALL, WHICH WON’T BE GOOD FOR ANYONE.” “WHAT DOES THAT WORLD EVEN LOOK LIKE, WHERE...EVERY COUNTRY DECIDES WHAT IT WANTS TO DO, WITH NO RULES?” SAID A FORMER U.S. AMBASSADOR TO THE EU. “THAT IS A GLOBAL FREE-FOR-ALL, WHICH WON’T BE GOOD FOR ANYONE.”


    In the short term, perhaps the most realistic option is for countries to adopt measures of civil disobedience. Already, European countries are doing this by withholding military collaboration. David Sylvan, the political scientist, referred to Trump’s short-lived plan last December to pull America out of Syria. “Normally the U.S. would get other countries to send in troops to replace them. They did that in Iraq and Afghanistan. This time, when they went knocking on doors, no one was home.” Britain and France, America’s two European partners on the ground, flatly refused to remain. “It is totally out of the question,” a French government official told AFP. “It’s just no.”
    As a result, the U.S. had to keep half of its two thousand soldiers in Syria, risking more American lives than it wished, even as it continued to seek help from Europe. James Jeffrey, the U.S. Special Representative for Syria, visited Germany in July to ask for ground troops but was turned down. Britain and France eventually agreed to send a far smaller contingent than the Trump administration had requested. Other countries asked the U.S. for payment in return for military support, a Trump administration official told Foreign Policy. Late in July, Germany also declined to participate in a joint naval mission led by the U.S. against Iran in the Strait of Hormuz. This was, Sylvan said, “one way to quarantine the U.S.—to say: ‘We’re not playing.’” These quarantines act as a sort of stealthy sanction, thwarting the U.S. from achieving its foreign policy objectives.

    IN “YEARS AND YEARS,” A BBC-HBO MINISERIES, a glimpse of a dangerous new era is available — and in the universe of the show, it doesn’t go well. At the end of the first episode, set in 2024, the Trump administration nukes a Chinese missile base, killing 40,000 people. The U.K. then levies sanctions against the U.S. Banks crumble, a financial crisis sets in, the UN threatens to relocate its headquarters — and America, swinging even further to the right, elects Mike Pence president. “We’re making it worse,” an expert says in alarm. Even in a make-believe universe, sanctioning the U.S. is an enterprise laced with peril.
    The wisdom of scholars has it that sanctions work better when applied against democracies, where the pressure might mobilize voters to throw out their wayward government. The truth is, though, that in the matter of sanctioning a functional Western democracy, the number of case studies in the literature is precisely zero. It’s possible that some form of international shunning will prompt citizens to vote Trump out, or even prompt Republicans to rein him in. But it’s also possible that the showrunners of “Years and Years” have it right: that Americans will double down on their choices—the old “rally ’round the flag” effect—and that their government will strike back.
    And so even an old friend like EU will have to exercise caution. “They know they will not be able to escape getting burned if they pour fuel on the fire,” said Karen Donfried. If the U.S. imposes new tariffs on cars imported from Europe, as Trump has threatened to do, the EU will hit back with tariffs on Caterpillar trucks, Xerox copiers, Samsonite luggage, and several other U.S. exports, their total value an estimated $39 billion. Cecilia Malmström, the European Trade Commissioner, told a parliamentary committee in Brussels in late July that this “rebalancing list” was ready to go. “I would hope we do not have to use that one,” she said.
    In reaction to European sanctions, Trump could lash out by following through on another of his threats: pulling the U.S. out of NATO. This would plunge the Western world into the kind of instability last seen in the 1940s. Macron’s European Intervention Initiative and the European Defence Fund have been planning for this scenario; so has PESCO, or Permanent Structured Cooperation, an agreement between 25 EU states to better integrate their armed forces. Without the U.S., Europe’s eastern borders would be exposed once again to a newly empowered Russia, raising the specter of annexations, skirmishes or outright wars. Europe would have to find vast amounts of money to plug the gap left by America. One analysis envisions a Russian occupation of Lithuania and part of Poland, and concludes that Europe would have to spend $288-$357 billion to build the capacity to respond to that aggression. For comparison, in 2018, the 28 member states of the EU collectively spent $364 billion on defense. The consequent conflicts over budgets might disintegrate Europe rather than unite it.

    The end result of these escalating retaliations is havoc. “What does that world even look like, where...every country decides what it wants to do, with no rules?” Gardner said. “That is a global free-for-all, which won’t be good for anyone.” And yet Trump’s America continues to turn more deeply into a mirror image of the kind of state it has always wished to punish: not just a sullen loner, not just out to grab wealth for itself, but a real, live, loudly ticking risk to the world. Its dangers don’t feel imminent; they feel as if they’ve arrived. And according to the U.S.’ own gospel, tact will fail to coax such menaces to mend their ways. Negotiations will yield nothing. The only leverage to be gained then will be by hobbling the faculties that America prizes most, the faculties it is already worrying about losing: its economic might, its moral authority, its outsized influence in the world


    So in short, sanctions could be employed by the world against the united states in the form of tariffs or duties on all US products, alternative systems in place to tame the americans until more sensible leaders are elected, or revolutions change the leadership.

  2. #2
    conon394's Avatar hoi polloi
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    Default Re: What if the world treated the U.S. like a rogue state?

    I kind of threw-up in my mouth a bit that anyone claiming to be an Economist mentioned the petro dollar as anything but a joke.

    https://www.forbes.com/sites/douglas.../#5775a29f6a14
    https://foreignpolicy.com/2009/10/07...ar-conspiracy/
    https://www.desertsun.co.uk/blog/5988/

    Oh god no the US export economy gets a bit stronger and the the Yuan stronger. By a tiny sliver.

    The real reason the dollar gets used (aside from the fact nobody really wants their currency to have the same demand) is down to Paul Volcker. He was willing to drive the US a significant recession to kill inflation and effectively stabilize the dollar. The Fed's independence was unaltered, and unquestioned.

    So in short, sanctions could be employed by the world against the united states in the form of tariffs or duties on all US products, alternative systems in place to tame the americans until more sensible leaders are elected, or revolutions change the leadership.
    In sort of nope not outside of the very long term. What you cite is a lot wishful speculation and none of the results examined. Not one German government economist to ask how they would feel about a 'strong' Euro for an export based economy?
    Last edited by conon394; October 10, 2019 at 11:50 AM.
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    Legio_Italica's Avatar Lost in Limbo
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    Default Re: What if the world treated the U.S. like a rogue state?

    What if the world treated the U.S. like a rogue state?


    The short answer: Enjoy your new communist/authoritarian overlords. I’m sure they will be happy to entertain your critiques of how they manage and exploit their global power. Yes, I’m American, and yes, I’m biased.


    The long answer: I think a more appropriate question would be: What if US-built international institutions were successfully turned against the US? The whole article is lamenting the loss of US-built international norms under a single US administration while talking about the need to weaken the US, using US-built and backed institutions and mechanisms. This presents an ironic lack of self-awareness, to say the least.


    As a premise, the article is faulty to begin with, if only because Europe is too weak and divided to enforce things like international laws, treaties, sanctions, or UN/WTO mandates. These organs were always weak to begin with, and are now in dire financial and political straits due to Trump’s policies, and the direction his hostile indifference gives the rest of the world regarding their respective responsibilities to the international community. For example, the EU can’t even convince Iran to hold to the nuclear deal in exchange for non-military and non-oil related sanctions relief, to such an extent that Iranian intransigence has begun to chase Europe back into the US’ corner. Democratic norms are weak or nonexistent elsewhere in the world, meaning the international institutions which depend on those norms will suffer and die as a result of US ejection from leadership. We’re already seeing the chaos resulting from nominal US attempts to act like other countries do, instead of like a world leader. The article complains about this, then turns around and says the solution is to double down on the problem on a global scale.


    Even if the world could avoid collective action problems and unite against the US, bolstered by the bandwagon of usual suspects (China, Russia, Iran, etc), it would be at least broadly the same scenario as if the world tried to cut ties with the EU or East Asia. The world economy would go through a significant decline, as we are beginning to see during the Sino-American trade war. Assuming the US did not flex its immense residual soft power, military or the US dollar to resist sanctions and penalties, etc, the whole exercise would still cost most countries more than they’re willing to pay, in my opinion. Chinese loans can’t solve everything.


    China is precisely the rogue expansionist power the article describes, and yet the world isn’t remotely ready to punish the Politburo to any meaningful degree. Even with the US government lobbying the world to do so, and Europe beginning to acknowledge China’s threat to property rights and human rights, the world is still hooked on Chinese cash and labor for the foreseeable future. The US is even more integral to the world economy, and we still can’t convince the world to subjugate economic interests in favor of moral or political aims.


    I think the underlying assumption that the world would be more stable without US leadership is also flawed. The US was able create the concept of global stability precisely because it has the means and methods to enforce that stability. China is trying to replicate that power, but she is already fundamentally distrusted by her neighbors and most of the world, flailing against internal divisions, and lacking in basic institutional stability and integrity that international cooperation depends on. Her own attempts to control and curate the domestic population are a detriment to her global agenda. Even if China succeeds in her long game of gradual domination thanks to US ineptitude, decadence and prejudice, the eventual breakup of the current world order will look more like 1938 than 2138. When the US finally slips and falls off the world stage in 10 or 50 years, it will be by our own hand, not anyone else’s.


    The point is, feel free to punish the US for whatever or however you like. The assumption that someone(s) else (worse) won’t come along and take our place once the campaign is successful is beyond naive. The contender(s) to do so don’t generally care for the metrics or reasoning by which the article is proposing to punish the US, either. The mechanisms to do so without resorting to traditional military force would die with us, to say the least. The assumption that no one in particular will take our place, and thereby replicate the inequitable power dynamic the article complains about, is not concurrent with any modern context. Given all the above, I don’t see what net positive alternatives the article is proposing to US leadership, other than “America bad. Must spank. Hard.”

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    Ludicus's Avatar Vicarius Provinciae
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    Default Re: What if the world treated the U.S. like a rogue state?

    Quote Originally Posted by Legio_Italica View Post
    I think a more appropriate question would be: What if US-built international institutions were successfully turned against the US?
    In fact, the US makes a meaningful contribution to dozen of international institutions : https://www.state.gov/wp-content/upl...or-FY-2017.pdf
    A more appropriate questions is: why is Trump trying to destroy US-built international institutions? he's talked about cutting funding to a lot of international organizations ( UN, etc, etc.) and is actively undermining global health collaboration.

    Trump blasts UN for not collecting dues as General Assembly reveals ...
    U.S. pays more than any other nation toward the UN but is delinquent in its dues to the General Assembly this year.
    State Department says it will pay up sometime this fall, but Congress provided the money in January.
    Every other G7 nation is current with its dues payments, as are Syria and more than 120 other countries
    Last edited by Ludicus; October 10, 2019 at 12:54 PM.
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    hellheaven1987's Avatar Comes Domesticorum
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    Default Re: What if the world treated the U.S. like a rogue state?

    Probably because only 35% has a 4 years college degrees.
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  6. #6
    Abdülmecid I's Avatar ¡Ay Carmela!
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    Default Re: What if the world treated the U.S. like a rogue state?

    China is not communist. It sounds like the "True Scotsman" fallacy, but I wouldn't say the same for the Soviet Union. In fact, their model is not even state capitalism, as the superficially state corporations are in reality exploited by a specific number of investors and managers, who may also simultaneously hold offices in the state administration. The economic model of China is surprisingly similar to that of the United States, with the exception being the privileged position of certain elites, masked under the guise of state authoritarianism. Although even these legal violations can be somewhat compared with the disproportional influence of lobbies and wealthy companies in the judiciary systems of Western democracies.

    Any talk about treating the United States as a rogue nation will inevitably be very hypothetical, because, as it has already been mentioned, America still remains too powerful to be challenged diplomatically, militarily or financially. It may not enjoy the same unrestrained freedom it did, in the early '90s, following the collapse of the Warsaw Pact and the disintegration of the Soviet Union, but there's still a long way to go. Determinism is out of fashion since the reactionary intellectual wave during the end of the 20th century, but the causes for the relative decline of America do not lie in the skills of the government. Individual policies can affect certain details, but not the overall course. As the potential of industrialisation, technological advance and commercial booming is exhausted, other countries will take the lead, to be followed themselves by the next big player.

    Arguments about the end of history and liberalism being inherently linked to indefinite supremacy and prosperity are fragile, ideological propaganda, the product of either wishful thinking or a desire to please your employers and audience. In the ears of a historian, they also sound hopelessly unoriginal, as they are documented at least since Christian scholars were dead-sure about the bright destiny of the Roman Empire and became a cliché, when French Marxists were convinced of the Soviet Union's guaranteed path for global domination. As the wealth of the US decreases disproportionately, their international leverage will also minimise, while smaller nations will seek protection and aid from the next powerhouse. China, for example, has been traditionally painted as a bully, but the trend has already reversed, as many states, in Indochina and elsewhere, establish genuinely cordial relationship with Beijing, in order to deter hostile neighbors or to fund their infrastructure projects.

    This procedure is informatively similar to how the US themselves expanded their sphere of influence, following the aftermath of World War II and the dissolution of colonial empires. As the US loss in power decreases, opposition to them, which is currently practically suicidal, will steadily evolve into a feasible strategy. As the financial and military balance fluctuates, diplomatic alliances will shift accordingly, with America playing a continuously more marginal role. In my opinion, it's a natural process and there's nothing inherently good or bad about it, no matter how certain biased pundits will distort the facts. The Achaemenids do not anymore control the Middle East, the Ummayads no longer dictate the fortunes of the Islamic community, Latin America is no longer a vice-regency of Spain and Europe has not been afraid of royal, revolutionary and imperial France since 1814 and yet, no Dark Ages followed the demise of these powerhouses nor did the Earth stop revolving around itself.

    As for the form of the future global hegemony under presumably China, it's simply too early to make any coherent guesses. The assumption that a post-American future will be bleak is totally arbitrary, because, firstly, we don't know the nature of the next superpower's institutions. Even in the case of China, I'd argue that gradual liberalisation, as has been already experienced since the death of Chairman Mao, is a very realistic scenario. Secondly, assuming that the superpower's domestic regime will be reflected upon the global order is a common mistake, which history has repeatedly proven wrong. Ideology is a potentially useful tool, but it's never the priority in geopolitics.

    Just from what comes to my mind, the Soviet Union continued to tolerate and cooperate with nationalist dictatorships, despite the latter mainly concentrating their attention on massacring communists, one of NATO's founding members, that paragon of liberal democracy, officially endorsed clerical fascism, China happily supported liberation movements in exotic places, like the Omani desert, one of America's first actions during the Cold War was to aid an authoritarian monarchy allied with the remnants of collaborators, with the goal of exterminating the resistance and even the Third Reich openly encouraged Ion Antonescu to evaporate the Romanian Nazis of the Iron Guard.

  7. #7

    Default Re: What if the world treated the U.S. like a rogue state?

    Quote Originally Posted by Exarch View Post
    Interesting thought experiment, read below


    So in short, sanctions could be employed by the world against the united states in the form of tariffs or duties on all US products, alternative systems in place to tame the americans until more sensible leaders are elected, or revolutions change the leadership.
    No one is raising tariffs to get the Chinese to withdraw from Tibet, or to improve its human rights, or stop its crackdown on Hong Kong.

    I think the world should place sanctions on China unril it stops its crackdown on Hong Kong, but that is not going to happen either.

    Major countries are not held to the same standard as the rest of the human, otherwise China would have faced sanctions over Tibet and how it treats itz minorities in the western regions, US. At least the US can show that minorities can reach the highest position of governments, you can't say the same for Chinese minorities.
    Last edited by Common Soldier; October 10, 2019 at 04:34 PM.

  8. #8
    Legio_Italica's Avatar Lost in Limbo
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    Default Re: What if the world treated the U.S. like a rogue state?

    Quote Originally Posted by Abdülmecid I View Post
    The economic model of China is surprisingly similar to that of the United States, with the exception being the privileged position of certain elites, masked under the guise of state authoritarianism. Although even these legal violations can be somewhat compared with the disproportional influence of lobbies and wealthy companies in the judiciary systems of Western democracies.
    It’s certainly true that China formally rejects any pretense at laissez faire capitalism, while in the US, the laissez faire part vanishes into the reality of cronyism at the mega-corporate level. That is just about where the similarities end, however, and I suppose it’s not useful to delve into the health of small and medium sized businesses in the two countries.

    Determinism is out of fashion since the reactionary intellectual wave during the end of the 20th century, but the causes for the relative decline of America do not lie in the skills of the government. Individual policies can affect certain details, but not the overall course. As the potential of industrialisation, technological advance and commercial booming is exhausted, other countries will take the lead, to be followed themselves by the next big player.

    This procedure is informatively similar to how the US themselves expanded their sphere of influence, following the aftermath of World War II and the dissolution of colonial empires. As the US loss in power decreases, opposition to them, which is currently practically suicidal, will steadily evolve into a feasible strategy. As the financial and military balance fluctuates, diplomatic alliances will shift accordingly, with America playing a continuously more marginal role. In my opinion, it's a natural process and there's nothing inherently good or bad about it, no matter how certain biased pundits will distort the facts. The Achaemenids do not anymore control the Middle East, the Ummayads no longer dictate the fortunes of the Islamic community, Latin America is no longer a vice-regency of Spain and Europe has not been afraid of royal, revolutionary and imperial France since 1814 and yet, no Dark Ages followed the demise of these powerhouses nor did the Earth stop revolving around itself.
    US decline in the course of human history is certainly a natural process, if only by sheer probability. The surrender of US superpower since the fall of the USSR is anything but natural. If SCOTUS had decided Bush v Gore differently, a Gore administration probably would not have invaded Iraq, and would have undertaken much more limited aims in Afghanistan/counterterrorism, not to mention a very different course of domestic policy. If US leadership had treated China like North Korea, rather than caving to the pressure of monied interests, China would not be poised to create global authoritarian hegemony today, powered by western wealth and technology. If a few counties had voted for Clinton instead of Trump, the US would not be stabbing itself repeatedly in the face today. Decisions were made, paths taken.

    China’s population is obviously far larger than that of the US, with vast access to Asia and the Pacific. It’s natural that China should be a global economic powerhouse, integrated into the US world order, with a consumer base large enough to lift the entire world economy. It’s not natural that US corporations built a new global rival from what was previously a feudal farming collective of starving peasants, determined to destroy and supplant US hegemony. As recently as 1996, the US checked China’s attempt to flex its muscles at even a regional level by sailing a battle group through the Taiwan Strait. 20 years later, it’s not certain that the US military in East Asia could survive a Chinese offensive.

    https://www.usip.org/publications/20...common-defense

    Even now, the US could have brought down the Politburo by working with US allies and our intelligence services to curtail technology and wealth transfer, and empower the people of China to destabilize Beijing’s grip and muzzle its expansionist ambitions. With Trump’s “America First” tariff war set to fail, that window of opportunity is now likely closed as well. With US political leadership growing older, and potential replacements being less capable and more inwardly focused, the trend will not likely reverse. No one person or nation took power from the US. Internal rot, hubris and decadence gave it away, and it was an entirely avoidable course of events.

    As for the form of the future global hegemony under presumably China, it's simply too early to make any coherent guesses. The assumption that a post-American future will be bleak is totally arbitrary, because, firstly, we don't know the nature of the next superpower's institutions. Even in the case of China, I'd argue that gradual liberalisation, as has been already experienced since the death of Chairman Mao, is a very realistic scenario. Secondly, assuming that the superpower's domestic regime will be reflected upon the global order is a common mistake, which history has repeatedly proven wrong. Ideology is a potentially useful tool, but it's never the priority in geopolitics.
    The US has largely enforced its political ideology globally in the form of world capitalism, and the international institutions it created. The fall of Rome did indeed lead to a Dark Age. As the US fades, people will not be living in huts, nor precious knowledge lost. But it will indeed be a relative Dark Age for political liberals, traditional norms of international commerce, and institutionalists.

    The “more money=more political liberalization” theory was the product of American hubris; a myth shattered by Tiananmen Square, Putin’s Russia, the War on Terror, and the Chinese surveillance state. This isn’t to suggest a Chinese empire would bring world communism, but the more global influence it has, the more it will seek to shape external politics to be conducive to the power of the Politburo. We’ve seen this already in the way western commercial interests and even governments tiptoe around the Hong Kong protest movement, with businesses even turning against their own consumers in an effort to dissuade Chinese censors from taking punitive action:

    https://www.newsweek.com/amid-nba-ba...otests-1464131

    The US does deliver unique value to the world in the form of the democratic norms it established and ostensibly enforces. Without them, the easy money won’t be so easy anymore, to say the least. I believe the world will be worse for it, when the US sufficiently fades, or is defeated as the OP’s article suggests. We can see an example of that as the legacy of British legal institutions and political sensibilities struggles alone against the iron vice of the Politburo. Meanwhile, Hong Kong has 50-60% higher income per capita relative to Shenzhen or Beijing, and dramatically lower levels of corruption, according to Transparency International. Taiwan boasts a substantially wider disparity to China on one or both counts.

    https://versus.com/en/beijing-vs-hong-kong
    https://www.transparency.org/country/CHN

    China can copy the US, but it can’t be the US as long as it categorically rejects the political aspects of the model. The survival of the Politburo and its expansionist ambitions depends on denying the people of China the opportunity to choose anything like it. A post US world order would precede the defacto decline and fall of international democratic norms and institutions, independently of explicit efforts to demolish them.

  9. #9
    Carmen Sylva's Avatar Domesticus
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    Default Re: What if the world treated the U.S. like a rogue state?

    The US does deliver unique value to the world in the form of the democratic norms it established and ostensibly enforces.
    Like the military juntas in Central- and South America? South Vietnam? South Korea was first a military junta too. Phillipines are now an autocratic dictatorship with death squadrons killing people as drug dealers without process. US doesn't care about its former colony.

    Reality is: US don't care about democracy as long as US big business is making big profits.
    Proud Non-Citizen / My Mods


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    Default Re: What if the world treated the U.S. like a rogue state?

    Quote Originally Posted by Carmen Sylva View Post
    Like the military juntas in Central- and South America? South Vietnam? South Korea was first a military junta too. Phillipines are now an autocratic dictatorship with death squadrons killing people as drug dealers without process. US doesn't care about its former colony.

    Reality is: US don't care about democracy as long as US big business is making big profits.
    The only reason democracy exists on continental Europe and in Japan and Australia is because of the U.S. This endless, en vogue whining about America and capitalism is historically illiterate, ungrateful drivel.
    Last edited by ep1c_fail; October 11, 2019 at 12:53 AM.

  11. #11

    Default Re: What if the world treated the U.S. like a rogue state?

    Honest question Exarch. What is your grudge against the US and it's citizens? Because your posts make me think that this isn't merely criticism, deserved or otherwise, about US policies. This feels personal for you.

  12. #12

    Default Re: What if the world treated the U.S. like a rogue state?

    Quote Originally Posted by conon394 View Post
    I kind of threw-up in my mouth a bit that anyone claiming to be an Economist mentioned the petro dollar as anything but a joke.

    https://www.forbes.com/sites/douglas.../#5775a29f6a14
    https://foreignpolicy.com/2009/10/07...ar-conspiracy/
    https://www.desertsun.co.uk/blog/5988/

    Oh god no the US export economy gets a bit stronger and the the Yuan stronger. By a tiny sliver.

    The real reason the dollar gets used (aside from the fact nobody really wants their currency to have the same demand) is down to Paul Volcker. He was willing to drive the US a significant recession to kill inflation and effectively stabilize the dollar. The Fed's independence was unaltered, and unquestioned.



    In sort of nope not outside of the very long term. What you cite is a lot wishful speculation and none of the results examined. Not one German government economist to ask how they would feel about a 'strong' Euro for an export based economy?
    That exorbitant privilege was used and abused by previous US administrations who didn't want a recession to occur on their watch; it's only natural that other nations would tire of having their earnings inflated away or having to deal with US fiscal irresponsibility.
    "The USD is our currency and your problem" was the common refrain from arrogant american mandarins.
    'Our currency, your problem': The US has made a weapon of the dollar

    Convinced of an existential threat from competitors, America is weaponising the US dollar to preserve its global economic and geopolitical position.
    While the US accounts for about 20 per cent of the world's economic output, more than half of all global currency reserves and trade is in US dollars. This is the result of the 1944 Bretton Woods agreement, the effect of which was enhanced when the link between the greenback and gold ended in the 1971 Nixon shock, allowing America to control the supply of the currency.


    Currency warfare: The US dollar's position as world currency gives America disproportionate power.CREDIT:PHIL CARRICK
    The dollar's pivotal role - an "exorbitant privilege," in the term coined by then French Finance Minister Valéry Giscard d'Estaing in 1965 - allows the US easily to finance its trade and budget deficits. The nation is protected against balance-of-payments crises, because it imports and services borrowing in its own currency. American monetary policies, such as quantitative easing, can influence the value of the dollar to gain a competitive advantage.
    Weaponising payment flows



    But the real power of the US dollar is its relationship with sanctions programs. Legislation such as the International Emergency Economic Powers Act, the Trading With the Enemy Act and the Patriot Act allow Washington to weaponise payment flows. The proposed Defending Elections From Threats by Establishing Redlines Act and the Defending American Security From Kremlin Aggression Act would extend that armory.
    When combined with access it gained to data from Swift, the Society for Worldwide Interbank Financial Telecommunication's global messaging system, the US exerts unprecedented control over global economic activity.
    Sanctions target persons, entities, organisations, a regime or an entire country. Secondary curbs restrict foreign corporations, financial institutions and individuals from doing business with sanctioned entities. Any US dollar payment flowing through a US bank or the American payments system provides the necessary nexus for the US to prosecute the offender or act against its American assets.
    Our currency, but your problem.
    US President Richard Nixon's Treasury secretary John Connally Jr.
    This gives the nation extraterritorial reach over non-Americans trading with or financing a sanctioned party. The mere threat of prosecution can destabilise finances, trade and currency markets, effectively disrupting the activities of non-Americans.


    The risk is real. BNP Paribas paid $US9 billion ($12.5 billion) in fines and was suspended from dollar clearing for one year for violating sanctions against Iran, Cuba and Sudan. Other banks including HSBC Holdings, Standard Chartered, Commerzbank and Clearstream Banking have paid large fines for similar breaches.
    RELATED ARTICLE

    CURRENCIES

    Out-of-favour Aussie is acting like an emerging-market currency


    Add to shortlist


    Secondary sanctions made it difficult for United Co. Rusal to refinance dollar borrowings when global businesses, banks and exchanges were forced to stop dealing with the Russian company.
    Its bonds and shares plunged, even though the company sells only 14 per cent of its products in the US, does not use American banks, and is listed in Moscow and Hong Kong.
    ZTE Corp., a Chinese electronics company, was hit hard by the inability to buy essential components from suppliers because of sanctions for trading with North Korea and Iran.


    In these cases, the entity was not in violation of laws where it was domiciled or operated, and the proscribed acts took place outside the US.
    No way out

    China, Russia and increasingly Europe want an alternative reserve currency system. The problem is that immediate replacement of the dollar is difficult.
    First, the euro, the yen, the yuan and the ruble are not realistic options. The euro's long-term future and stability isn't assured, while Japan's economy remains trapped in two decades of torpor. The Chinese and Russian political and economic systems lack transparency, and the yuan isn't fully convertible.
    Second, the required change in infrastructure is daunting. Foreign-exchange markets where the US dollar is the currency of reference would have to be fundamentally restructured. Deep and liquid money markets to support a reserve currency can't be conjured up overnight.


    Third, most candidates are reluctant to take on the role of a global reserve currency because of tensions between national and global economy policy. The economist Robert Triffin pointed out that the country whose medium of exchange is the global reserve currency must meet external demand for foreign exchange. This necessitates running large trade deficits, requiring fundamental changes in the mercantilist policies of Germany, Japan and China.


    This means that the US can continue to use its currency to help further its trade, financial and geopolitical aims, largely outside the strictures of international laws and institutions and without the need for messy, unpredictable military campaigns. As John Connally Jr., Richard Nixon's Treasury secretary, put it in 1971: The dollar is "our currency, but your problem."
    Source: https://www.smh.com.au/business/mark...07-p502d7.html

    Naturally such a setup is unsustainable, especially given the conduct of the US elites these past few years, and hiding behind an outsider to get away with the rogue nation actions of the USG.

    Quote Originally Posted by Coughdrop addict View Post
    Honest question Exarch. What is your grudge against the US and it's citizens? Because your posts make me think that this isn't merely criticism, deserved or otherwise, about US policies. This feels personal for you.
    Quote Originally Posted by Ghengis Khan
    I am the flail of god. Had you not created great sins, god would not have sent a punishment like me upon you.”
    But in all honesty, i have no grudge against america; i've slept with many american women and enjoy american food and movies and tv shows.

  13. #13
    AqD's Avatar (~‾▿‾)~
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    Default Re: What if the world treated the U.S. like a rogue state?

    Quote Originally Posted by Exarch View Post
    That exorbitant privilege was used and abused by previous US administrations who didn't want a recession to occur on their watch; it's only natural that other nations would tire of having their earnings inflated away or having to deal with US fiscal irresponsibility.
    "The USD is our currency and your problem" was the common refrain from arrogant american mandarins.

    Source: https://www.smh.com.au/business/mark...07-p502d7.html
    A recession in US would hurt nearly everyone.

    On the other hand, some countries could get better off with a weakened China, restoring their low tech industries and housing prices.

  14. #14

    Default Re: What if the world treated the U.S. like a rogue state?

    Quote Originally Posted by AqD View Post
    A recession in US would hurt nearly everyone.
    Thanks to the trade war, China is divesting itself from US contagion.

    On the other hand, some countries could get better off with a weakened China, restoring their low tech industries and housing prices.
    Thankfully, the Chinese have been inoculated from any such attempts; white supremacists can dream all they want but the NBA/Blizzard fiasco underlines the reality that the Chinese market is more important than the American market.

  15. #15

    Default Re: What if the world treated the U.S. like a rogue state?

    Given how US is already viewed as a threat by majority of the world (at least that was the fact during previous administration where under Obama US committed a number of war crimes and de-stabilized the world), If isolationists down't triumph in US, then it will be a de-facto rogue-state for all intents and purposes..

  16. #16

    Default Re: What if the world treated the U.S. like a rogue state?

    Quote Originally Posted by Exarch View Post
    Thankfully, the Chinese have been inoculated from any such attempts; white supremacists can dream all they want but the NBA/Blizzard fiasco underlines the reality that the Chinese market is more important than the American market.
    What do you mean? US GDP is about a quarter of worldwide GDP; China is about 15%. If I could only have access to one market, I would choose the US market.
    They give birth astride of a grave, the light gleams an instant, then it's night once more.

  17. #17

    Default Re: What if the world treated the U.S. like a rogue state?

    Quote Originally Posted by The spartan View Post
    What do you mean? US GDP is about a quarter of worldwide GDP; China is about 15%. If I could only have access to one market, I would choose the US market.
    Then you would lose and have to sue for bankruptcy.
    China’s giant middle class is still growing and companies from Walmart to start-ups are trying to cash in
    Source: https://www.cnbc.com/2019/09/30/chin...s-want-in.html
    And given current rates, China will eclipse the US; it's a matter of years now, not decades.


    America's business leaders aren't stupid; none of US business groups supported this trade war and only a charlatan economics major would even think it was a good idea, which given the current composition of the US trade representatives, isn't too far a stretch of the imagination.

    As usual, it's the American people who are the last to receive the memo: China is here and it's big and it's here to stay; no amount of boycotts are going to work, China dwarfs the american market and the those calling for boycotts will simply have to live in China's shadow for the rest of their lives.

    Any sort of sanctions against the US is going to require Chinese cooperation; it's really up to China whether or not the US resumes as a superpower or not.

  18. #18

    Default Re: What if the world treated the U.S. like a rogue state?



    China has a long way to go before it comes anywhere to overtaking the democratic world in terms of wealth.

  19. #19

    Default Re: What if the world treated the U.S. like a rogue state?

    Quote Originally Posted by ep1c_fail View Post


    China has a long way to go before it comes anywhere to overtaking the democratic world in terms of wealth.
    Any scientist/economist knows the key thing to look for are trends, and the trends show the rate at which China's growing, it will eclipse the US around the 2020s. It already surpasses the US in PPP basis, hence why standard of living in Tier 1 cities are comparable if not higher to New York and why the PLA can afford carriers, stealth drones, state of the art ICBMs for a fraction of the Pentagon's budget.

    But young people don't care about facts and figures, so here's a more recent striking eg of China's economic power: Blizzard canned employees who got political about HK and the NBA kowtowed to China. Expect more of the same examples in the future as American companies navigate the future where the Chinese consumer is paramount and more important that the American consumer.

  20. #20

    Default Re: What if the world treated the U.S. like a rogue state?

    Quote Originally Posted by Exarch View Post
    Thanks to the trade war, China is divesting itself from US contagion.


    Thankfully, the Chinese have been inoculated from any such attempts; white supremacists can dream all they want but the NBA/Blizzard fiasco underlines the reality that the Chinese market is more important than the American market.
    Unlike China, minorities have reached the highest levels of the power. In China see minorities in neither positions of wealth nor power. Unlike China, rhe US is truly a multi-racial society. Oprah is one of the richest women in the US and Obama was president. Tell what positions of power have any of the many minorities that live in China reached?

    And so what if China is a more important market? The US is still an important market. And if the US is no longer on top, so what? The Wheel of Fortune turns. You could have written the history of science and invention for the proceeding 200 years before 1969, and leave China out, not missing anything important. The US doesn't need to display its military hardware to the world in ostentatious parades, and the US would rather share pictures of of the moon landing and pictures of Pluto and the Hubble Telescope with the world than show off all its weapons. No nation nation can remain number one forever, and the list of achievements the US has made is one any nation can be proud of.

    In your boasting, you can ponder the r fact that China still hasn't landed on the moon, and even if China were to land men tomorrow, if would be like China inventing the Wright Brother's plane while thd US had jets already. The Chinese weapons do look impressive on paper, but the US has had a lot fighting tough does who were well armed, while China's experience has been in defeating poorly armed Tibetans. Against the Vietnamese, China did not do as well. Real world combat experience counts fornsomething, and there is where China is seriously lacking, except against unarmed protesters. Other than occupying Tibet, and a brief rather unsuccessful invasion od Vietnam, China hasn't had a lot of combat experience.



    Thr Chinese thought they were superior in the 19th century too, when the were first crushed by the British twice, then by the Japanese.

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