Some immediate thoughts:
1.
There is an economic argument that the Iraq War (and probably Afghanistan too) played a key role in triggering the 2008 Recession, if not as as the primary factor
than as an aggravating one. The lack of the Great Recession changes everything going forward, obviously, both in good and bad ways.
2.
Contemporary Chinese strategy has its roots in the 9/11 era, in that Beijing realized it had a 20 year timeframe to leverage with the U.S. focused on the Middle East region and fighting the War on Terror. Without that, China's rise may very well have been handicapped by the U.S. paying more focus to it from the 2000s onward:
First, 9/11 offered what Beijing defined as a “window of strategic opportunity” to develop its strength while the United States was acutely distracted. Many Chinese strategists saw 9/11 as the breathing space that bought China another decade to focus on its development without being identified and targeted as the priority challenge for America. During the 2000 US election campaign, presidential candidate George W. Bush had sharply criticised President Bill Clinton’s notion of a “strategic partnership” with China and proposed instead that the United States and China were “strategic competitors”. The United States would not have waited almost another two decades to define China as the most important strategic challenge and vigorously engage in what President Joe Biden now calls the “extreme competition” with China had 9/11 not taken place.
Such an earlier turn on China
could save millions of manufacturing jobs in the United States (and possibly shift some to Mexico, more on that latter), which also plays well into avoiding the Great Recession:
It’s not perfectly clear what, exactly, is the culprit behind relatively anemic growth in manufacturing output. But the signs indicate trade and globalization played a much more significant role than is commonly recognized. Of particular importance is China’s emergence as a major exporter, which
US leaders encouraged. A
pair of
papers by economists David Autor, David Dorn, and Gordon Hanson, found that the parts of the US hit hard by Chinese import competition saw manufacturing job loss, falling wages, and the shrinking of their workforces. They also found that offsetting employment gains in other industries never materialized. Another
important paper by this team of economists, along with MIT’s Daron Acemoglu and Brendan Price, estimated that competition from Chinese imports cost the US as many as 2.4 million jobs between 1999 and 2011.
Why did China have such a big impact? In their
2016 study, economists Justin Pierce and Peter Schott argue that China’s accession to the WTO in 2001—set in motion by president Bill Clinton—sparked a sharp drop in US manufacturing employment. That’s because when China joined the WTO, it extinguished the risk that the US might retaliate against the Chinese government’s
mercantilist currency and protectionist
industrial policies by raising tariffs. International companies that set up shop in China therefore enjoyed the benefits of cheap labor, as well as a huge competitive edge from the Chinese government’s artificial cheapening of the yuan.
The resulting appreciation of the dollar hurt US exporters—in particular, manufacturers. A
2017 study on the dollar’s appreciation in the early 2000s by economist Douglas Campbell found that the dollar strengthened sharply, in real terms, compared to low-wage trading partners including China. The subsequent increase in foreign imports and diminished demand for American exports resulted in a loss of around 1.5 million manufacturing jobs between 1995 and 2008.
There are also observable signs that automation wasn’t to blame. Consider the shuttering of some 78,000 manufacturing plants between 2000 and 2014, a 22% drop. This is odd given that robots, like humans, have to work somewhere. Then there’s the fact that there simply
aren’t that many robots in US factories, compared with other advanced economies.
3.
North American Integration would likely be deeper. In the late 1990s and early 2000s, there was a movement for an EU-like entity in North America, with groups like the
Independent Task Force on North America and
then Mexican President Vincente Fox directly calling for such. The Post 9/11 surge in American Nationalism and focus on the Middle East made this impossible, with the main policy success being the
Security and Prosperity Partnership of North America being signed in 2005. It is known
from leaked diplomatic cables that the U.S. did look for something greater at the time, but Bush ultimately didn't go through with it for the aforementioned reasons.
Without the Post-9/11 Nationalism surge, it's likely in my mind Washington will feel more comfortable going forward with such an audacious plan, especially since the 1990s culture zeitgeist (Where things like the EU were the next big thing) fades away slower rather than abruptly ending. It's worth noting
such an idea is being revived in Washington political circles in the context of the emerging Second Cold War, and an earlier confrontation with China could help give it added emphasis in TTL's 2000s. This would be a clear benefit to Mexico, as an aside,
given outsourcing to China was most likely to the detriment of Mexican industries. ITTL,
Mexico would probably be more clearly "the Eastern Europe" to America's "Germany":
The formation of maquiladoras, factories mostly located in areas close to the U.S. border, kicked off an era of vibrant manufacturing activity in Mexico in the 1960s. For years afterward, they churned out large volumes of components that could be exported to the U.S. duty-free. By the late 1990s, the maquilas were employing more than one million Mexico workers. Further spurring production in Mexico was the launch of regular double-stack train services that carried parts north for U.S. automakers.
Activity slackened when U.S. companies began shifting production to China, where labor rates were cheaper and more readily available than in Mexico. But recent geopolitical shifts and other factors suggest that Mexico might be poised for another surge of manufacturing activity.
So believes Deepak Chhugani, founder and chief executive officer of Nuvocargo, a software-centric freight forwarder and customs broker specializing in shipments between Mexico and the U.S. Thanks in part to the U.S.-China trade war, as well as the rising cost of production in China, manufacturers are beginning to turn their attention back to Mexico, he says.
“For a lot of small importers [from China], the tariffs have become untenable and impossible to pass on,” Chhugani says. “That has made Mexico the obvious alternative.”
Successful negotiation of the United States-Mexico-Canada Agreement (USMCA), which replaced the 25-year-old North American Freight Trade Agreement (NAFTA), was another “accelerant” of the nascent trend toward stepped-up production in Mexico, Chhugani says. Then there was the coronavirus pandemic, which temporarily shut down Chinese plants along with many of the passenger plane services required to expedite shipments from China under precisely such a scenario.
Moving outside of these three, things become far more speculative.
One thing that immediately jumps to my mind is that, without the Iraq War and wider destabilization of the Middle East, the Arab Spring is unlikely to happen; many of cultural causes aren't there and there is no late 2000s spike in fuel prices that helped trigger the more immediate casual factor in terms of food price spikes. Thus, the Middle East keeps a lot of its dictators, but the region is more stable and probably prosperous on the whole. One loser, however, is that lower oil prices likely means Dubai never explodes like it does. Another is Iran; they still have the festering sore of Afghanistan on one side and on the other, Iraq under Saddam for longer and no Assad desperation in Syria helps to check their geopolitical expansion from occurring. Israel might be more inclined to a peace deal with Palestine in this altered geopolitical landscape.
Another, more pressing for our modern times, is the status of Russia. Bush and Putin enjoyed a good relationship during his first term
with genuine Russian interest in deepening ties with NATO and the West at large, but ultimately this soured over the course of the 2000s. This can go a lot of ways, and I think depends on who is around Bush in Washington. Hawks like Rumsfeld might not last long without GWOT, and Bush's memoir revealed Cheney nearly left after his heart attack mid-way through the Bush years in favor of Bill Frist; the rest of the Neocons in the Administration would be reduced in influence without these two main characters. It's worth noting
Japan,
the EU and
the United States all saw and still do see the ability to use Russia as leverage on China OTL, so there's strategic reason to do so ITTL.
This probably means coming to an agreement to limit NATO expansion/letting in Russia first and enabling Russia to formalize its strategic conception in the FSU,
which means turning CSTO and the CIS into a Russian-led NATO and EU like set of entities (and fits with the in vogue regional bodies thing). Alternatively, without the GWOT distracting them and an emerging Second Cold War, maybe the U.S. goes harder on Russia in the 2000s. Being closer to the Post Soviet chaos and with less revenues from lower fuel prices, Moscow has less room to maneuver while the West has more; perhaps the Orange Revolution in 2004 slips Ukraine out of the Russian sphere a decade sooner than OTL. On the flipside, this will push Russia and China together closer and also sooner than OTL, meaning we get Power of Siberia I and II instead of the Nord Streams, hurting Europe economically while also helping undercut U.S. leverage on China with blockading Beijing.
Finally, I haven't looked to see if there is data or studies backing it up, but one compelling argument I've heard this year is that the Post 9/11 monetary expansion and surveillance state played a key role in bringing about the smartphone era and wider expansion of consumer electronics. In the same way the Space Race and Cold War spending brought a lot of technologies into the civilian sphere, the Iphone and Internet of Things was tied directly into the War on Terror. Undoubtedly the ideas do pre-date 9/11, but the specific forces the event unleashed probably, at the least, helped to expedite these emerging technologies in a way that otherwise wouldn't have happened. Thus, could this ATL see things like smartphones and social media lagging 5 to maybe even 10 years behind OTL? That has profound cultural and economic implications, to say the least.
