Is Trump saving America or ending the empire?

 Empires rise and fall.  

Is it now time for the American empire to come to an end?  Is this Trump's plan or is he unwittingly steering the country into it's demise?

Picking a fight with the Chinese is likely to cause pain. At the end of the day the USA has more to lose than China does.

Since Trump's Liberation Day and the introduction of tarriffs, shipping bookings from China to the USA are 45% down.  These goods were wanted so presumably this is going to lead to empty shelves somewhere in America, and no domestic producers to take the product places.

The pandemic taught us that global supply chains are complex and there can be shortages of unexpected items.  For example plumbing components in the UK became scarce.

40% of all imports into the USA are materials or components for products which will be finished in the USA.  That means these Chinese products will become more expensive with tariffs or potential cease to be available as China decides it's not worth the trouble of shipping them to the USA. Who knows what has been impacted in these shipping containers that were destined for the USA?

The USA stock markets have fallen by about 8% since Trump came to power and the dollar has weakened (making imports more expensive).

Some unlikely winners have emerged - countries with debt pegged to the Dollar, like Argentina, have seen their borrowing costs fall as the dollar becomes weaker.

Trump is right to raise that USA government borrowing has gotten out of control (he did his bit to make it out of control the last time he was in office).  However the Chinese have been awash with US dollars and bought USA government debt.  Doubtless the Chinese are now looking to off-load the Government debt making USA borrowing costs more expensive in the process.

If the mighty Dollar keeps getting weaker it may cease to be the world reserve currency.   We are already  seeing the price of oil falling as a result.  Maybe Saudi will elect to stop pricing oil in dollars?

The underlying problem is that the USA has racked up $145 TRILLION in debt and has a GDP of $29 TRILLION. USA assets are currently valued at $269 TRILLION but we are seeing stock market values falling.

It's easy to wipe out asset value but not so easy to wipe out the debt.  It is likely the USA will end up in recession so GDP will fall.  It will be more expensive to service the debt and given it's unlikely that the debt pile will reduce (far more likely it will increase), the cost of servicing the debt will climb. 

More taxes?  With asset pricing failling it will be more costly to borrow as the "security" value of assets starts to fall.

It's hard to see how this will not end in failure.

At least the collapse of the empire will be televised.

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