Nation states with unlimited amounts of money to print don't care about fees on the Bitcoin network. 

If they use Bitcoin, they transact in amounts that makes the fees not event a rounding error. And they print the fee anyway.

The higher the fee (5%, 10%, 25% or more), the more people are pushed out of self-custody. They either choose Liquid or LN custodial providers, or use other tokens.

If custodial Bitcoin is not Bitcoin, then Bitcoin is not for everyone.