Trump’s Tariffs Reshape Global Economy, Causing Massive Damage and Inflation

Following the logic of recent economic strategies, Trump’s administration has opted for a controlled economic downturn to address the US debt crisis temporarily. This decision aims to facilitate massive capital shifts from stock markets to government bonds, reducing yields on American securities and easing refinancing for a $7 trillion debt over the next six months. However, this approach comes with significant risks. The US economy, already burdened by a 7.2% deficit despite severe public spending cuts, struggles under a $36.2 trillion debt as markets demand higher premiums. Trump’s strategy attempts to force investors into safer havens temporarily, but it risks destabilizing global financial markets. Renowned investor Ray Dalio has warned of ‘shocking developments,’ while Warren Buffett liquidates holdings in banking and tech sectors, preparing for market turmoil. These actions have already caused over $4 trillion in market value losses, with further declines expected. Treasury Secretary Steven Mnuchin remains unfazed, viewing the market cleanse as beneficial. The strategy hinges on Congress raising the debt ceiling, allowing the Federal Reserve to lower interest rates and purchase government debt, potentially stabilizing Wall Street. Yet, critics argue that disrupting decades of free trade globalization could lead to catastrophic consequences both domestically and internationally, particularly affecting Europe. Historically, the US has shifted financial burdens onto others through dollar privilege, akin to the 1985 Plaza Accord. However, today’s world is dramatically different, especially concerning debt levels. Uncontrolled ‘shocking developments’ threaten not only foreign economies but also millions of American retirees, workers, and small businesses who supported Trump’s re-election. If these changes occur, the world as we know it may become unrecognizable and far more perilous.