For as long as the world's leading nations shied away from electing populists, or indeed choosing populist paths, there was a measure of certainty in the global economy. "End of the world" thoughts never arose when peripheral countries or former giants such as Italy chose leaders such as Silvio Berlusconi, because they were rather inconsequential to our fate.That all changed this week when the US had its Berlusconi moment in the election of Donald Trump. It came less than six months after Britain shocked the global system - and proved the opinion polls wrong - by choosing to exit the European family of nations.These choices may seem irrational, an adjective the Western world has so often used to deride counterintuitive political choices in the developing world, and Africa in particular.story_article_left1The US economy appears - on the surface at least - to be faring better than those of its Western peers, and also outpacing many becalmed emerging markets. The world's largest economy no longer faces the unemployment issues that President Barack Obama faced when he won office in 2008.So what has driven America's "irrational" choice of Trump as the leader of the free world?The winning argument for this "black swan" political event may well be the continued realignment of the global economy since the awakening of China.The 20th century belonged unequivocally to the US.Aided by two world wars that galvanised its military industrial complex while Europe lay in ruins, the US emerged as the pre-eminent political and economic superpower.Even the Soviet Union was brushed aside in the late 1980s, leaving only one power on the global stage.Baby boomer Americans experienced the best of times: white picket fences, big-screen TVs , double-door garages housing monstrous gas guzzlers from Detroit.Just over three years ago the city of Detroit filed for bankruptcy, the largest municipal bankruptcy filing in US history.The city's decline became emblematic of the country's industrial decline, as emerging markets began to eat into its market share in manufacturing.From the '80s, China - with its legions of cheap and flexible labour - became the world's factory.According to The Economist, more than 700million people have been lifted out of poverty in the world's most populous nation since 1978. That is more than twice the entire population of the US.story_article_right2In this nearly four-decade-long rise of the Chinese dragon, there were losers.And Trump was happy to play the victim card in this regard. It was a message that resonated strongly with Middle America, and in particular with the normally reliably Democratic areas of the Midwestern Rust Belt that ultimately delivered him to the White House.But it's not as simple as that.The US has had its share of winners, too, with success stories such as Apple - a company that has derived great benefit from using the cheap labour of China's megafactories.Remember, too, that domestic consumption in the US is close to 70% of total GDP. This was instrumental in the growth of financial innovation, which eventually led to the 2008 credit crisis.The US economy, based overwhelmingly on domestic consumption in a market of close to 320million people, is still the world's biggest.But consumer demand doesn't necessarily translate into increased employment.When Obama was first elected in 2008, one of his stated aims was to get US innovation going in sectors outside financial services. The heavily subsidised renewable energy sector was his pet project.It has proved to be a growth industry, but stubbornly low oil prices have deflated some of the excitement. And it's a highly competitive space because both Europe and China have also invested heavily in the industry, which promises more in the way of sustainable jobs than information technology.story_article_left3In the green industry and other sectors, US exports are nowhere near as competitive as those from China because of labour costs and the strength of the dollar, among other factors.Trump imagines that he will wage a global trade war to reignite demand for US-made goods.The easiest path for a populist politician to follow in that regard is a weaker currency, which is the most potent weapon to fend off cheaper imports.In order to reverse the erosion of the US industrial base, the new White House tenant may well choose currency markets as the main battleground in this trade war. Japan is an abject lesson in this regard.Trump is primed to wage a similar battle in order to "Make America great again".How rivals respond will be the economic battle of our times. While China has sought to rebalance its economy towards more consumption, it, too, knows that it would be folly to lose sight of the benefits of a strong export base.A weaker dollar means higher commodity prices and in turn a potential strengthening of the rand.This would be beneficial for a country fending off high inflation, but how much devastation will it wreak on our own industrial base? And what response will that prompt from Pretoria?That's our question.E-mail derbyr@sundaytimes.co.za or find him on Twitter @ronderby..