What impact will the numerous actions the US has taken, in a somewhat haphazard manner, in the last six months have on its own economy and that of India? What will, for example, the impact of charging for new H-1B visas achieve for the US? To answer this, we need to understand the US exceptionalism that allowed a country with 4% of the world’s population to produce 27% of global GDP, account for 50% of global market capitalisation, and be an undisputed leader in technological innovation. Just between 2020 and 2025, its economy in nominal terms grew from $21.4 trillion to $29 trillion. It is worthwhile to examine what underpins US exceptionalism and why I am puzzled by the actions of President Donald Trump, as I feel they erode the foundations of what made America great.

Post-World War II, and especially after the fall of the erstwhile Soviet Union, the US had become the sole global superpower, and the US dollar was the global reserve currency. By 2000, the US was the largest trading partner for most of the world. In the last 25 years, even though China replaced it as the world’s largest trading partner, the US dollar singularly remained the global reserve currency. Being the reserve currency was a remarkable privilege. The US attracted $62 trillion (40% of which was in fixed income) at low rates while earning more on its $35 trillion invested abroad to allow it to have a positive net investment income overall.

Four factors underpin the US’s continued success........

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