I’ve spent hours going around in circles trying to understand what Trump’s puppet masters are aiming to achieve with their useful idiot and I often come up short. It makes little sense to me, but what does seem clear is that the US baseline for tariffs has always been 10%, the result of which is to imposes up to a 10% regressive sales tax on American consumers. Based on 2024 imports, this would generate around $410 billion in revenue as a baseline government income stream. What is vitally important to note though, is this is NOT revenue from the exporter, its revenue generated by the US government TAXING the importer, who then passes it on to the consumer.
Trade talks with China appear to have resulted in a 90 day suspension of the current tariff war, with each side reducing their tariffs by 115% along with a pause on other retaliatory tariffs. This will as ever juice up the US stock market and Trump will do his usual victory lap, but the reality is, it will just relieve the pain temporarily and allow each side to reconsider their position. I can tell you right now, this is a much bigger win for China than the US, because it’s already working with usual American trading partners to develop a trading network in which the US becomes less and less consequential.
Trump is building his narrative as usual, on a fantasy reality TV model, where optics trump facts. You will see that China will remain largely silent as Trump does his ‘we won’ made for TV moment, claiming the status quo to be the best trade deal ever. It’s tiresome and the markets will take the win so they can take a breather and wait for the next catastrophe. Meanwhile, China will be planning way ahead and continue pushing the digital yuan and the development of the DSR (Digital Silk Road) initiative. What Trump will paint as winning ‘bigly’ with a ‘big beautiful Chinese trade deal’, will leave Xi very content for two reasons.
It was Trump who had to call China to ask for talks to solve HIS mounting problems.
China has already moved on and sees the US as no longer critical to their long term economic planning.
Of course China does not want to decouple from the US that would be stupid. Xi like all Chinese leaders has a clear long term vision which hopes for the best, but is absolutely prepared for the worst. US arrogance has led Trump to make catastrophic calculations about China’s ability to withstand his attempts to break them. As I said previously, Xi can get his people to eat grass much easier than Trump can explain to Americans they can no longer buy cheap stuff.
Trump has found a new money making toy in his meme coin scam. In his infantile way, he’s seized an opportunity to enrich himself by exploiting the uneducated and the uninformed. To him, crypto currency is like taking candy from the uneducated and his gullible base. It’s also a way foreign governments can deliver untraceable bribes for favors. It’s the age old greed trumps everything. He simply sees no boundaries, whether it’s spending millions of taxpayer dollars to play golf every weekend, or the hundreds of millions spent on retrofitting a 747 jet allegedly gifted to him by the government who have funded HAMAS for over a decade.
The official position on the 747 story according to the UK independent, who reports, Ali Al-Ansari, Qatar’s Media Attaché to the US stated :
“The possible transfer of an aircraft for temporary use as Air Force One is currently under consideration between Qatar’s Ministry of Defense and the U.S. Department of Defense, but the matter remains under review by the respective legal departments, and no decision has been made,”
Putting aside what would be the astronomical cost of a retro fit to deal with the secure comms, counter measures and a host of security requirements. It seems incredulous to me, the US military would even sanction the jet’s transfer to military custody. How could they be sure there were no highly sophisticated bugs in the plane without totally dismantling it? In any event, there is the US constitution to consider. Article I, section nine, clause 8 of the US Constitution reads:
"No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State."
I could go on, but if Republicans in Congress allow this to happen, they are simply lost in a web of corrupt intent, where NOTHING will ever be too far for them to consider their convicted criminal leader to have overstepped the line.
Returning to the economy, what Trump fails to recognise amidst his arrogance and hubris is, while he is playing checkers, China is playing 4D chess. They are looking at crypto through a completely different lens. The digital yuan is backed by the Chinese government with a $1.2 trillion investment to deeply integrate it into the Digital Silk Road initiative, specifically designed to circumvent the dollar for international trading transactions. It has already been tested for Saudi oil purchases and is now live. Of course it’s early days, but that is EXACTLY how China rolls. It plays the long game. As the manufacturing hub of the world, it currently holds the upper hand. The US has been so obsessed with profit, just as it was when it shipped manufacturing jobs to China, it has failed to recognise just how far China has advanced using US money.
While the US were asleep at the wheel while swimming in profit from cheap Chinese labor for the past four decades, China was eradicating poverty, educating its future generations and building the most advanced infrastructure in the world. America has assumed as JD Vance would would say, ‘the peasants are incapable of tech innovation’. It is this that’s the most egregious mistake the US has made. China has not only built phenomenal domestic digital infrastructure, it has expanded it into Africa and South America. As part of the Belt and Road initiative, this then facilitates distribution of it’s manufactured goods to market. The final piece of that strategy is the Digital Silk Road plan designed to render payment systems like SWIFT irrelevant.
You might say, ah, but business loves the tried and tested SWIFT system, it’s the gold standard. Firstly it’s a dinosaur where trade transactions take days to settle. In contrast, using the new Chinese system takes around 7 SECONDS. If you’re a big business moving huge sums of money around, which would you choose? At this stage, I think western buy-in to the new system, is not viewed as a replacement for SWIFT and US reliant systems. It’s about insuring against them dominating trade transactions. It’s early days, but for me the writing is on the wall as China ties in all the developing markets to the new system.
Xi understands the importance of Asia Pacific trading and that’s where China has been focused, to ensure the US can’t break the trading alliances already in place. It has used these partners already to circumvent tariffs before the trade war. Trump’s heavy handed treatment of these countries has only served to build resentment. This will eventually lead to trade retribution from the countries Trump is bullying. It’s China’s hope, this will also extend to Europe and Canada too, where they are doing a lot of work to position themselves as trusted stable trading partners. In my view Trump and his acolytes brought a knife to a gunfight and the consequences have the potential to be an economic catastrophe for the US and that’s before we consider the selling off of US debt.
Even though the tariffs have been removed for 90 days, it will take weeks to get container ships back to US ports and re-establish the supply chains, only to face the same threat in three months. It does little to bring the certainty to markets and small businesses who feel they are being fiscally waterboarded by their own government. It chokes off inward investment and does nothing to stem the current capital flight that’s going on.
The truth is, trade deals take many months and sometimes years to implement and I fear given the current debt crisis, this is time they don’t have. Any smart prospective trading partner will be factoring that into any negotiations.
It’s not the tariffs that are going to sink the American economy, even though they are not helping. It’s the out of control debt that’s the kill shot and I have some detailed thoughts on that I’ll be sharing this week.
I’m hoping this series is helping to explain the big picture in an easy to understand way. Global macro economics is extremely complex, but What I’m trying to do here is break it down to kitchen table impacts and how it may affect you and your family. I believe that with understanding comes better decision making and I hope this helps with that.
Here’s the hard truth:
• Tariffs function as a consumer tax, and while they bring in short-term revenue, they also raise prices and trigger retaliation.
• Massive U.S. debt — over $34 trillion and rising — makes every economic misstep more dangerous. Debt servicing (just paying interest) will soon surpass military spending.
• Foreign divestment from U.S. Treasury bonds (especially by China) is a looming risk. If they sell off in bulk or stop buying, the dollar weakens and interest rates rise.
• Meanwhile, China is building an alternative global system that could slowly sideline U.S. economic dominance — not through war, but through infrastructure, trade, and currency innovation.
So yes — the debt is the kill shot, not the tariffs themselves. Tariffs just make the symptoms worse.
How the American people allowed this to happen is beyond me. Somewhere between outrage fatigue, partisan tribalism, and the endless distraction machine of modern life, a nation that once prided itself on pragmatism and fiscal responsibility now seems content to burn tomorrow for the illusion of winning today.
You have landed on the right target for GOP administration policy moves. However you are not close on the motive. Jackson as President sold huge amounts of land owned by the US government to wealthy people, some of them land speculators that were his friends, and paid off the debt. Kinda. The debt was paid down to not run a deficit. When the debt gets center stage, Trump (the real estate president) will sell off Federal land to people of wealth to pay off the debt to not run a deficit. Then he will proclaim ‘I saved Social Security!’ And We The People will have lost our public lands.