The Guardian view on Trump’s economic threats: bullies can overplay their hand
Three moves in the last week have exposed the limits of Donald Trump's economic bullying. The US has used tariffs, war, and cuts to social programs to control borrowing costs and raise others.
Intelligence analysis by Qwen 2.5 (3B)
The US president is using state power to lower borrowing costs while raising others through tariffs, war, and cuts to social programs, but this approach has limits.
The US president is using his power to make borrowing costs lower for some people, but making others pay more. This is like when you borrow money from a friend and promise to pay them back, but you also take their toys or candy. The US president is doing this to make people pay more for things, but it might not work as well as he thinks.
Analysis
The US Tariffs on Canada
The US has slapped 50% tariffs on another $20bn of Canadian goods, and threatened the same rate on the cars, trucks, parts, and steel that America Inc depends on. This move is seen as a test of the US's economic power and its willingness to use tariffs to control borrowing costs.
US Treasury's Bond Market Intervention
Scott Bessent, the Treasury secretary, has stepped in to control the bond market, stepping in to tame long-term rates. This move is seen as a gamble, as the US has leverage but China has pressure points that make using it costly. The US president is willing to use state power to lower borrowing costs while hiking others through tariffs, war, and cuts to social programs.
The US-Iran Relationship
The US has threatened Iran's trading partners with exclusion from the US financial network, hoping that coercion can deliver what months of war have not. This move is seen as a test of the US's economic power and its willingness to use sanctions to control borrowing costs.
The US-China Relationship
The US has largely given up trying to change China's economic model. Canada is seen as a soft target, and the US has used tariffs to make US manufacturing more expensive. The US president thinks their dependence is his weapon, but this approach has limits.
Key points
- The US president is using tariffs, war, and cuts to social programs to control borrowing costs and raise others.
- The US president's economic tactics may not work as well as he thinks, and other countries may start looking for ways to reduce their dependence on the US economy.
- The US president's economic tactics could lead to a trade war with China, which could have negative consequences for the global economy.
The US president's economic tactics may not work as well as he thinks, and other countries may start looking for ways to reduce their dependence on the US economy.
The US president's economic tactics could lead to a trade war with China, which could have negative consequences for the global economy.
