holders may demand concessions before continuing to finance it. Treasury yields have already risen, making new debt more expensive, and China, the second-largest holder of US debt, is suspected of shedding bonds to help do so.
China has also retaliated by raising its own tariffs and recently halting exports of some rare earths and critical minerals essential for modern technologies. Its state-backed firms can flood global markets with cheap goods and advanced tech, squeezing out competitors.
With a growing presence in international institutions and trade blocs, Beijing could increasingly shape global economic norms if these institutions and agreements become more fluid and the US steps back.
Trump also wants to devalue the dollar to make US exports more competitive, but insists on keeping the dollar as the world’ s reserve currency, which eases access to cheap debt. His approach is undermining global confidence in the dollar, even if no clear alternative has emerged yet.
Trump’ s pressure on a resistant Federal Reserve to cut interest rates further reflects limited borrowing options and coordination in US financial policy as he embarks on major economic upheaval.
Democrats have largely avoided serious condemnation of Trump’ s policies, recognizing it may be a losing political strategy. Still, some top members like Chuck Schumer and Gavin Newsom have marked early opposition, along with seven GOP senators who recently voted against Trump’ s Trade Review Act.
Trump’ s policies have some support from the US business class, which once saw China as a promising market but now sees it as a rival. No longer limited to cheap goods, Chinese companies like Temu, Shein, and