News Breakdown: In a Changing World, How Will the US Adapt?

By Alexis Trifon

It is no secret that the world is changing. Since the pandemic, many conflicts—and wars—have either escalated or emerged. Buzzwords like “deglobalization” or “the end of soft power” have recently dominated the media cycle too. 

Globalization refers to the interaction and integration of people, trading entities, and governments. The three main types of globalization are economic, political, and cultural. ​​Globalization began to take over the world as the Cold War ended and the USSR collapsed. Economic integration, such as the North American Free Trade Agreement, commenced the neoliberal (free-market) global order that was led by the US. Following the 2008 financial crisis, the US's economic system faced scrutiny, leading to more regulation domestically and a push for state capitalism (like China) over a market economy around the world. Additionally, many Latin American countries abandoned the previous Washington Consensus export-led development principles, which held precedence during the 1980s and 1990s, by electing left-leaning governments, for example, in Venezuela, Bolivia, and Argentina.

In 2024, about two years from the depths of the pandemic, many fear that the world is turning towards deglobalization. However, I would argue that globalization is not ending but rather being restructured. 

Similar to the 1990s, new alliances—and a new, post-neoliberal world order—are forming. The economy has become inextricably linked to geopolitics, resulting in fewer financial flows between countries like the US and China. Additionally, we are seeing the industrialization of “connector economies” (neutral countries between the US and its economic competitors) such as Vietnam, Mexico, and Indonesia.

President Biden, specifically with his Inflation Reduction Act (IRA), has altered the US's relationship with globalization and with the global economy by prioritizing national interests and security. Domestically, Biden is investing in the EV industry, semiconductors, infrastructure, solar energy, and more, with an emphasis on significantly reducing greenhouse gas emissions to reach net zero by 2050. Globally, Biden's IRA aims to bring manufacturing back to the US and limit China's power in production, which marks a shift towards premium, sustainable products over cheaper ones and a reshoring of the supply chain.

The European Union has criticized the Inflation Reduction Act as it encourages European competition in what has been called a “subsidy war.” The IRA also adds to Europe's existing challenges with energy, as they have reduced their reliance on Russian gas since the 2022 invasion of Ukraine.

While the world is changing, which the US has greatly contributed to, we are presented with an opportunity, one that allows the US to revitalize its manufacturing and exporting capabilities through strategic private-public partnerships, counter the decline in democracy, and promote global security.

It is imperative that we do not isolate our European partners nor isolate our responsibility to support developing countries, which have previously been excluded from conversations—and policy—regarding the economy and development. Maintaining steady yet firm relations with China and Russia (both diplomatically and economically) will also be critical to supporting global security and peace.

And, of course, much of the future is contingent on the results of the 2024 presidential election, as well as approximately 94% of the world's population facing a national election. As Time put it "2024 is not just an election year. It's perhaps the election year."

Resources to Help:

https://www.spglobal.com/en/enterprise/geopolitical-risk/evolution-of-deglobalization/ https://www.imf.org/en/Publications/fandd/issues/Series/Analytical-Series/cafe-econ-a-new-political-order-emerges

https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/

https://time.com/6550920/world-elections-2024/