Though relations between Xanadu and the United States are never outright hostile during your tenure, as both nations attempt to expand or preserve their influence they inevitably begin to compete over resources and alliances over time. With no economic ties between the two states and little prospect of further integration as competition intensifies, relations between the two superpowers appear inevitably headed towards conflict.
Xanadu begins with an enormous technological advantage but the United States begins with an enormous material advantage. Over the first few decades after your retirement, these gaps rapidly close as Xanadu expands its sphere of influence over a network of military and economic alliances first with its neighbors, and then through much of resource-rich southern Africa. For its part, the United States develops, copies, or outright steals Xanadu technology, quickly developing versions of much of Xanadu high technology. As the two nations economies remain mostly isolated engaging in association with either states become a mutually exclusive affair. A collection of states outside their tight nit alliance network, a so-called “third world” of neutral states led by China, struggles to balance the interests of two powerful states competing for dominance.
Soon, as the ascendant power Xanadu begins pressuring the traditional sphere of influence of the United States, and the world experiences its first proxy war between two superpowers in nearly a century as Xanadu backed rebels battle an American supported government in South America. The world appears firmly headed towards a new bipolarity as two superpowers compete for global dominance.