USA's Importance (PDF)

**USA´S IMPORTANCE** **MARITIME ROUTES:** Maritime routes make international trade affordable. Alternative transport methods would be significantly more expensive. - **Suez Canal:** critical for Europe, with 15% of its oil supply passing through it. The closure of this route would lead to a...

**USA´S IMPORTANCE** **MARITIME ROUTES:** Maritime routes make international trade affordable. Alternative transport methods would be significantly more expensive. - **Suez Canal:** critical for Europe, with 15% of its oil supply passing through it. The closure of this route would lead to a crisis in Europe. - **Malacca Strait:** the world´s most important trade route, handling 30% of global trade. Sometimes, it´s used for transporting goods to the eastern USA. The USA´s global power comes from controlling the Atlantic and Pacific Oceans (essential for international trade and transportation). It is the most powerful military economy and military force because of the control of the oceans (they allow to transport things and to go from one place to another, and to control international trade). \*Historically, Spain and Portugal were the pioneers of maritime routes and oceanic governance, later developed further by the British. \*China is emerging as a sophisticated naval power, challenging US dominance. **AIR:** - Only 10% of the global population travels by air - Key players in aircraft manufacturing include Airbus and Boeing, which also contribute to military aviation - The USA controls the military airspace with advanced technologies like the F-15 and F-35 fighter jets Since 1971, no manned moon expeditions have occurred due to a lack of economic incentives. Though China and India have sent robotic explorers to the moon. The satellite industry is the main focus of aerospace development, with competition growing from European and Asian nations. The USA still leads in military technology, but it´s losing ground in commercial aviation and satellite development. **MILITARY:** GLOBAL MILITARY EXPENDITURE: - [Pacifist nations and arms trade:] - Most of the world´s military spending comes from nations that identify as pacifists, such as the US and European countries - A significant portion of this expenditure involves selling weapons to other nations, including those engaged in active conflicts - [The United States as a major arms dealer:] - For the US, war is economically advantageous due to its robust weapons manufacturing industry - The sale of arms to other countries helps sustain the economy, making global conflicts indirectly beneficial for the US THE IMPORTANCE OF THE US MILITARY INDUSTRY: - [Economic dependency:] - The American economy heavily depends on its military industry. Weapon production is a vital component, with major companies like Boeing and Lockheed Martin leading the sector - This dependence aligns the US economy with the continuation of military engagements abroad - [Global military presence:] - The US maintains 270 international military bases, a costly but strategically significant aspect of its global influence - In contrast, Russia operates a much small number of bases, reducing its international military footprint and expenditures PRO-WAR STANCE OF THE US: - [Economic incentives:] given its reliance on military production and expenditure, the US benefits economically from global conflicts. This dynamic positions the country as more inclined toward **pro-war** stance, as peace would reduce demand for its military products - [Naval power and historical importance:] - The US Navy has been crucial in establishing American dominance as a global power - Control over the Pacific Ocean became a turning point, particularly after acquiring the Philippines, solidifying the US as a major player - \*Japan´s attack on Pearl Harbor was driven by its desire to control the Pacific, highlighting the strategic significance of naval dominance NUCLEAR CAPABILITY AND DRONES: - [Nuclear deterrence:] - Russia surpasses the US in nuclear capabilities, possessing the world´s largest nuclear bomb - Despite this, the US relies on its extensive military network and technological advancements for deterrence, ensuring adversaries avoid attacks due to potential consequences. - [The rise of drones:] - Drones are considered one of the most important modern weapons due to their low cost and high precision - They can efficiently destroy specific targets, making them a preferred choice in contemporary military strategies NATO AND EUROPEAN SECURITY: - NATO, while a critical alliance for Europe´s security, heavily depends on US financial and military support - Without American backing, Europe´s military power would be significantly weakened, leaving it vulnerable to threats FUTURE OF WARFARE: CYBERWAR: - In the future, warfare is expected to focus more on cyber technologies than conventional weapons - Cyberwarfare will involve using technological tools to attack or defend critical systems, underscoring the importance of innovation in military technology. \***[Deterrence:]** a nation´s ability to avoid being attacked relies on the perceived consequences of retaliation. The US maintains a strong deterrent posture through its advanced military capabilities and extensive global presence. The US´s military strategy reflects its dual focus on maintaining global dominance and leveraging economic benefits from conflicts. This reliance on military expenditure highlights the intertwined nature of economics, geopolitics and technological innovation in shaping global power dynamics. **TRADE:** TRADE RELATIONSHIPS AND REGIONAL FOCUS: - [Limited business with Africa:] the US has minimal trade activity with African countries, largely because China has established a dominant presence in the region through significant investments and partnerships - [Focus on strategic partnerships:] the US primarily does business with countries with which it has specific trade agreements - A trade agreement with Mexico has been in place since 1984 - Membership in the World Trade Organization began in 1995, following its earlier participation in GATT (General Agreement on Tariffs and Trade) since the 1950s KEY OPPORTUNITIES WITH THE US: - [Competitive sectors for business with the US:] capital services and industrial supplies offer significant opportunities - [Goods the US buys:] consumer goods, capital goods, food and industrial supplies are in demand - [Challenges for sellers:] selling transportation-related products to the US is difficult because the country produces much of its own transportation equipment domestically TOURISM AND ITS RELEVANCE: Tourism plays a vital role in the US economy, attracting international visitors and generating revenue across various sectors. GLOBAL TRADE RANKINGS AND COMPETITIVENESS: - [Strong but not leading:] while the US is a robust trading power, it´s not the largest. China holds the top position in international trade, with India also growing its influence in global markets - [European competitiveness challenges:] European countries face regulatory constraints, particularly related to sustainability rules and commitments, which hinder their competitiveness in global trade - [Pharmaceutical production:] India has emerged as the world´s largest producer of pharmaceutical goods, surpassing other nations in this sector PROTECTIONIST POLICIES AND TARIFFS: - [Trump Administration´s policies:] - President Trump advocated for reducing taxes on US businesses while raising tariffs on imports - \*Tariffs on Chinese products, such as cars and electric vehicles, were increased by 100% - These policies aimed to protect local industries by discouraging reliance on foreign goods - [Consequences for protectionism:] while such measures can shield domestic industries in the short term, they may negatively affect the broader US economy over time by increasing costs for consumers and straining international trade relationships SUMMARY OBSERVATIONS: - The US maintains a strong position in global trade through strategic agreements and domestic production capabilities - Its limited engagement with certain regions, such as Africa, and protectionist measures may pose challenges in a competitive and interconnected global market - The rise of global players like China and India further intensifies the competition, compelling the US to adapt its trade strategies while balancing domestic priorities. **TELECOMMUNICATIONS:** The development of telecommunications has advanced significantly, enabling individuals to communicate across vast distances using mechanical and electronic devices. This technological progress has changed the way people and systems interact globally. THE INTERNET AND COMMUNICATION TECHNOLOGY: - The internet allows people to access vast amounts of information and communicate instantly through messaging, no matter where they are located. - Communication has evolved into [bilateral] (one-to-one) and [multilateral] (many-to-many) formats, bridging vast geographical distances seamlessly. THE ROLE OF SATELLITES IN TELECOMMUNICATIONS: - [Core infrastructure:] - Satellites are critical for modern communication, supporting everything from internet connectivity to broadcasting and navigation - All major forms of global communication depend on satellite technology for reliability and efficiency - [Submarine cables:] beyond satellites, underwater cables play a pivotal role in telecommunications, connecting continents. \*Cables across the Atlantic link Europe to the United States, ensuring high-speed data transfer and robust communication. 5G TECHNOLOGY AND ITS CHALLENGES: - [Importance of 5G:] - This cutting-edge technology allows people, devices and systems to communicate with one another (the Internet of Things) - To enable 5G, extremely powerful satellites are required - [Challenges of satellite crowding:] - The growing number of satellites in orbit is creating congestion in space, making it difficult to find space for new ones - This overcrowding raises concerns about managing space debris and optimizing orbital pathways THE RISE OF SPACEX AND PRIVATIZATION: - [Revolutionizing satellite deployment:] - Previously, launching satellites required government space agencies like NASA - *SpaceX* has transformed this landscape, providing satellite deployment services to governments and private organizations worldwide - [Potential risks of centralization:] - SpaceX aims to connect the entire world with a network of satellites, which raises concerns about one company holding too much power over global communications - This could lead to discomfort among nations, as reliance on a single private entity for telecommunications may compromise their autonomy and security GLOBAL TELECOMMUNICATIONS GOVERNANCE: - [US oversight:] telecommunications policies are primarily regulated by organizations like FCC (Federal Communications Commission) and the NTIA (National Telecommunications and Information Administration) in the USA. - [International concerns:] - If one company or nation dominates global telecommunications infrastructure, it could lead to geopolitical tensions. - The US has implemented policies to regulate and balance control in the sector, aiming to mitigate the risks of monopolization. KEY CHALLENGES IN TELECOMMUNICATIONS: - [Space crowding:] managing the increasing number of satellites while ensuring efficient use of orbital space - [Power centralization:] avoiding excessive reliance on private companies like SpaceX for global communication infrastructure - [Policy development:] establishing international agreements to ensure equitable and secure telecommunications for all nations. **TECHNOLOGICAL SECTOR:** KEY AREAS: software development, artificial intelligence and data analysis. US LOSING COMPETITIVE ADVANTAGE: - By 2021, the US was nearly outpaced in microchip production by TSMC (Taiwan Semiconductor Manufacturing Company) and Samsung, with TSMC leading the sector. - Taiwan´s role is critical as it produces microchips essential for US technology while remaining independent from China. STRATEGIC CONCERNS FOR THE US: - Reliance on Taiwanese microchips raises geopolitical risks since Taiwan is claimed by China - Microchips are fundamental for AI and other advanced technologies, making their production strategically vital. US INVESTMENTS IN MICROCHIP PRODUCTION: - [Domestic efforts:] the US is rapidly investing in its domestic microchip industry to reduce dependency on Taiwan. - [Allied partnerships:] collaborations with companies like Samsung aim to diversify supply chains. - [Challenges in microchip production:] - Microchip manufacturing is one of the world´s most complex and expensive processes - Requires advanced infrastructure, significant financial investment and technical expertise. GLOBAL RACE FOR MICROCHIP DOMINANCE: - [USA vs. China:] the competition to control the microchip ecosystem could determine technological and military supremacy - [Strategic importance:] microchips are essential for AI development, military technology and overall competitiveness in the 21^st^ century. AI LEADERSHIP: China is leading advancement in AI, posing a challenge to the US. The success in AI development further solidifies China´s competitive position in technology. US TECHNOLOGY COMPANIES: The wealthiest companies in the US are in the technology sector, underscoring the industry´s importance. **ECONOMY:** Economic power is a key pillar of U.S. global influence. - [GDP and PPP:] while the US leads in absolute GDP, China surpasses it in purchasing power parity, reflecting a higher affordability of goods and services within China. \*If the dollar is used around the world, you have an advantage because you can buy more things in different countries too. \*[India] is not that large in terms of GDP, but in PPP is way much bigger. - [Income inequality:] capitalism has led to significant polarization in wealth within the US, weakening the middle class and impacting the overall quality of life for many citizens. - [Tourism and trade:] tourism is a significant contributor to the US economy, and the country excels in exporting consumer goods, capital goods and industrial supplies. **INSTITUTIONS:** International institutions play critical roles in shaping global economies. However, their governance, benefits and influence often depend on the priorities of major contributors (USA and increasingly China) WORLD BANK AND INTERNATIONAL MONETARY FUND: - [Purpose of the WB:] - Focuses on global development by providing financial resources and technical assistance to countries - Helps nations craft and implement their own strategies for economic and social progress - [Governance and voting rights: ] - Voting power within the WB and IMF is proportional to the financial contributions of member countries - This governance structure allows powerful nations, like the US, to influence decisions and direct funds toward allied nations - Non-allied countries often face challenges in accessing financial support, reflecting the use of these institutions as tools for controlling other economies WORLD TRADE ORGANIZATION: - [Promoting free trade:] - Free trade is seen as essential for global economic development - It fosters better technology, increased competition and benefits for consumers, ultimately boosting the global economy - [Unequal benefits:] - The rules established by the WTO often favor the countries that create them, primarily benefiting the US and its allies - Developing nations may struggle to achieve equitable outcomes under this system CHINA´S GROWING INFLUENCE: - [Investments in institutions:] - China is allocating significant monetary resources to its own institutions, increasing its influence on the global stage - However, it remains far from achieving dominance in international systems - China´s goal is to encourage more nations to align with its vision for a revised international order [ ] - [Currency credibility and foreign exchange reserves:] - China requires substantial foreign exchange reserves to stabilize its currency and gain credibility in international markets. - By contrast, the US dollar´s credibility is unquestioned, reducing the need for large reserves - [Europe´s reserves:] - The euro holds significant market trust, similar to the dollar, enabling European countries to maintain central reserves of around \$400 billion - This trust reduces Europe´s need for large reserve holdings, as market certainty supports the euro´s stability DIGITAL CURRENCIES AND THEIR IMPACT: - Digital currencies could disrupt the dollar´s dominance as the global reserve currency by reducing the necessity of using dollars in international transactions - This shift could weaken the US´s financial influence and create alternative systems of trade and reserve management KEY OBSERVATIONS: - [Global power dynamics:] - Institutions remain critical tools for the US to maintain its global influence - However, China´s growing investments in parallel institutions and reserves challenge this dominance - [Currency stability:] - The US dollar and the euro benefit from inherent market trust, reducing the need for significant reserves - China faces the challenge of building similar credibility, requiring extensive reserves to support its currency - [Future risks:] the rise of digital currencies may alter global trade dynamics, diminishing the reliance on the dollar and shifting the balance of financial power **NATURAL RESOURCES:** Since 2014, the USA no longer relies on oil imports from the Middle East largest producer of oil globally, with Russia in second place. - Copper is becoming more valuable than gold due to its role in the energy transition (renewable energy technologies). \*Chile and Peru are leading global producers of copper, which is critical for technologies like batteries and renewable energy infrastructure. - Rare earths are essential for producing advanced technology and military equipment (drones, semiconductors, submarines). \*China controls 67% of rare earth production globally, creating a strategic challenge for the USA. \*India is the second-largest producer - Forest resources are vital for mitigating climate change, but the USA faces challenges in this area compared to other countries with significant forest reserves like the Amazon. The USA uses [fracking] to extract natural gas and oil, a method strongly supported by Trump. This method helps ensure energy self-sufficiency but generates significant environmental pollution. \*Unlike other nations, the USA places less emphasis on renewable energy development. Its focus remains on traditional energy sources, relying on global markets to access cheaper oil and gas if needed.