From the Plaza Accord to Trade Wars: The 'Coercion' No Longer Backed by 'Consent'

How does a global hegemon respond when its dominance begins to erode from within?

In the mid-1980s, the United States faced a dilemma: the policies it implemented to bring inflation under control were beginning to undermine industrial production. This weakening was driven not only by internal dynamics but also by external pressures—chief among them, the appreciation of the US dollar. As a result, American exports were losing ground globally, trade deficits were widening, and domestic producers were increasingly squeezed.

How was this crisis resolved in the 1980s? Through a landmark agreement among the world’s largest economies—known as the Plaza Accord—which deliberately depreciated the dollar in a coordinated diplomatic effort.

Fast forward to 2025. Several decades have passed, and the structural competitiveness issues of the US economy have only deepened. This time, however, the United States responded not through multilateral diplomacy, but through unilateral economic confrontation. The Trump administration launched a wave of tariffs—primarily targeting China—in an attempt to reduce trade deficits, revive domestic manufacturing, and reclaim lost dominance in global production.