Global tariff increases, Trump intentionally creating an economic recession in the United States to resolve the $36 trillion debt crisis.

Many people are saying whether Trump has gone mad, increasing tariffs globally. The result of this is that corporate costs are passed on to consumers, and American consumers' wages have not increased. This will only make "free shopping" more severe in the U.S.

Have you ever considered that Trump may be deliberately trying to cause a U.S. economic downturn with the purpose of resolving the U.S. debt and fiscal crisis? There's even a term for it abroad now, called the "Trump Recession."

The U.S. manufacturing industry relies on global supply chains. Now, due to tariffs, raw material and component costs are skyrocketing. Companies either raise prices, which further suppresses consumption, or they absorb the costs themselves, leading to a plunge in profits. But after the profit drop, companies either go bankrupt or lay off workers.

And the U.S. is a consumption-driven economy. When consumption stalls, the economy loses momentum, and businesses face bankruptcy.

This creates a vicious cycle of "business failures → rising unemployment → further consumption contraction."

In this case, the Federal Reserve must step in to stabilize the market, which means cutting interest rates. The result of cutting interest rates is a devaluation of the dollar. A weaker dollar effectively reduces the actual value of the debt, alleviating the debt crisis while also enhancing the competitiveness of U.S. manufacturing.

Moreover, after interest rate cuts, consumption can be stimulated, helping previously tariff-damaged U.S. enterprises recover and boosting the competitiveness of U.S. manufacturing.

We can look at the much-discussed "Mar-a-Lago Agreement" to understand this better. After the dollar devalues, Trump might restructure America’s massive $36 trillion debt. According to rumors, Trump plans to convert U.S. Treasury bonds into 100-year bonds, non-transferable, and interest-free. In this way, Trump could avoid repaying over $30 trillion in debt and over $1 trillion annually in interest payments.

This would also solve the U.S. budget deficit. Additionally, because of the global tariff increases, U.S. fiscal revenue could increase. Tariffs are like Trump borrowing money from Americans without having to repay it.

Doesn't this sequence of moves seem very smooth? Trump knows that an economic downturn is unavoidable, so he chooses to intensify the tariff war, setting off the bomb early to push the economy into an earlier recession.

In this way, the U.S. resolves its debt crisis and fiscal crisis. Thanks to America's unique geographical location, it can retreat back to the Americas to live its own life, regardless of whether the outside world is in turmoil. In other words, after America undergoes a painful self-renewal, the rest of the world provides aid to help it recover.

However, Trump faces several problems, such as issues of execution and his personality. A good strategy does not guarantee successful implementation; this is a risky move. If executed poorly, the U.S. will be all-in. Moreover, Trump's extreme personality means he might act recklessly if provoked.

Then there's external retaliation, which could deviate from Trump's expectations. Because Trump imposes tariffs, he harms global interests, and other countries will retaliate.

Trump also faces the biggest crisis from the Democrats. If Trump wants the economy to decline, the Democrats might directly blame him, triggering a Wall Street financial collapse and sending the U.S. back to the Hoover era.

This way, the Democrats could win in the midterm elections and achieve their goal of toppling Trump.

Original source: https://www.toutiao.com/article/1828367823556745/

Disclaimer: The article solely represents the author's personal views.