US Global Dominance Faces Mounting Structural Pressures: FT

By Al Mayadeen English

Source: Financial Times

Mounting debt, militarization, tariffs, and weakening trade structures are raising concerns over the long-term stability of US global dominance.

The United States’ position as the world’s dominant power is increasingly facing pressure from mounting debt, weakening trade structures, and shifting geopolitical realities, according to an opinion analysis by Pimco co-founder Bill Gross for the Financial Times.

Gross argues that the foundations of US “hegemonic” power, built over decades through free trade, military supremacy, and dollar dominance, are showing signs of structural deterioration amid deepening fiscal and geopolitical strains.

It describes American global leadership as dependent on continuous economic and political maintenance rather than permanent superiority, warning that several of the conditions that historically enabled Washington’s dominance are now eroding.

“Pax America requires continued maintenance and favourable government policies that promote its number-one status,” Gross states.

Debt expansion and military spending strain US power

The analysis identifies expanding fiscal deficits as one of the clearest indicators of declining US stability, pointing to widening trade and budget deficits that have reached roughly 6% of GDP annually in recent decades.

Structural obligations linked to healthcare and social security spending are also expected to place additional long-term pressure on US finances, alongside sustained military expenditures.

Citing Congressional Budget Office projections, Gross notes that US public debt is expected to rise from 101% of GDP in 2026 to 120% by 2036, exceeding levels recorded immediately after World War II.

Gross further links these pressures to military expansion and overseas confrontations, including the costs associated with the war on Iran.

The article argues that the financial burden of war “is likely to far exceed” the $29 billion estimate already discussed by US military officials, while warning that Washington’s long-term military commitments will continue driving expenditures higher.

Tariffs and protectionism weaken free-trade foundations

Gross states that another central pillar of US dominance, free trade, has been significantly undermined through tariffs and protectionist economic measures introduced during the Trump era.

While tariffs were promoted domestically as part of an industrial revival strategy, the analysis states that they have failed to meaningfully reduce trade and fiscal imbalances.

“The reversal of free-trade policies has led to a weak dollar,” the piece states, noting that the trade-weighted DXY dollar index had declined by roughly 10% over the past 18 months.

Gross also argues that current US economic growth is disproportionately dependent on artificial intelligence-driven capital investment rather than broad industrial expansion.

China challenge and the 'Thucydides Trap'

The FT opinion piece further links concerns over the US decline to the rise of China as a competing global power.

It references a reported discussion between Chinese President Xi Jinping and US President Donald Trump earlier in May, during which Xi invoked the concept of the “Thucydides Trap”.

The phrase references the ancient Greek historian Thucydides’ argument that war between Athens and Sparta emerged from the fear generated by the rise of Athenian power.

According to Gross, the reference signaled Beijing’s long-term strategic outlook regarding global leadership, contrasting with what it characterized as the short-term orientation of current US policymaking.

Financial markets reflect concerns over decline

The FT article argues that financial markets are increasingly reflecting concerns over what it describes as “hegemonic decay”.

It notes that yields on 30-year US Treasury bonds have risen in recent months despite historically weak inflation-adjusted returns.

According to Gross, growing concerns over future government liabilities and long-term structural instability, not inflation alone, are contributing to investor anxiety surrounding US debt markets.

The article further warns that continued erosion of confidence in US fiscal stability could weaken one of Washington’s central instruments of global influence: the dollar’s reserve currency status.

AI and the future of global power

Gross speculates that future global dominance may ultimately move beyond traditional nation-states altogether.

While acknowledging China’s geopolitical ambitions, he argues that artificial intelligence could emerge as a defining hegemonic force depending on who controls its development and infrastructure.

“Another hegemon may replace America and China as well,” the article states. “It goes by the name of AI.”