Why the U.S. Would Lose Its Grip as World Power Under Donald Trump’s Watch

Why Nations Fall by Daron Acemoglu and James A. Robinson, the book I’m currently reading, is a fascinating body of economic analysis that, surprisingly, challenges preconceived notions on the reason why some nations fall while others succeed.

What I found most intriguing about the book is its strong point against some of the theories of renowned economist Thomas Sowell, whose book, Wealth, Poverty, and Politics—my favorite read of last year—suggests that the reasons why some groups prosper economically more than others hinge on simple factors like cultural values, geographical positioning, and climate.

Acemoglu and Robinson believe otherwise and appear to show that the reason why nations fail or prosper is closely tied to two of these factors: extractive political systems, extractive economic systems, inclusive political systems, and inclusive economic systems.

Extractive systems run on the idea that a few powerful elites control the political and economic institutions in their countries with the intent of extracting as much gain as they can for the benefit of the elite. This, the duo argues, was the reason why the Soviet Union collapsed and why most countries, particularly in Africa, remain poor. Another idea they propose about why nations fail is the lack of what they call political centralization—the inability of countries to establish a form of governance that allows them to enforce law and order. Their case studies include Sudan and Somalia.

I do not quite agree with their downplaying of the critical role that culture and geography play in the prosperity of nations, but their arguments on how inclusive systems—political centralization that allows the ruled to play a part in how they are governed, and liberal economics—are too strong to be ignored. Frankly, their arguments seem to suggest that in the near future, some countries, like the United States, might fizzle out as the ‘world power.’

This is because both books referenced here, despite their disagreement on core theories, appear to suggest that countries that are receptive to other people’s ideas and willing to conduct business beyond their borders tend to prosper over time.

The reason why the U.S. is great is because of its open-door market policy. China, which led the world in some ancient discoveries, was only able to begin the mass lifting of its citizens from extreme poverty after it embraced cross-border trade with minimal restrictions.

I mention this because the orange-haired convicted criminal in the White House and his tariffs will impact Americans so much that in 10 years, they’ll begin to wonder how the decline happened so swiftly.

Imposing tariffs on imports is only beneficial when your country is self-sufficient in the said product.

Check this out:

68% of crude imports to the U.S. come from Canada and Mexico.

Mexico accounts for nearly 40% of U.S. car imports.

75% of delivery trucks in the U.S. come from Mexico.

38% of computers used in the U.S. come from China.

Also Read: Tariff War: How Much Trade Does the U.S. Have with Canada, Mexico, and China?

But when Donald Trump speaks, he talks as if these countries are leeches on the U.S., without caring to tell his ignorant, delusional followers that trade is a two-way street. The reason car manufacturers prefer to set up their factories in Mexico rather than in the U.S. is simple—labor costs!

Now, for Elon Musk, the erratic billionaire who appears to be under some sort of spell from the convicted criminal—his Tesla shares are losing value. His car company has lost nearly 50% of its value in the last three months.

There’s more. For his internet company, Starlink, Canada is his second-largest market, with over 530,000 users. They’ve canceled their contract with Elon. Guess his third-largest market? Mexico, with over 430,000 users.

My point is this: when you wake up one morning and start throwing stones, thinking you are untouchable, your friends will form an alliance with your foes. And it’ll happen to the U.S. Trump talks as if, in all these trades, the countries the U.S. imports from gain the most.

Lol. History says otherwise.

Time will tell.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of Neusroom.