Against the odds

The United States has been calculating the costs and benefits of globalization with the aim of protecting the US hegemony and its national interests. Donald Trump's reelection as US president signals the pursuit of "America First" policies and globalization will face even greater challenges.

During Trump's first term, globalization was already reshaped by the US exit from international systems and multilateral organizations. However, this did not stop or slow economic interactions and integration among other economies. Instead, a new form of exchanges has emerged from the process — a new type of globalization.

The US government's de-globalization strategy aims to secure a special and privileged position for the US in the global economic system, one in which the US intends to enjoy the same or even greater benefits while bearing less costs and responsibilities.

First, the US administration is using tariffs as a tool to exert pressure on other countries. By levying differentiated tariffs, the US attempts to manipulate trade, drive wedges among Global South countries which seek to advance the new type of globalization, and maintain trade relations with low-tariff Global South countries while imposing heavy costs on those countries subject to high tariffs. In doing so, the US seeks to hinder the progress of the new type of globalization.

As the world's largest single-country market, the US remains an attractive trading partner for Global South countries. With varying tariff rates, Global South countries face divergent prospects in the US market, which may potentially alter trade dynamics and create divisions in interests and positions among these nations.

Second, the US views technology and innovation as critical to its national competitiveness and economic growth. As a result, it continues to implement strict technonationalist policies aimed at limiting the technological advancement of other countries.

If Global South nations are unable to harness technology to boost productivity and drive development, new globalization may lose momentum, and Global South countries may risk being marginalized in the international system.

Among Global South countries, China holds the greatest potential to break the US technology blockade, owing to its strong technological capabilities and significant progress across a range of tech fields. The US government therefore has made China its primary target. Taking into account the evolving landscape of technological development and the relative strengths of both nations, the US has tightened export controls, restricted technology investments in China, and curtailed normal technological exchanges — all in an attempt to impede China's technological progress.

The US believes that by restricting the development and application of emerging key technologies in China and other Global South countries, it can weaken the technological foundation of the new globalization and thereby suppress its overall momentum.

Third, the US seeks to weaponize the US dollar. The US-led globalization was built on a "dollar for manufactured goods" model, sustained by the dollar's global dominance. US administrations have always stressed and defended the dollar's supremacy — not just in terms of its rising value, but more importantly, its central role in the global monetary system. As long as the dollar maintains this dominant position, the US can continue to influence the international economic order.

One of the US' major concerns is that the new type of globalization may lead to de-dollarization and weaken the dollar's dominant position, even if that is not an objective of the process. In reality, the greatest threat to the dollar's global position often stems from the US' erroneous policies, such as excessive borrowing or weaponizing the dollar for political purposes, but the US is very reluctant to acknowledge this. Instead, it assumes that as long as other countries continue to use the dollar, its dominant status in the international system will not be undermined.

As a result, the US has expressed deep concern over whether Global South countries will continue using the dollar amid the rise of new globalization. The US administration explicitly demanded that BRICS nations remain anchored to the dollar-based financial system and not create or support any alternative international currency, threatening to impose 100-percent tariffs on countries that choose otherwise. In essence, the US is using punitive measures to coerce other nations into continued reliance on the dollar.

While the US' "reciprocal tariffs "may have short-term impacts on Global South countries, such trade protectionist policies will exacerbate global economic fragmentation and eventually backfire and hurt the US' own interests.

Take the example of the US' technological curbs on China. While the tech blockade has posed challenges to China's tech progress, it has conversely strengthened China's resolve to pursue technological self-reliance, and promoted the development of a tech ecosystem that is increasingly independent of the US.As the US continues to implement tech curbs on China and escalates its strategy from a "small yard, high fence" to a "bigger yard, higher fence", it is a signal of the failure of its technology containment of China.

Similarly, the US policy of enforcing dollar dominance is inherently self-contradictory. The US seeks to reduce trade deficits while seeking to preserve the dollar's global supremacy, which are economically incompatible goals, as the US trade deficit is a precondition for the dollar to maintain its international status.

From a diplomatic perspective, the US' hard-line approach to forcing other countries to use the dollar is counterproductive. Many Global South countries are wary of the dollar, viewing it as a symbol of US hegemony. The US practice of weaponizing the dollar for political purposes has fueled resentment across the world, and the US administration's threats may only accelerate these countries' de-dollarization efforts.

The current US administration's policies are a serious blow to free trade, which serves as the cornerstone of globalization. Going forward, the US-driven globalization and the new globalization jointly built by Global South countries are expected to coexist and compete, requiring all economies to adjust and adapt to the new dynamics.

Regardless of the model of globalization, critical issues, including inclusiveness, the provision of public goods and coordination among major powers must be addressed.

However, the current US policies do not move toward addressing these issues. As the development trajectory of the new globalization does not align with US preferences, the US may take various measures to disrupt its development.

Nevertheless, the new type of globalization has emerged and shows strong vitality. In response to the "America First" model, Global South countries, which are the main promoters of the new type of globalization, must strengthen their internal momentum to increase the attractiveness and influence of it in the evolving global landscape.

The author is deputy director and professor of the Center for American Studies at Fudan University. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.