WE ARE NOW WITNESSING a historic crisis of the American empire. However, this crisis does not arise from the decline of American capitalism, inter-imperial rivalry, or a Global South insurgency. To be sure, Trump’s trade wars and humiliation in Iran have exposed the limits of unilateralism, while the rise of China poses a substantial economic and political challenge. But none of this has weakened the dollar’s role as world money, the profitability of US corporations and their control over global value chains, or even American military hegemony.
While threats of “de-dollarization” from Iran and the BRICS point to growing distrust of American power worldwide, these are very far from being realized. And despite the destabilization of Trump’s trade wars—and the bipartisan objective of containing China—globalization is not being substantively rolled back, nor has any credible successor to US leadership emerged. Indeed, far from representing a hegemonic alternative to the US empire, China’s growth model depends on the dollar system that is one of its major pillars.
However, while the foundations of the US empire remain largely intact, the state is increasingly unable to legitimate that power at home or abroad. In fact, Trumpism emerged from a political crisis generated by the unchallenged strength of capital—a crisis of the state stemming from its inability to contain the contradictions of successful accumulation.
Indeed, on the eve of Trump’s reelection, the economy was by all appearances performing exceptionally well: the Economist declared that the US economy had become “bigger and better than ever,” while the Financial Times saw it as “the envy of the developed world,” and “soaring ahead of its rivals.”1“America’s Economy is Bigger and Better Than Ever,” The Economist, October 17, 2024; Valentina Romei, William Crofton and Colby Smith, “Why America’s Economy is Soaring Ahead of its Rivals,” Financial Times, December 3, 2024. It should come as no surprise to Marxists that this “success” was achieved at the expense of the working class. While it has been highly profitable for capital, the social costs of empire at home—the defeat of labor, deindustrialization, soaring inequality and growing precarity, and the hollowing out of democracy—paved the way for a populist MAGA backlash within a state that remained formally democratic.
Declinist accounts tend to imply that, insofar as Trump is aiming to reverse American decline, his actions reflect the “objective interest” of capital.2Benjamin Braun and Cédric Durand, “America’s Braudelian Autumn,” Phenomenal World, May 29, 2025; John Bellamy Foster, “The US Ruling Class and the Trump Regime,” Monthly Review 76, no. 11 (April 2025): 1–22; John Bellamy Foster, “The Trump Doctrine and the New MAGA Imperialism,” Monthly Review 77, no. 2 (June 2025): 1–25; Dylan Riley and Robert Brenner, “Seven Theses on American Politics,” New Left Review 138 (November–December 2022). Yet key sections of capital preferred the Democrats as neoliberal standard bearers to Trump’s chaos.3Alison Durkee, “Trump Vs. Harris Fundraising: Harris Outraises Trump by Nearly 5-to-1 Among Last Minute Big Donors,” Forbes, November 4, 2024; Nicholas Nehamas and Andrew Duehren, “Harris Had a Wall Street-Approved Economic Pitch. It Fell Flat.” New York Times, November 9, 2024; Makena Kelly and Lauren Goode, “Silicon Valley Donors Bailed on Biden. Kamala Harris is Winning Them Back,” Wired, July 22, 2024.
Moreover, insofar as he has delegitimated the empire and pushed other states to protect themselves, Trump has been a problem for capital, which has strongly opposed his trade policies.4“Business Roundtable Statement on US–China Trade Negotiations,” May 10, 2019; “Business Roundtable Statement on Universal Tariffs,” April 2, 2025; Neil Bradley, “Tariffs Rise for American Businesses: Higher Prices Loom for Consumers,” US Chamber of Commerce, July 31, 2025. Understanding Trumpism therefore requires recognizing that capital does not directly control the state. His claims of exceptional autonomy have intensified disarray within the ruling bloc, even as the limits and failures of his strategies have exacerbated the legitimacy crisis.
Neither MAGA nor liberal centrism can address this crisis, which would require a challenge to capital well beyond what either could contemplate. The current period is thus defined by a basic contradiction: the structural centrality of the American state within global capitalism remains entrenched, but it is unable to organize consensus around sustaining that role.
The American “Informal Empire”
Contemporary imperialism cannot be understood as the domination of particular peripheral regions by distinct national capitalist classes acting through states they control. Rather, it must be seen in terms of the American state’s unique role in managing global capitalism—an “informal empire” composed of formally independent, relatively autonomous states interconnected by cross-border flows of trade and investment.5Leo Panitch and Sam Gindin, The Making of Global Capitalism: The Political Economy of American Empire (London: Verso, 2012).
The emergence of a global capitalism, rather than national or regional capitalisms, depended on the creation of a singular financial and trade system; this, in turn, hinged on the establishment of a common monetary form through which trade, investment, credit creation, and payments could take place. The incorporation of distinct states, each with their own currencies, into an informal empire thus required a specific currency to function as world money. That the dollar came to play this role reflects the power of the US state and the dominance of its corporations.
This empire was established in the wake of the Second World War, as the American state took the lead in setting up the Bretton Woods system. This established a “dollar-gold” standard, with the dollar pegged to gold and all other currencies pegged to the dollar.
The controls and safeguards built into that regime limited certain capital flows, allowing states some flexibility to implement independent fiscal and monetary policies. This provided a stable framework for further integration through the continual reduction of tariffs and trade barriers.
In the 1970s, Bretton Woods was cast aside and replaced by an even more deeply integrated global order organized around the free movement of capital. Fixed exchange rates and capital controls gave way to a more volatile system of floating exchange rates and liberalized financial flows.
Yet severing the dollar’s link to gold did not erode its position as world money. Rather, it gave the dollar system the flexibility required to support the free flow of trade and investment that bound together the seamless world of capital accumulation that was neoliberal globalization.
The US empire was built through the internationalization of capital. Unlike simple trade, foreign direct investment (FDI) meant that foreign capitals became class actors within other social formations, dependent on host states for regulation, taxation, infrastructure, labor discipline, even bailouts.
Foreign investors thereby came to shape class structures and state strategies from within. Meanwhile, domestic capitalists also internationalized, becoming increasingly embedded within global circuits of accumulation. Class relations were reconfigured as capitalist interests across different states were increasingly articulated to the American imperial order, eroding any strictly “national” bourgeoisies.
Far from being marginalized, states were central to this process, securing the conditions for internationalized accumulation within their own borders as employment, growth, and legitimacy all came to be bound up with the reproduction of global capitalism. The American empire was not simply imposed from without but reproduced internally from within other social formations.
Through this process, the American state came to represent not only the interests of its domestic bourgeoisie, but those of global capital, coordinating among states and imposing an international “rule of law” to protect property rights. Crucial for this was the internationalization of the state through networks of free trade agreements and multilateral institutions such as the IMF, World Bank, and WTO.
These were not merely “external” arrangements “between” states, but also transformations of their internal structures, locking governments into liberalization policies and hollowing out democratic institutions that might have enabled popular challenges to domestic and global capital. State power was thus increasingly concentrated in central banks, finance ministries, and trade apparatuses that were insulated from popular pressures as they assumed responsibility for ever wider areas of public policy. In this way, the internationalization of capital, the rising power of integrated global finance, and the emergence of increasingly authoritarian forms of state power were intimately linked.
Indeed, what Nicos Poulantzas termed “authoritarian statism” was essential for imposing the class discipline that was foundational for globalization.6Nicos Poulantzas, State, Power, Socialism (London: New Left Books, 1978), Part 4. The volatile neoliberal floating exchange rate system imposed strict demands on increasingly powerful central banks for continuous intervention to fight inflation and support currency stability. Integrated production across borders required predictable exchange rates in order to ensure that profits could be realized without being destroyed by inflation. This stability, in turn, depended on class discipline, containing wage demands and restraining fiscal policy.
Central banks imposed this discipline by setting interest rates to maintain sufficient unemployment to weaken the bargaining power of workers. This monetary policy austerity reinforced the disciplines of globalization, as workers and states competed for investment and jobs. Finance was pivotal for this, supplying the infrastructure that enabled capital to circulate freely around the world in search of the lowest costs and highest profits.7Stephen Maher and Scott Aquanno, The Fall and Rise of American Finance: From J. P. Morgan to BlackRock (London: Verso, 2024).
The neoliberal state thus turned away from legitimation to serve accumulation—eroding democracy, rolling back welfare programs, eliminating labor and environmental protections, and enforcing wage restraint. Over a half century, wages stagnated or declined; precarity, insecurity, and indebtedness exploded; and working-class communities were devastated by deindustrialization. This mounting social crisis understandably led many to interpret the neoliberal era as marking the “hollowing out” of capitalism through “financialization.”8William Lazonick, “The Financialization of the US Corporation: What Has Been Lost and How It Can Be Regained,” Seattle University Law Review, 36, no. 2 (2013); Cédric Durand, Fictitious Capital: How Finance is Appropriating Our Future (London: Verso, 2017); Greta Krippner, Capitalizing on Crisis: The Political Origins of the Rise of Finance (Cambridge, MA: Harvard University Press, 2012).
On the eve of Trump’s 2016 election, corporate profits reached record heights even as labor’s share of national income plummeted to historic lows.
Yet the decline these accounts predicted never materialized. On the contrary, finance had enhanced the competitiveness of US multinational corporations (MNCs) and entrenched their global dominance. On the eve of Trump’s 2016 election, corporate profits reached record heights even as labor’s share of national income plummeted to historic lows. What this in fact revealed was the fundamental contradiction between the “logic of profit” and the “logic of need”: capital thrived not despite the mounting social crisis, but rather because of it.9Clara Mattei, Escape from Capitalism: An Intervention (New York: Simon & Schuster, 2026).
Tariffs and the Challenge from China
Discontent with the growing costs of empire at home ultimately provided fertile ground for Trump to blame these impacts on “bad trade deals” signed by previous administrations, which he claimed had allowed others to “take advantage of” the United States. On “Liberation Day,” in what appeared to be an outright assault on free trade, Trump imposed sweeping tariffs on allies and enemies alike—starting from a universal baseline 10 percent levy on all imported goods, with higher country-specific rates calculated in relation to each state’s trade surplus with the US.
Trump singled out China above all, whose rise he had long presented as the clearest example of how the rules of world trade perpetuated American weakness—even placing it in a position of dependence on its principal rival. Threatening 100 percent tariffs on Chinese imports, as Trump did, seemed to signal that after decades of capitulation it was finally time to take action and “make America great again.”
Tariffs were part of a strategy for building a national bloc that could support a political break toward the far right and reorganize the bases of legitimation. Such a bloc would consist of sections of small and medium capital, the self-employed and professionalized petty bourgeoisie, and the working class.
Tariffs, it was hoped, would compel MNCs to shift to small US supplier firms and support midsized manufacturers, especially steel. The expansion of domestic manufacturing by these firms, as well as through increased foreign direct investment (FDI), would benefit workers along with petty bourgeois professionals, sole proprietors, and contractors.
The interests of big capital, however, remained closely tied to globalization. Though business lobbied fiercely against tariffs, including at high level meetings between top executives and the administration, Trump was unwilling to immediately back down. He used the autonomy of the executive over trade policy, initially built up to deflect protectionist challenges to globalization, to push through a policy that seemed to threaten it.10Cat Zakrzewski, Jeff Stein, and Andrew Ackerman, “CEOs are Trying to Deal with Trump – Without Becoming Targets,” Washington Post, April 2, 2025.
Trump’s tariffs pointed to a genuine contradiction within the empire. The rise of China marked the emergence of a world in which the American state retained primacy without unipolarity. Chinese state planning allowed it to coordinate investment on a scale few capitalist states could match, resulting in rapid technological development, expanded manufacturing capacity, and leadership in the auto, solar, and battery sectors.
Along with China’s growing geopolitical assertiveness, these advances have constrained the ability of the United States to manage the global system on its own terms. But while Chinese firms have increased their share of value added, American capital remains dominant within global value chains.
Through control over intellectual property, advanced technologies, logistics, branding, and financial and trade infrastructures, American MNCs appropriate value from global value chains even if production takes place in China or elsewhere outside the US. Partly as a result, they continue to top lists of the largest and most profitable firms.11See Forbes “Global 2000,” 2026.
China’s ascent was in fact a direct result of its integration within global circuits of accumulation, including massive inflows of FDI and the offshoring strategies of American and other MNCs seeking to reduce costs. But this integration was shaped by state planning, which helped build national firms and coordinate investment on an extraordinary scale.
Chinese firms export goods to the global economy, generating large trade surpluses. These surpluses, along with bank credit, corporate debt, and state revenues, are then channeled into fixed capital and technology. This raises productivity, while the resulting mechanization reproduces a relative surplus population that holds down labor costs—thereby generating relative surplus value for Chinese capitalists and foreign investors alike.
The state planning regime at the center of this accumulation model depends entirely on capital controls that limit the movement of money into and out of China. These controls are necessary to preserve the capacity of the state to direct credit, shield the economy from the destabilizing impacts of global financial flows, and protect domestic firms from foreign takeover.12Michael Pettis, “Is China’s High-Quality Investment Output Economically Viable?” Carnegie Endowment for International Peace, April 29, 2026.
But these same controls also limit the renminbi’s ability to rival the dollar. The renminbi can circulate regionally and play a role in trade between China and its partners as well as among states seeking insulation from US sanctions. In order for it to serve as world money, however, China would have to liberalize its financial system—which would undermine the planning regime driving its ascent.13Costas Lapavitsas, “A Topography of the New Dollar Imperialism,” New Left Review 157 (January–February 2026): 107–35.
China’s rise thus does not take the form of a self-contained, independent imperial order steadily displacing an American one, but has depended on the liberalized dollar system, which allows it to access global finance without itself fully opening its capital account. Chinese nonfinancial firms finance accumulation by borrowing on global dollar markets, where costs are substantially lower.
China’s rise thus does not take the form of a self-contained, independent imperial order steadily displacing an American one.
Even Chinese development loans and grants through the Belt and Road Initiative are predominantly dollar denominated—thus integrating recipients more deeply into the dollar system. The larger Chinese capitalism becomes, the more it participates in the dollar system.14Bank of International Settlements, US Dollar Funding: An International Perspective, CGFS Papers No. 65, June 2020.
Unlike the conflict with the Soviet Union, therefore, the challenge from China did not arise from outside the American empire but was produced through it. Nor does this conflict resemble the inter-imperial rivalry described by Lenin a century ago, in which distinct national empires struggle for exclusive control over peripheral areas.
The internationalization of production and finance means that the world cannot be divided into mutually exclusive national imperial blocs. Conflicts among states unfold, and hierarchies shift, within an order structured by the competitive interpenetration of capitals of different national origins, anchored by the dollar.
For tariffs to achieve Trump’s stated aims would require a fundamental transformation of the empire, including restrictions on capital mobility and largescale planning to onshore production. This would undermine the dollar system as well as the competitiveness of US capital itself. Trump clearly lacks anything like the capacity to subordinate internationalized capital to such a national project of industrial reconstruction.
Globalization is by no means coming to an end. World trade has continued to expand, multinational profits are high, and core and peripheral states remain deeply integrated. Moreover, tariffs have not resulted in substantive decoupling between the US and China but have been significantly circumvented by rerouting trade flows and value chains.15Robin Brooks, “China’s Transshipment of Goods to the US,” Brookings Institution, June 20, 2025.
Just as China cannot replace the dollar, so the US cannot decouple from China. However, Trump’s trade wars, and the deeper contradictions within the US empire, have reshaped global capitalism. Tariffs have successfully excluded the products of China’s leading exporters, as reflected in Biden’s selective expansion of Trump’s first term tariffs.
Investment is also becoming more selective and geopolitically sensitive, with capital flows seemingly concentrating in select states with key financial hubs, logistics centers, and advantageous positions in global supply chains. Crucially, the US has been the chief beneficiary of this restructuring. That it remains the leading recipient of FDI, by far, reaffirms that it is not simply one economy among others, but the center of global capitalism.16UNCTAD, World Investment Report, 2025; World Trade Organization, World Trade Statistical Review, 2025.
While tariffs may lead to some onshoring, they also inflated the prices of foreign goods, burdening consumers as well as firms that rely on imported inputs.17Maximiliano A. Dvorkin, Fernando Leibovici and Ana Maria Santacreu, “How Tariffs are Affecting Prices in 2025,” Federal Reserve Bank of St. Louis, October 16, 2025; Yale Budget Lab, State of U.S. Tariffs, April 8, 2026; Chris Weat, Chi Mac, Ole Agersnap and Nick Nears, Exposure to Tariffs for Midsize Firms by Metro Area, JP Morgan Chase Institute, July 2025. Trump was also constrained by the resilience of authoritarian statism. The courts’ limits on emergency tariff powers and protection of Fed independence reinforced the constitutionalization of free trade and the insulation of monetary policymaking from “political interference,” ensuring that the autonomy of the state would remain strictly relative.18The “Fed” is short for the Federal Reserve Bank of the United States, the nation’s central bank.
While this allowed supposedly “apolitical” institutions to continue imposing the conditions for internationalized accumulation, it only deepened the legitimation crisis. The judiciary checked Trump on matters of trade and monetary policy but supported his immigration crackdown and allowed the Republican Party to tighten its grip on the electoral apparatus—thereby further undermining its credibility to both liberals and the Right.
The court’s red lines were clearly drawn not to protect democracy, but accumulation. Tellingly, American capital largely shared this mindset.19Reuters, “Industry Reaction to US Supreme Court Ruling on Trump’s Global Tariffs,” February 20, 2026. Amid deepening political crisis, the veneer of technocratic neutrality became ever harder to sustain.
Iran and the “Petrodollar” Myth
Many suggest that, especially following the US attack on Iran, the dollar is facing a challenge from the unravelling of the so called “petrodollar” system. Such speculation is based on the notion that US empire rests on a “hydrocarbon-dollar complex” linking global dependence on fossil fuels and the trading of those fossil fuels in dollars.20Mona Ali, “The Reckoning,” Equator, June 4, 2026; Richard Wolff, “Richard Wolff on the Left’s New Openings in 2026,” Jacobin, July 16, 2026; Radhika Desai and Michael Hudson, “Swap Lines, Gulf Debt, and the Unravelling of Dollar Primacy,” Brave New Europe, May 14, 2026.
Because dollars are needed to purchase the critical energy source that powers the global economy, the argument goes, oil is an essential source of demand for dollars. And because oil revenues are recycled into US financial assets, petrodollars help maintain the liquidity of the markets on which the power of the dollar depends.
From this perspective, Iran’s threats to move its oil trade into renminbi are seen as the spearpoint of a wider rebellion by the Global South—embodied especially in the BRICS, of which Iran is now a member—against the US empire through “de-dollarization.” This threat was seemingly intensified as Iran’s blockade of the Strait of Hormuz supposedly accelerated a move toward Chinese clean energy technologies.
But despite the war, not to mention the broader chaos of the Trump presidency, there is little indication that the dollar’s position is going anywhere soon. Central banks around the world hold dollar assets to support their ability to conduct trade and stabilize exchange rates.
While the dollar’s share of global reserves has fallen during the Trump years, it remains overwhelmingly dominant, constituting 57 percent of official holdings, compared to the renminbi’s less than 2 percent. Though this may look low in relation to recent highs, this figure is well within the historic norm, close to the level of the mid 1990s.21Carol Bertaut, Bastian von Beschwitz and Stephanie Curcuru, “The International Role of the US Dollar – 2025 Edition,” FEDS Notes, Board of Governors of the Federal Reserve System, July 18, 2025.
That the dollar continues to be widely seen as a source of stability and safety is especially remarkable given that it is now the American state which has become the primary source of instability in the world system. As if to underscore the reality of the persistence of US structural power amidst political weakness, this was based in no small part on the exceptional performance of American capitalism, even as few of the benefits of this economic strength were passed on to workers.22Kate Duguid, “Investors Pile into Bullish Dollar Bets as ‘US Exceptionalism’ Trade Returns,” Financial Times, June 17, 2026.
Petrodollar arguments get the causal order backwards. The dollar is not world money because oil is priced in dollars; oil is priced in dollars because the dollar is world money. Indeed, petrodollars comprise a very small portion of global dollar deposits.
Even at their peak in the 1970s, residents of major oil exporting countries accounted for about 13 percent of the deposits of the Bank for International Settlements (BIS) reporting banks. By 2005, this share had fallen to only 3 percent even amid a major oil price boom; if we exclude interbank deposits, it was smaller still.23Patrick McGuire and Nikola Tarashev, BIS Quarterly Review, December 2005. Yet by 2025, dollar credit to nonbank borrowers outside the US had reached $14 trillion, while the dollar’s dominant share of foreign currency bank claims and liabilities remained broadly stable.24BIS, “Global Liquidity Indicators at End–September 2025,” January 2026.
Similarly, between 1999 and 2019, the dollar accounted for 96 percent of all trade invoicing in the Americas, 74 percent in the Asia Pacific region, and 79 percent in the rest of the world, excluding Europe. In fact, use of the dollar in private transactions actually increased even as oil exporters’ role as bank funders diminished.25Bertaut, von Beschwitz, and Curcuru, “The International Role of the US Dollar–2025 Edition”; Engin Yilmaz, Boran Bodur, and T Sabri Öncü, “Dollar, Eurodollar, and the Myths of Petrodollar and De-Dollarisation,” May 16, 2026, available at ssrn.com/abstract=6815058. Clearly, then, oil cannot account for the dollar’s global role.
The dollar is not world money because oil is priced in dollars; oil is priced in dollars because the dollar is world money.
The dollar system is in fact credit driven. Debt is just as important, perhaps even more fundamental, for fueling global capitalism as is fossil energy. It is the operation of the credit system at a world scale, itself inscribed within the American empire, that accounts for the dollar’s international role.26Committee on the Global Financial System, “US Dollar Funding: An International Perspective,” CGFS Papers No. 65, Bank for International Settlements, June 2020.
Global capitalist production requires a monetary infrastructure capable of providing liquidity, collateral, risk management, and safe assets across jurisdictions. The organization of the global credit system around the dollar means that the balance sheets of financial firms, nonfinancial firms, and central banks are tied to dollar obligations and assets.
Moreover, critical funding and hedging markets—repo markets, foreign exchange markets, wholesale bank markets, private bond markets, and derivatives markets—all pivot around the dollar. Dollar dominance is not simply a matter of what currency is used to price a particular strategic commodity; it is embedded within the credit relations through which global production is financed and sustained.
This also means that although the dollar is the overwhelmingly dominant reserve currency, its status as world money rests on much more than official holdings. Critical for this is the depth and liquidity of offshore dollar markets, often referred to as “Eurodollar” markets, which serve as world money markets.
The interpenetration of the dollar across states links national banking systems into an international financial architecture. Offshore banks do not merely pool “imported” dollars to be lent out or spent later but rather create dollar credit.27Rudy Bouguelli, “The Blind Spot of Endogenous Money: Global Banking and the Eurodollar Market,” Cambridge Journal of Economics 49 (2025): 655–73; Flavia Dantas, “Eurodollar Endogeneity and Global Financial Fragility,” Working Paper.
Banks generate credit by issuing new monetary claims; central banks in turn supply banks with liquidity to meet demand for loans at their target interest rates.
Banks are effectively extensions of state economic apparatuses, privatizing the expansion of the money supply under the supervision of central banks. But central banks can only issue the currencies of their own states.
While foreign banks can create dollar-denominated credit, they cannot create the “real” dollars, reserves, through which banks must settle obligations. The creation of offshore dollar credit therefore depends on access to dollars through New York branches, correspondent banks, and ultimately the Fed.28Marcia Stigum and Anthony Crescenzi, Stigum’s Money Market, Fourth Edition (New York: McGraw–Hill, 2007).
The US imperial system establishes a hierarchy of national monies and the banking systems and states that issue them.29Steffen Murau, Fabian Pape and Tobias Pforr, “International Monetary Hierarchy through Emergency US-dollar Liquidity: A Key Currency Approach,” Competition & Change 27, no. 3–4 (2023). Some national monies stand higher in this hierarchy because they are more widely accepted as measures of value, means of circulation and payment, and stores of value.
The dollar’s place at the apex of the system means that the more reliably currencies can be converted into dollars, the more fully they approximate the function of world money: the universal equivalent at the world level. In moments of crisis, this hierarchy is starkly revealed, as states, banks, and firms everywhere scramble for dollars.
In such moments, the Fed extends dollar “swap lines” to selected foreign central banks to stabilize national components of the international financial architecture. Dollar dominance is thus reproduced through a hierarchy of capitalist states organized around dollar liquidity, access to New York markets, and the Fed’s unique function as the world central bank.
Transforming this global institutional complex would require more than a momentary shift in investor “vibes,” but would entail an upheaval that is nowhere on the immediate horizon. Despite much wishful thinking, the BRICS by no means offer an alternative—lacking a central bank or any internal political or economic coherence.
Russia, meanwhile, is a small economy, about the size of California, with little capacity to mount a systemic challenge. China, as we have seen, remains firmly rooted in the dollar system as a condition of the very growth that supports its rising geopolitical power.
More broadly, the primary lessons of the Iran war as regards the BRICS are not very encouraging, as some members supported the assault on fellow member Iran: the UAE bombed Iran directly, Saudi Arabia privately urged Trump to expand the war, and India was compromised by the sinking of an Iranian warship that had been participating in naval exercises there.30Summer Said and Anat Peled, “The UAE’s Secret Role in the War Involved Dozens of Strikes on Iran,” Wall Street Journal, May 29, 2026; Julian E. Barnes, Tyler Pager and Eric Schmitt, “Saudi Leader is Said to Push Trump to Continue Iran War in Recent Calls,” New York Times, March 24, 2026; Sheikh Saaliq and Krishan Francis, “Iranian Warship was Sailing Home from India Exhibition when US Sank It,” Associated Press, March 5, 2026. No alternatives; yet no denying the disastrous impact of the war for the legitimacy of US power around the world.
From Multipolarity to Class Struggle
Vague discussions of “multipolarity” are quite insufficient for understanding conflict and cooperation in the world system. Rather than gesturing toward the obvious reality of geopolitical tensions, it is necessary to specify the underlying bases of patterns of integration and fragmentation, centralization and decentralization, that characterize contemporary global order. As we have seen, neither China nor a coherent “bloc” of states in the Global South offers a genuine alternative to the US empire.
China may be a major productive, technological, and even geopolitical rival to the US, but there are structural limits to the challenge it can pose, or would want to pose, given the extensive dependence of its own economic ascent on the American empire. Similarly, the experience of the BRICS has shown nothing if not the degree to which these states and capitalist classes are integrated within that empire, dependent as they are on international dollar markets as well as the global production chains, dominated by US multinationals, that are integrally linked with them.
The nature of American power must itself be clearly specified. A crucial foundation of the ongoing centrality of the American state to global accumulation is the strength of US capitalism, which continues to significantly outperform the other core economies.
US multinationals have been ferociously competitive in developing advanced technologies as well as slashing costs through the construction of the internationalized production networks that are a major basis of the US empire and the dollar system. The dollar remains strong; US multinationals remain the most profitable and competitive, continuing to dominate global value chains while American economic performance continues to surpass expectations; and, despite its inability to fully subdue Iran without a large scale ground invasion, the US military remains uniquely powerful and capable of action on a global scale.
This makes it very hard to sustain the idea that American hegemony is somehow on the verge of collapse. And yet, the American state is increasingly unable to secure the legitimacy of its power.
Trump has sharply intensified this political crisis. His tariffs have led to the evaporation of trust in the ability of the US to steward international trade, which will be very difficult to “undo.” His ill-conceived attack on Iran, despite promises to avoid new wars, has only further undermined consent for American power.
Meanwhile, an ascendant China challenges American unilateralism even as it relies on the US empire, while the US cannot contain China without undermining the global integration on which both that empire, and the competitiveness of its own MNCs, depend. This impasse is reflected in a striking reversal taking shape, as Trump attempts to reach a modus vivendi with China, while Democrats turn from starry-eyed neoliberal rhetoric toward a more hawkish posture of containment, tariffs, and threats.31Michael Martina, David Brunnstrom, David Lawder and Mei Mei Chu, “Trump Returns from China with Stability and a Stalemate,” Reuters, May 17, 2026.
Neither Democrats nor Republicans can resolve this tension at the heart of the empire, focused as they are on national competitiveness and establishing unquestioned US dominance. Rather than facilitating the global cooperation needed to address the existential threat of climate change, both bring us closer to the brink of war.
Despite Trump’s growing unpopularity, MAGA forces now appear firmly in control of one of the two parties that will govern the empire for the foreseeable future. Meanwhile, the Democratic establishment has proven unable to offer a genuine alternative to Trumpism.
This surely portends a more chaotic and violent world, as storm clouds once again gather on the horizon with the return of inflation, exploding fiscal deficits, and possible overexpansion in the tech sector. The political crisis can ultimately be addressed only by ameliorating the devastating impacts on workers of deindustrialization, unprecedented inequality, and growing precarity.
But this requires taking on globalization, and therefore capital itself, which neither the Democrats nor MAGA are willing, or able, to do. Combating the far right, fighting imperialism, and transcending capitalism are three aspects of the same struggle. Rather than looking to rival state blocs, it is class struggle at home that is pivotal for forging an alternative to a grim future of economic immiseration, endless war, and environmental collapse. The need to extend democratic control over the economy is more vital now than ever before. ×
Notes & References
- “America’s Economy is Bigger and Better Than Ever,” The Economist, October 17, 2024; Valentina Romei, William Crofton and Colby Smith, “Why America’s Economy is Soaring Ahead of its Rivals,” Financial Times, December 3, 2024.
- Benjamin Braun and Cédric Durand, “America’s Braudelian Autumn,” Phenomenal World, May 29, 2025; John Bellamy Foster, “The US Ruling Class and the Trump Regime,” Monthly Review 76, no. 11 (April 2025): 1–22; John Bellamy Foster, “The Trump Doctrine and the New MAGA Imperialism,” Monthly Review 77, no. 2 (June 2025): 1–25; Dylan Riley and Robert Brenner, “Seven Theses on American Politics,” New Left Review 138 (November–December 2022).
- Alison Durkee, “Trump Vs. Harris Fundraising: Harris Outraises Trump by Nearly 5-to-1 Among Last Minute Big Donors,” Forbes, November 4, 2024; Nicholas Nehamas and Andrew Duehren, “Harris Had a Wall Street-Approved Economic Pitch. It Fell Flat.” New York Times, November 9, 2024; Makena Kelly and Lauren Goode, “Silicon Valley Donors Bailed on Biden. Kamala Harris is Winning Them Back,” Wired, July 22, 2024.
- “Business Roundtable Statement on US–China Trade Negotiations,” May 10, 2019; “Business Roundtable Statement on Universal Tariffs,” April 2, 2025; Neil Bradley, “Tariffs Rise for American Businesses: Higher Prices Loom for Consumers,” US Chamber of Commerce, July 31, 2025.
- Leo Panitch and Sam Gindin, The Making of Global Capitalism: The Political Economy of American Empire (London: Verso, 2012).
- Nicos Poulantzas, State, Power, Socialism (London: New Left Books, 1978), Part 4.
- Stephen Maher and Scott Aquanno, The Fall and Rise of American Finance: From J. P. Morgan to BlackRock (London: Verso, 2024).
- William Lazonick, “The Financialization of the US Corporation: What Has Been Lost and How It Can Be Regained,” Seattle University Law Review, 36, no. 2 (2013); Cédric Durand, Fictitious Capital: How Finance is Appropriating Our Future (London: Verso, 2017); Greta Krippner, Capitalizing on Crisis: The Political Origins of the Rise of Finance (Cambridge, MA: Harvard University Press, 2012).
- Clara Mattei, Escape from Capitalism: An Intervention (New York: Simon & Schuster, 2026).
- Cat Zakrzewski, Jeff Stein, and Andrew Ackerman, “CEOs are Trying to Deal with Trump – Without Becoming Targets,” Washington Post, April 2, 2025.
- See Forbes “Global 2000,” 2026.
- Michael Pettis, “Is China’s High-Quality Investment Output Economically Viable?” Carnegie Endowment for International Peace, April 29, 2026.
- Costas Lapavitsas, “A Topography of the New Dollar Imperialism,” New Left Review 157 (January–February 2026): 107–35.
- Bank of International Settlements, US Dollar Funding: An International Perspective, CGFS Papers No. 65, June 2020.
- Robin Brooks, “China’s Transshipment of Goods to the US,” Brookings Institution, June 20, 2025.
- UNCTAD, World Investment Report, 2025; World Trade Organization, World Trade Statistical Review, 2025.
- Maximiliano A. Dvorkin, Fernando Leibovici and Ana Maria Santacreu, “How Tariffs are Affecting Prices in 2025,” Federal Reserve Bank of St. Louis, October 16, 2025; Yale Budget Lab, State of U.S. Tariffs, April 8, 2026; Chris Weat, Chi Mac, Ole Agersnap and Nick Nears, Exposure to Tariffs for Midsize Firms by Metro Area, JP Morgan Chase Institute, July 2025.
- The “Fed” is short for the Federal Reserve Bank of the United States, the nation’s central bank.
- Reuters, “Industry Reaction to US Supreme Court Ruling on Trump’s Global Tariffs,” February 20, 2026.
- Mona Ali, “The Reckoning,” Equator, June 4, 2026; Richard Wolff, “Richard Wolff on the Left’s New Openings in 2026,” Jacobin, July 16, 2026; Radhika Desai and Michael Hudson, “Swap Lines, Gulf Debt, and the Unravelling of Dollar Primacy,” Brave New Europe, May 14, 2026.
- Carol Bertaut, Bastian von Beschwitz and Stephanie Curcuru, “The International Role of the US Dollar – 2025 Edition,” FEDS Notes, Board of Governors of the Federal Reserve System, July 18, 2025.
- Kate Duguid, “Investors Pile into Bullish Dollar Bets as ‘US Exceptionalism’ Trade Returns,” Financial Times, June 17, 2026.
- Patrick McGuire and Nikola Tarashev, BIS Quarterly Review, December 2005.
- BIS, “Global Liquidity Indicators at End–September 2025,” January 2026.
- Bertaut, von Beschwitz, and Curcuru, “The International Role of the US Dollar–2025 Edition”; Engin Yilmaz, Boran Bodur, and T Sabri Öncü, “Dollar, Eurodollar, and the Myths of Petrodollar and De-Dollarisation,” May 16, 2026, available at ssrn.com/abstract=6815058.
- Committee on the Global Financial System, “US Dollar Funding: An International Perspective,” CGFS Papers No. 65, Bank for International Settlements, June 2020.
- Rudy Bouguelli, “The Blind Spot of Endogenous Money: Global Banking and the Eurodollar Market,” Cambridge Journal of Economics 49 (2025): 655–73; Flavia Dantas, “Eurodollar Endogeneity and Global Financial Fragility,” Working Paper.
- Marcia Stigum and Anthony Crescenzi, Stigum’s Money Market, Fourth Edition (New York: McGraw–Hill, 2007).
- Steffen Murau, Fabian Pape and Tobias Pforr, “International Monetary Hierarchy through Emergency US-dollar Liquidity: A Key Currency Approach,” Competition & Change 27, no. 3–4 (2023).
- Summer Said and Anat Peled, “The UAE’s Secret Role in the War Involved Dozens of Strikes on Iran,” Wall Street Journal, May 29, 2026; Julian E. Barnes, Tyler Pager and Eric Schmitt, “Saudi Leader is Said to Push Trump to Continue Iran War in Recent Calls,” New York Times, March 24, 2026; Sheikh Saaliq and Krishan Francis, “Iranian Warship was Sailing Home from India Exhibition when US Sank It,” Associated Press, March 5, 2026.
- Michael Martina, David Brunnstrom, David Lawder and Mei Mei Chu, “Trump Returns from China with Stability and a Stalemate,” Reuters, May 17, 2026.