Moreover, this is occurring in the context of an increasingly multipolar world, the place the rise of latest powers is difficult both American economic and political dominance (Bremmer and Roubini Citation2011; Hopewell Citation2016; Patrick Citation2010). The rise of new powers, such as China and India, and the implications for US hegemony have turn out to be a central preoccupation of worldwide relations scholars and coverage-makers alike. Instead, the international financial establishments are more and more signaling a rejection of market fundamentalism and renewed appreciation of the significance of industrial coverage (Lazonick Citation2008; Robinson Citation2011; Rodrik Citation2008; Stiglitz, Esteban and Yifu Citation2013). There are main questions on whether – and how – the US will retain its hegemonic position in the worldwide system within the context of the rising energy of China and different rising challengers (Babones Citation2015; Norrlof Citation2010). In this article, I draw on the case of the battle over the Export-Import Bank to argue that the US’s potential to reply to rising aggressive challenges is being hampered by a robust domestic anti-state motion. The global political economic system of official export credit – using loans and other types of financing by states to spice up exports – is being dramatically transformed.

In the name of free markets, the US is tying its own hands – restraining the scope for the state to intervene in markets to advertise US economic interests – not because it’s being compelled to by external forces, but due to constraints being imposed by a strong internal domestic political movement within the thrall of market fundamentalist ideology. Drawing on the case of export credit, I argue that the grip of market fundamentalist ideology, mixed with the prevalence of inaccurate concepts about how the US achieved its global economic dominance and has maintained it to this point, are weakening the US’s capacity to keep up its financial primacy within the face of rising challengers. Within the words of Fred Block (Citation2011: 4), proponents of market fundamentalism created ‘a fictive American past in which the substantial economic role performed by authorities – from the founding – was made to disappear’. Thus, as Block and Keller (Citation2014: 20) argue, ‘prevailing accounts of the US as a liberal market economic system are deeply misleading’. Despite trumpeting the virtues of unfettered markets, the US has always made use of industrial policy and, indeed, this has been important to its economic success (Block and Keller Citation2011; Lazonick Citation2008; Schrank and Whitford Citation2009; Weiss Citation2014).

The US has been a serious driver of the rise and global unfold of neoliberalism as an ideology and coverage paradigm, directed at lowering the role of the state within the economy by liberalizing trade and capital flows, privatizing state-owned enterprises, decreasing taxes and public spending, and freeing business from government regulation. This shift has been driven by recognition that an lively state engaged in industrial policy was critical to the exceptional rise of China and different rising economies (Ban and Blyth Citation2013). Consequently, even within the multilateral establishments that had been once its main champions, such because the IMF and World Bank, there’s now growing recognition that neoliberalism was an ineffective technique for generating durable economic progress (Ostry, Loungani and Furceri Citation2016). The Tea Party’s efforts to eliminate US export credit – a product of its broader antipathy in direction of the state – rest on a scarcity of recognition that with out continued intervention by the state to bolster development and competitiveness, the US position in the global economic system might be weakened. This may increasingly take the form of opposition and subversion to control, or it may be related to the lack of defined responsibility or authority to take action. The Tea Party marketing campaign against the Exim Bank generated substantial opposition from American enterprise, including its largest and most highly effective firms and industry associations.

On account of opposition from the Tea Party, the US Export-Import Bank was pressured to halt its lending operations for five months in 2015 and subsequently limited to financing only the smallest transactions. Within American well-liked discourse, there is a collective ‘amnesia’ in regards to the contribution of authorities to America’s economic success because of a deliberate campaign to delegitimize the position of an lively state (Hacker and Pierson Citation2016). The Tea Party’s marketing campaign against Exim is rooted in a failure to acknowledge and admire the position of an active state and industrial coverage in building US economic supremacy – and, by extension, its political dominance. For most major economies, state-backed export credit is a core factor of industrial policy and their methods to spice up exports and financial progress. As one OECD report states, ‘competition from rising economies is growing, even in activities and markets that have been, till not too long ago, thought-about the core strengths of OECD countries’ (Warwick Citation2013: 7). Among excessive-revenue international locations, there are therefore considerations that the lack of core manufacturing actions may erode adjoining activities in the value chain, leaving these international locations struggling to retain excessive worth actions equivalent to innovation, R&D and design (Block and Keller Citation2014; Pisano and Shih Citation2012; Warwick Citation2013).