The U.S. in Denial: Navigating the Loss of Global Dominance through the 7 Stages of Grief

by Masatoshi Nishimura

When a nation’s influence begins to wane, its citizens and leaders often go through emotional cycles akin to the stages of grief. As the U.S. grapples with China’s rise and the changing global order, it seems to be stuck in the early phases of denial. This isn’t an unprecedented phenomenon—Japan faced similar challenges as China overtook it economically.

Understanding these shifts through the framework of grief offers insight into where the U.S. is now and where it might be headed in the coming decades.

The 7 Stages of Grief in Global Politics

In psychology, the 7 stages of grief outline how people process loss:  (snippet definition taken from Healthline).

  • Shock and denial: This is a state of disbelief and numbed feelings.
  • Pain and guilt: You may feel that the loss is unbearable and that you’re making other people’s lives harder because of your feelings and needs.
  • Anger and bargaining: You may lash out, telling God or a higher power that you’ll do anything they ask if they’ll only grant you relief from these feelings or this situation.
  • Depression: This may be a period of isolation and loneliness during which you process and reflect on the loss.
  • The upward turn: At this point, the stages of grief, like anger and pain, have died down, and you’re left in a more calm and relaxed state.
  • Reconstruction and working through: You can begin to put pieces of your life back together and move forward.
  • Acceptance and hope: This is a very gradual acceptance of the new way of life and a feeling of possibility for the future.

Shock and Denial: 2017 to Present

The U.S. entered the denial stage in 2017, with the election of Donald Trump marking the beginning of a political shift. China had quietly surpassed the U.S. in GDP (PPP), and its scientific output was catching up. Yet, the American public and political elites dismissed China’s rise as unsustainable, framing it as either temporary or fraudulent.

Rather than facing the deeper economic implications, leaders focused on symbolic actions—such as banning Huawei and TikTok. Conservatives believed that eliminating these threats would restore U.S. dominance. At the same time, narratives about China’s imminent economic collapse gained traction, despite the inconvenient fact that China’s GDP was still growing at 4.5%.

This denial masks the uncomfortable reality: China is no longer a developing country or a low-cost competitor. Yet, many corporations and policymakers cling to the belief that U.S. superiority will return without significant reforms.

Pre Denial - Obama

During the Obama administration, the U.S. embraced policies that leaned toward cooperation with China, hoping the country would evolve into a liberal democracy. At that time, China’s GDP by purchasing power parity (PPP) was still half of the U.S.’s. The rise of Chinese consumer electronics giants like DJI and Huawei captured imaginations, hinting at the innovation the U.S. was expected to lead.

However, U.S. policymakers dismissed China as merely a low-cost competitor. As Chinese influence grew, many in America were in denial, failing to see that China’s rise was not temporary. Even as China’s economic progress accelerated, the belief persisted that U.S. dominance was untouchable.

The Coming Shift: From Pain and Guilt to Anger and Bargaining

The U.S. is unlikely to linger long in the pain and guilt stage. In democracies, emotional shifts are often accelerated by elections. When economic losses become undeniable—likely triggered by a recession or currency instability—the public will briefly experience guilt over lost opportunities. But that phase won’t last.

Instead, political leaders will channel public frustration into anger. This anger will be directed not just at foreign competitors like China but also inward, toward the opposing political party. The U.S. will experience deeper political polarization, with both sides blaming each other for America’s declining global influence.

At the same time, a new wave of leaders will attempt to bargain for a more sustainable global role. Figures like Vivek Ramaswamy already reflect this mindset, advocating for reduced U.S. intervention abroad and cooperation with allies instead of unilateral dominance. The idea of working with China or aligning more closely with regional powers will become part of this bargaining phase.

Japan’s Journey: A Glimpse of What Lies Ahead

Japan’s experience offers valuable insights into how the U.S. might navigate its decline. When China surpassed Japan in GDP (PPP) in 2000, Japan clung to its pro-U.S. alliances and focused on regional diplomacy, especially with North Korea. This was its denial phase—marked by policies that ignored its diminishing influence.

In the 2010s, Japan entered the pain and guilt stage, as its global market share eroded and key industries lost relevance. Populism surged, expressing the public’s frustration with economic stagnation. By 2022, Japan began to see the first signs of recovery, as the country’s deflationary spiral eased. However, when Germany overtook Japan in GDP in 2023, it no longer came as a shock—the emotional groundwork had already been laid.

Today, Japan is slowly moving toward reconstruction, increasing military spending and focusing on economic reforms. Full acceptance will likely come in the 2030s, when Japan embraces a new identity that prioritizes sustainability and niche leadership over global dominance.

What’s Next for the U.S.?

In the next five years, the U.S. will likely face economic disruptions that make its declining influence undeniable. A significant recession, coupled with the weakening of the U.S. dollar, could mark the turning point. This will push the U.S. from denial into anger, as the public blames political opponents and foreign actors for the loss of prosperity.

The generation coming of age during this period—Gen Z—has already accepted China’s rise as a given. By the time they dominate the electorate around 2040, the U.S. may adopt a more introspective posture, focusing on domestic renewal rather than global intervention. This shift will likely mark the end of the Carter Doctrine, which has guided U.S. foreign policy for decades.

A Path Toward Reconstruction and Renewal

If the U.S. can navigate these emotional shifts thoughtfully, it may eventually move toward reconstruction. Bargaining will pave the way for new global partnerships, and the internal anger will give rise to reforms aimed at restoring domestic stability. Acceptance will come gradually, as Americans learn to embrace a role that reflects the realities of a multipolar world.

The lesson from Japan is that decline does not mean irrelevance. Like Japan, the U.S. can reinvent itself by focusing on areas where it excels—technology, innovation, and soft power—while relinquishing the idea of absolute dominance. The key is to move through the stages of grief without becoming trapped in anger or denial.

Conclusion: Acceptance in a New Global Order

The U.S. is at the beginning of a challenging emotional process, much like Japan was two decades ago. Denial, anger, and internal division will shape the coming years. But the end of dominance does not mean the end of influence. If the U.S. can rebuild and accept its place in a multipolar world, it can still play a vital role in shaping the future.

Just as Japan is now finding stability through niche leadership, the U.S. can also find its path—one that focuses on collaboration, innovation, and the values that have always defined it. Moving toward acceptance will not be easy, but it is necessary for the U.S. to thrive in the 21st century.