A recent report by Kuwaiti consultancy firm Al-Shall has highlighted growing signs that the era of America economic dominance is about to end, as global economic influence gradually shifts toward Asia.
The report traces the dollar’s rise to reserve currency status back around 81 years, when it replaced the British pound.
Its supremacy was underpinned by the United States’ overwhelming economic strength at the time — accounting for roughly half of global GDP — and its ability to peg the dollar to gold at a fixed rate of $35 per ounce.
From Gold Standard to Expanding Debt
Following World War II, the US engaged in costly wars, including the Korean and Vietnam conflicts.
As well as proxy wars, which pushed government spending beyond tax revenues.
In August 1971, the dollar was unpegged from gold, allowing the US to expand money printing based on trust in its economy and limited competition.
However, Al-Shall notes that America economic dominance has eroded.
America Economic Dominance Won’t Last – But Why?
Today, the US accounts for 26.4% of global GDP.
While China’s economy represents 17%, Japan 3.6%, and India 3.5%. Combined, these three major Asian economies make up 24.1% of the global economy.
According to Goldman Sachs, China’s GDP is expected to surpass that of the US by 2035.
The IMF projects that India will rise to fourth place by the end of 2025 and to third place by 2028, overtaking Germany.
Mounting Debt and Trade Wars Affect America Economic Dominance
The report warns that US public debt has soared to over $36 trillion, compared to $10.9 trillion in 2008. Under President Donald Trump, the US launched a wide-ranging trade war, even targeting Western allies.
With an expansive federal budget increasingly reliant on borrowing, the World Bank cut its 2025 US growth forecast by 40% between January and June this year.
The US Congressional Budget Office forecasts persistent budget deficits through at least 2055, with an estimated $13.8 trillion in interest payments between 2025 and 2035 — a trend that will likely drive further dollar printing.
Diverging Economic Outlooks
While some see these policies as harmful to the US and its allies, others support them.
The US trade deficit stood at $1.2 trillion in 2024 and $710 billion in the first half of 2025, but tariff revenues could reach $700 billion annually, according to the US Treasury.
A weaker dollar could make American exports more competitive and reduce imports, as reflected in the trade deficit’s drop from $163 billion in March to $60.2 billion in June 2025.
If trade agreements reduce uncertainty, the US economy could grow faster.
The IMF reported in July that GDP expanded by 3% in Q2 2025, rebounding from a -0.5% contraction in Q1.
Declining Reserve Currency Share
Despite these mixed signals, Al-Shall warns of a steady decline in America economic dominance.
Because the dollar’s role as a global reserve currency declined from 65.7% in 2015 to 57.8% in 2024.
Since the start of 2025, the dollar has weakened significantly:
- -10.2% against the euro
- -5.6% against the British pound
- -6.5% against the Japanese yen
- -1.6% against the Chinese yuan
The consultancy stresses that the most concerning factor is the erosion of trust in US policymaking, a key asset since 1971.
What Will Happen if America Economic Dominance Went to Asian Countries?
Losing the dollar’s reserve currency status would be a seismic shift in global finance, potentially occurring within the next decade and bringing significant risks.
For countries like Kuwait, where most income and investments are dollar-based, the report urges careful strategic planning to prepare for such a transition.
