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U.S. President Barack Obama delivers remarks in the Rose Garden of the White House, Oct. 1, 2013.LARRY DOWNING/Reuters

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U.S. President Barack Obama, shackled to Washington by his country's fiscal crisis, cancelled his trip this week to Asia, which is grim news for Stephen Harper, a golden opportunity for China and proof for those who seek it that the American empire is in decline.

The trip was to be no ordinary goodwill jaunt. The U.S. administration is pushing hard for a draft agreement on the ambitious Trans Pacific Partnership (TPP) by the end of this year.

Hopes were high that having Mr. Obama in Indonesia this week for the Asia-Pacific Economic Co-operation (APEC) summit, then in Brunei for the East Asia Summit, and the accompanying face-to-face talks among leaders could have sealed the deal.

The summits, coupled with presidential visits to Malaysia and the Philippines, were supposed to lend weight to the much-vaunted Pacific pivot that the Obama administration claims is a cornerstone of its foreign policy.

Mr. Harper fought hard to get Canada a seat at the 12-nation TPP table. The Conservative government sees the proposed Pacific trade zone, coupled with a European trade agreement, as the twin pillars of its expansionist trade policy.

But with the Obama administration distracted by the crisis at home, the TPP may become just another item of collateral damage in the war between Republicans and Democrats, leaving the Prime Minister to sweep up the pieces of his trade ambitions.

Meanwhile, China's President Xi Jinping signed major business and trade agreements during state visits to Malaysia and Indonesia, and he is now the undisputed star of the APEC gathering. And the Asian and Pacific press is filled with stories about whether Mr. Obama's Pacific pivot means anything at all.

The president cancelled his trip because the political situation at home is so dire – itself a worrying message to send abroad. America's status as the world's financial benchmark, whose bond is as good as its word and whose dollar is the real denomination of value in many markets, could soon be swept away, as Republicans and Democrats play a game of chicken while the nation rushes toward the Oct. 17 deadline of defaulting on its debt.

Economists everywhere warn that a U.S. default could create a global financial crisis worse than anything we saw in 2008. In Canada, federal deficits and unemployment would go sky high, with this country joining the developed world in its second crippling recession in five years.

Texas Senator Ted Cruz, who strongly influences conservative Republicans in the House of Representatives, laid out three conditions Sunday for raising the limit on the amount the United States government may borrow: major cuts to government spending, no new taxes, and postponing implementation of the Affordable Care Act, also known as Obamacare.

It is hard to imagine the Democrats ever agreeing to such terms. And Washington is running out of time to work out a deal, even if one is possible.

But before we cash in our American chips, it might be wise to remember that not all the news coming out of the United States is grim. The economy is showing real signs of life, manufacturing jobs are starting to return from offshore, and massive increases in shale oil and gas production could end the United States' dependence on energy imports.

And however polarized, paralyzed and ungovernable the country may seem today, it has come through worse. Since the Civil War, the nation has gone to the brink over Reconstruction, the Depression and the civil rights movement. This year is not 1968, when cities burned and assassins felled or crippled one leader after another. What is a partial government shutdown compared with that?

David Jacobson, when he was U.S. ambassador to Canada, liked to say that people have been betting against the United States for 240 years, and no one has collected yet. If Congress and the administration can find their way clear to lifting the debt ceiling, this too may pass.

John Ibbitson is the chief political writer in the Ottawa bureau.