As David Byrne wrote, 'We're on a road to nowhere'

I'm still in search on an upside for the US economy, but alas, all I see is a fairytale concocted by a malignant narcissist forced to return $81 billion in tariffs to date.

Jul 14, 2026

I can’t think of a time in modern history when so much damage has been done to so many by so few. Trump now finds himself in a hole so deep that the chances of his rescue seem more remote by the day. Joining him in that hole is the fate of millions of hard-working Americans whose only crime is to be part of the bottom 90%. A once-great nation has been made great again, but only in the fairytale narrative created by a butcher of the English language obsessed with self-preservation and personal greed.

As the Iran situation spirals out of control, Trump is being forced to face the limitations of bombs and threats to a country where religious fundamentalism is deaf to his ludicrous performative antics. They understand and have become masters of an asymmetric response to the US conventional military threat. They also understand the damage that the war is doing politically to him and the Republicans as the midterms approach. As a result, they are happy to continue this war for as long as it takes, especially given the daily cost to the US.

The insurance companies that insure the ships travelling through the Strait of Hormuz now find themselves once again facing a situation where the risks outweigh the rewards, and this is set to worsen over the coming weeks and months, as traffic will once again grind to a halt. It’s worth reminding ourselves that before the war started, there was toll-free freedom of passage for ALL shipping through the Strait. There’s nobody to blame for that not being the case but Trump. It didn’t take a seasoned diplomat to understand that the MOU wasn’t worth the paper it was written on, because neither side could be trusted to honour it.

We now find ourselves in a situation where shippers are being asked to choose which terrorist to pay in order to secure safe passage. Many may not remember, but in the initial stages of negotiations, Trump touted his openness to a joint agreement to share tolls with Iran. Now we find that Trump has declared himself ‘The guardian of the Hormuz Strait’ and is literally setting up a protection racket which will cost shippers a 20% tax on their cargo. In his words:

To be clear, before February 2026, no tolls were levied for passage through the Strait of Hormuz. What Trump forgets to mention in his statement, is that this situation is one of his own making, and he is now asking the world to pay the cost of HIS mistake. In any event, as noted by John McCown, a senior fellow at the Centre for Maritime Strategy :

As a rule of thumb, shippers pay carriers 2%-3% of the value of their goods in fees

The imposition of such a toll would make shipping goods unaffordable. That’s before we consider the real possibility that a shipper could pay the toll and Iran could still hit their ship unless Trump wants to go to the expense of tying up even more of the US Navy to provide an extensive escort service. The costs involved are already prohibitive for the DOJ budget, as we see Hegseth already begging Congress for more money to fund this failed war. No matter what Trump puts on the table for shippers, it’s the insurance companies that will dictate whether ships will pass through the Strait.

Then there’s a matter of whether charging a fee to escort ships through the danger area is legal. You might be surprised to note that, in the opinion of James Kraska, a professor of international maritime law at the US Naval War College, it WOULD be legal to provide the service for a fee, provided it’s voluntary. As reported by Elisabeth Buchwald for CNN, she quoted Kraska stated:

“The last time the world faced a situation like this was when Denmark charged foreign vessels for passing through Øresund, from the early 1400s through the mid-1800s. Dues were also assessed on declared cargo value,” said Bjorn Vang Jensen, executive industry adviser at Xeneta‏, a freight analytics platform. “Ironically, that practice was stopped by American intervention.”

The copious dose of irony this regime delivers to the world never ceases to surprise me. The reality is that the cost of missiles to protect against cheap one-way drones and Iranian missiles would mean that any escort service offered would result in a catastrophic loss for the American taxpayer, over and above the now-estimated $113 billion, as recorded by the Iran War Cost Tracker. That’s a hell of an expensive lost war. A war, might I add, that few Americans agree with. There still remains no exit strategy. Trump’s whole position is now a joke. A ‘shit hole country ’, as he would describe it, is now tying up huge military resources, once again, resulting in further global economic instability.

Illustration by Matteo Giuseppe Pani / The Atlantic

There is no escaping the fact that this conflict with no end game is now affecting the lives of every American who needs to put food on the table, fill up their car and service ever-increasing loan, rent or mortgage payments. Trump can claim all day long that the affordability crisis is a ‘Democrat hoax ’, but bank balances don’t lie, and neither do cash register receipts from the supermarket. Americans are hurting as wages fall behind inflation, while their tax dollars are now paying over $1 trillion this year to just service the interest on out-of-control government spending to keep the rich in private jets and yachts.

Tariffs were hailed by Trump as the saviour of the US economy, but following the Supreme Court’s ruling that many of these tariffs were illegal, the government has already been forced to refund $81 billion of its tariff revenue, a process that began in October 2025 and continues. If you consider that these TAXES were largely passed on to you as the consumer, the only winners again are the large corporations that paid the original tariffs, which have effectively had a ‘double dip’. A real ‘win-win ’, I would say, but NOT for you as you lose again. Ever was it so, I’m afraid.

As reported by Lauren Almeida in The Guardian earlier today, she notes:

Trump had pitched the tariffs as a catch-all fix for the economy, bringing factories back to the US, getting better trade deals and closing the deficit in the federal budget.
But the deficit, which had become a little smaller last year thanks to the tariff income, is now growing again. It hit $1.367tn in the first nine months of the fiscal year, up 2%.

Image - Chip Somodevilla/Getty Images; stamp: arcady_31/getty images

The point is, it was all part of Trump’s fantasy-reality-TV narrative to create the illusion of economic success. Unfortunately, none of the promises made has been delivered. Jobs have not been reshored, imports are rising while exports fall, and all he now has to show for all his lies is an AI bubble that looks set to burst while the US is holding $40 trillion in national debt. The Iran war is costing tens of billions of dollars each month, with no end in sight, as groceries rise along with energy and gas prices. With defence spending rising by 5% at the moment, interest payments on debt exceeding $1 trillion a year, and with these, costs set to increase further over the current budget cycle, there is no possibility this will end well.

I could sit and write about what Trump has said today or who he’s upset with, but that would be exactly what this regime would want me to do, because it serves their ‘look over there’ strategy on which their whole political agenda is built. It is no exaggeration to say that the sand on which this regime built its oppression and fiscal mining of the bottom 90% is undergoing a structural rupture, an economic aortic dissection, if you will, and the clock is ticking.

What Americans need to understand is that the information bubble in which they are currently held hostage by a malignant narcissist and his uber-rich enablers is hiding a truth that, at some point, will collide with their sense of distorted reality. Be in no doubt when the market correction happens, as it will, the asset class WILL hurt, but it will be a scratch compared to those in the middle and at the bottom who will be forced onto economic life support.

Photo-Illustration: WIRED Staff; Getty Images

The huge miscalculation Trump and the sycophants who enable him have made is that the world is slowly disconnecting from the US dependence because it has simply become an unreliable partner both in trade and security. As I have mentioned previously, Europe is now working very hard to disconnect from US big tech and the US Military Industrial Complex. What has taken 80 years to build cannot be dismantled overnight; it will take time. But once the cord is cut, the world will change irrevocably, and that WILL become a BIG problem for the US.

Trump wanted Europe to take care of its own security, and that is slowly happening. The huge problem the US administration has created is unleashing the German Military Industrial Complex, which is now quietly ramping up capacity along with the other European arms manufacturing nations. As the US goes to war with science and research, Europe is now welcoming this highly skilled community into the fold with attractive incentives and a much better work-life balance. Much as Trump would like to think that the world revolves around America, IT DOESN’T. European innovation is alive and well and getting stronger by the day, now through necessity, as a direct result of his stupidity.

Current economic studies show that if you strip out AI and AI infrastructure activity from the economy, the US is NOT growing or growing nominally. Once you have all your eggs in one basket, that becomes very high risk, and every indication is that while the US might have the edge on AI frontier models, the Chinese are close behind now, using their own chips. The Chinese models are open source, but above all, they are a fraction of the cost of their American competitors

To help this make sense, you should be aware that AI is priced in tokens. For simplicity, we will call one word a token, but that’s not strictly true. If you want a more detailed explanation, I have linked a video about AI tokens below

What was always going to happen in the US is now starting to occur: businesses that have heavily invested in AI on the promise of a greatly increased bottom line are now finding that AI token costs are slowly becoming prohibitive. In some cases, they are even costing more than the human labour they replaced.

At its most basic level, AI LLMs are relatively cost-effective; that’s why users of ChatGPT can access day-to-day question-and-answer services provided by consumer models at a reasonable price. Even then, users still encounter timeouts as token allocations are exhausted. In a commercial setting, however, things change dramatically. AI in the enterprise is being largely used in what is known as ‘agentic’ form, i.e lots of AIs working in partnership to deliver real-world solutions for business.

The problem businesses are finding is that, much like EV drivers suffer from ‘range anxiety’, users of agentic AI deployments are now suffering from ‘token anxiety’. A number of AI agents working together can use up tokens at an alarming rate, to a point where businesses are seeing a rapid decrease in economic viability. This is absolutely crucial to my rambling about ‘big picture’ economics in a geopolitical landscape. The thing to bear in mind is that even though this is becoming an increasing problem, the AI companies still find it all but impossible to turn a profit. Indeed, I believe that taxpayer bailouts are just around the corner, certainly for OpenAI.

The reason I think this is a big problem for the US economy is that Trump has bet the house, the car and everything YOU have, on HIS gamble, even to the point of protecting it from regulation and green-lighting environmental destruction and water table damage. It is unquestionably a recipe for disaster, and rest assured, the American taxpayer will be on the hook for the cost of attempting to win a race they just can’t win, because the Chinese approach is fundamentally different, which we’ll discuss tomorrow.

We’ll look at the differences and examine why the US is not best placed to win the race. This should then enable me to discuss the steps required to level the economic playing field so that the US is not a nation that serves the few at the expense of the many. I suspect that many Americans at this moment still see themselves as doing OK and feel they can withstand some economic pain if there is a downstream benefit for them. These are the people who are encouraged to look at those below them in the economic food chain and believe ‘that couldn’t happen to me’. To those people I would simply say ‘don’t be so sure’.