by noirscape | 2025-08-21 11:21:13+00:00
Most of the US's power is contingent in part on them not rocking the boat too much. That's what the current US administration is destabilizing; by harming its own allies, those allies in turn are starting to look for other options. With the exception of IT software, the US has little dominance in any individual sector. IT hardware largely isn't produced in the US, it's produced in Taiwan (TSMC) and Europe (ASML), and then assembled in China.

Payment services aren't a source of US power, they're a consequence; the US allowed itself to be a delivery market, making those payment services a soft requirement for anyone dealing with the US. If anything, the US payment networks are generally seen with scorn outside the US; they're painfully dated (US banks largely rely on a system designed for physical cheques to this day) and the companies running them are often subject to the whims of astroturfing activists, resulting in legal transactions being blocked because someone thinks buying porn is icky, even though it's legal. US payment companies are also notorious for being hard to get a hold of to enforce your rights as a customer; Paypal has to follow several EU laws, but they mostly dodge enforcement by putting their HQ in Luxembourg, which is so small that they can effectively employ all well-paid financial lawyers in that country, leaving any duped customers with very little options because of conflicts of interests.

Most of the worlds dependence is on the US as a delivery market; if the US stops being attractive (ie. because it's too expensive bc of tariffs for US importers to buy goods), then the world will gradually compensate, even if it is economically unpleasant for a while. The only other dependence is military, but don't worry there; the US is doing a great job making it's military allies realize that it's bad at helping them, since POTUS is actively interested in working with the enemies of the US instead.

Offshoring is going to become more common because of how the tariffs are blanket rates; if I am going to make a product, there's only two possible options to avoid tariffs as much as possible: only import primary goods to the US and process everything on-site (keep in mind, you're still paying a tariff for even these materials). That's very expensive, in part because American labour is expensive. It's also not very realistic; your average product these days flies it's components across several countries before it ends up being put together. Even if you source all your manufacturing locally, you're still dealing with the fact your suppliers don't. The other option is to... just pay the tariffs at the end of the supply chain. Raise prices on US customers, try to route your entire production chain around the US. That's what the great brands are doing right now. They aren't going to publicly declare price increases if they can help it (because the risk of political retaliation is real under the current US administration), but expect the next products in their pipeline to have significant price increases to make the customer eat the tariffs. This in no small part happens also because ultimately, the tariffs are seen as temporary; moving a production pipeline entirely to the US can take up to a decade. Most companies are assuming that the tariffs will be gone in ~3.5-4 years when the administration leaves. That's not worth setting up a real production pipeline for in the US.