Photo Credit: AP[1]

By: Richard Guerra

The shutdown is over. But our understanding of the shutdown’s impact on America, particularly its international reputation, is just beginning. Media reports of the U.S. partial government shutdown’s costs are widely known. For instance, credit rating agency Standard & Poor’s estimated that the U.S. economy lost $24 billion dollars,[2] Moody’s Analytics reported a similar cost of $23 billion dollars,[3] and Fitch recently announced that it might downgrade the U.S.’s credit rating from AAA.[4] Standard & Poor’s added that the short term of the deal, which will only fund the government through Jan. 15, could negatively affect consumer confidence.[5] This shutdown has caused the U.S.’s second risk of default since 2011, when the credit rating agency Standard & Poor’s downgraded the nation’s credit rating from AAA to AA+.[6] However, this risk of default has drawn additional international scrutiny to the government shutdown. [7]

A Negative International Response

China’s Dagong Global Credit Rating downgraded its credit rating for U.S debt from A to A-minus on October 17, 2013.[8] Dagong is not recognized by the SEC, nor does it influence any of the big three credit rating agencies: Standard & Poor’s, Moody’s, and Fitch Group.[9] However, this downgrade reflects China’s worsening view of the U.S.’s government.[10] A few days before the shutdown’s end, China’s largest news agency, Xinhua, published an editorial calling for a “de-Americanized world.”[11] The article stated that America’s cyclical political stagnation over the federal budget and the debt ceiling jeopardized many other nations’ dollar assets and created anxiety for the international community.[12] The article went on to criticize America for meddling in other countries’ business, allowing Wall Street elites to cause a worldwide recession, and claiming a moral high ground while covertly torturing prisoners of war, killing civilians with drones, and spying on world leaders.[13] Finally, the article suggested that the international legal community make changes that would “not … completely toss the United States aside,” but would “encourage Washington to play a much more constructive role in addressing global affairs.”[14]

But China was not the only foreign nation that criticized the U.S. shutdown. Lebanese newspaper, The Daily Star stated that Washington’s political dysfunction has cast doubt on America’s reliability and will cause the emergence of a post-American world.[15] The article quoted New York billionaire Michael Bloomberg as saying that “[America looks] like a Third World country,” due to the shutdown.[16] Additionally, South Africa’s Mail & Guardian published a response to the shutdown that criticized the American government for being “increasingly inept at advancing the interests of its people.”[17] The article stated, “While the state of political action and discourse in America is certainly distressing, worse still is the willingness of its citizens to tolerate it.”[18] Even British economist Niel Mackinnon, in an interview with Russia Today, said that the U.S.’s periodic budget crises “undermine confidence” in America’s economic policy and in the US dollar.[19]

America Should Be Concerned About Its International Reputation

It might be easy for American politicians to tell their European critics to stay out of American business. But international talk of a de-Americanized or post-American world should cause concern among American policymakers. This is because the shifting global economy is pushing more countries toward superpower status. American interests must now compete with other nations’ interests around the world which means America’s economy must be stable in light of these global economic changes. However, reformers will challenge the U.S. dollar’s role in the international community if other countries strongly believe that the American economy cannot remain stable due to cyclical economic scares caused by inept governance. For example, the shutdown caused President Obama to cancel his trip to Asia, where he was going to attend the Asia-Pacific Economic Cooperation (APEC) in Bali, Indonesia,[20] and the Association of Southeast Asian Nations summit in Brunei.[21] His absence was significant because it allowed China to take center stage and aggressively push its interests without American input. By missing these summits, Obama has missed the opportunity to further negotiate the details of the Trans-Pacific Partnership, a U.S. led trade agreement.[22] Michael Kulma, executive director of the Global Leader Initiatives at Asia Society, said that Obama’s absence from APEC would affect how the region views America,[23] hinting at the fact that other nations will be less willing to cooperate with an unstable and unreliable America.

Nations worldwide breathed a sigh of relief when the shutdown ended. However, we will continue to dissect the shutdown’s effects on America as we head toward the next potential shutdown date. As January 15 approaches, Americans optimistically hope that this past shutdown will be our last. So does the world, but the rest of the world might not be as optimistic, and that loss of trust in America could negatively affect its superpower status.  Only time will tell.

Richard Guerra is a third year law student at the Penn State Dickinson School of Law.