Donald Trump is Here

Oct 2006: I wide open my eyes. It’s the new Honda Civic. It’s called the REBORN. I’m in awe, examining the car on this new glossy magazine I’ve found. I dream of driving it one day and calling it my own. I wish for something like The American Dream to happen in my country. All this so that I could afford this new Honda Civic Reborn.

It’s been portrayed in too many Hollywood movies: The American Dream. It’s something that made me fall in love with the USA, an idealistic place where everyone’s rich and stable, where people can get pretty much everything they want.

It’s a place where stars like The Backstreet Boys and Michael Jackson live, where all my favorite Disney movies were made. Way back in my childhood, I used to believe they have a Magical Disneyland Kingdom and I could literally share a thing or two with Simba from The Lion King and tell him how big of a fan I was.

I would get excited just to think of it. As a teenager, I would watch these cool high school movies where kids were all super stylish in their dresses and would hop on in some crazy adventures. I would want to copy that, to wear similar clothes and hang out in a similar way. It was cool to replicate something that happens in America. America was that much magical to me.

As I grew older, my mind started shifting drastically. I started viewing America differently. It took a 360-degree turn to realize the US isn’t the country I used to dream of in my childhood. It’s no longer called the land of dreams. And Yet it remains the center of the world.

If America was a person. I would write a letter. Or I would send him an email, I would tell him how great I’ve thought about you. That You’ve been a childhood hero to me. And it disappoints me to see you were not the person you are today..

Today’s America is in shambles. The society is a wreck. Inflation has been unforgiving in the past few years. Their debt is sky-high and seems to go up and up infinitely like this universe, up to $34 trillion,

As I’m writing this, the US government has borrowed more emergency loans in 2023 than it did during the notorious 2008 financial crisis.

It borrowed more money during Joe Biden’s reign than it did during the COVID years.

COVID borrowing was reasonable though. It was at 0% interest rates. But lending during the Biden boom was at 5% interest rates. This has created paying interest as the second biggest expense for the US government. Much greater than defense or medicare.

And all the debt that I’ve talked about above- American citizens own 79% of it.

This all happened while the US dollar lost 25% of its value in the past 4 years.

De-dollarization is happening fast. Countries are on the move to drift away from trading in dollars. Sanctions against countries like Iran and Russia have caused minimum damage and instead have backfired straight back to the allies’ backyard.

As Donald Trump takes the reign, will he be able to turn all this around? Even a little bit?

At first, Trump wants America to less rely on foreign parties. These foreign parties have invested heavily in the US, with China being the biggest investor. And believe it or not, the US owes them big time.

Throughout the years, this dependency has only increased and has turned America reliant on the same countries it wants to impose heavy trade barriers on.

You don’t need to be an economist to understand this. Ever wondered why Chinese goods are so cheap in the US? Well this could be one of the reasons. When someone lends money to you., they tell you to do some stuff for them. And you do it. Cause they have this leverage now.

The 3 biggest holders of US debt are Japan, China, and the UK.

And when you combine all the debts including the ones borrowed for future projects and running the economic operations, it would amount to $175 trillion!

The below screenshot is from the US annual report of 2023.

Believe it or not, things can turn around in years if the right measures are taken. But the question is: is Donald Trump willing to go to the required extent?

The Tariffs Delima

This needs a separate discussion. Donald Trump has said multiple times to impose 10% -20% tariffs on imports from other countries. But not for China.

A 60% tariff will be put on anything that comes from the Asian giant. This is a bold statement from a man who has little to show how will he equal that high difference.

The brunt of the Tariffs will cause inflation and market shortages. The worst part is that it could trigger retaliatory tariffs from China as well as other countries.

Unlike China, the US economy is a highly globalized one. It relies too much on imports. Tariffs could worsen the trade relationship.

Sameer Zanzana wrote on Proof Point in August that despite earlier tariffs in 2018 and 2019, the US still stands heavily dependent on foreign goods. The country has failed to increase its domestic production to a level of self-reliance.

While the trade deficit between China decreased, imports from other countries saw an uptick.

China was still exporting to the US, this time with intermediary countries. Mexico is one of those intermediary countries. China had invested $267 million in 2018. This surmounted to $5.6 billion in 2023. The same goes for Vietnam, Malaysia, and Thailand where China has poured in billions to establish factories and export goods to the US.

Due to this, the US has seen a surge in imports from Mexico, along with other Southeast Asian countries.

It’s been made clear that introducing new barriers to China would increase Chinese investment in other countries to circumvent it.

A dangerous scenario could be imagined if these tariffs result in other countries putting their own set of trade barriers on the US. This will hurt exports which were 12% of its GDP in 2022.

When this happened in 2018, the agriculture sector of the US saw a loss of $27 billion with 95% of it causing due to China.

It was because the US had put tariffs on imported aluminum and steel.

As a result, not just China, but Mexico, Turkey, India, and the EU put on their own set of tariffs.

It is important to note that many of these countries are US allies and even they decided to rely less on US goods. You can see the data in the report named The Economic Impacts of Retaliatory Tariffs on U.S. Agriculture published in 2022.

Actions like these could hamper trade relations with many countries including some of the allies. Speaking of allies..

Moving Away from Alliances

Donald Trump has had enough of the alliances. In 2024, the US accounted for 66% of the entire NATO spending ($967 billion on defense) around 3.45 of its GDP. it bears 47% of the NATO burden, a downfall from 70%.

Donald Trump wants every other member to contribute equally. And if they don’t, he has no problem leaving the alliance.

Leaving the alliance will put Europe in a vulnerable spot. It would further be difficult to fund the West’s ambition to equip Ukraine against Russia. Funds will fall short when it’ll come to strengthening Israel.

Trump has made some other bold promises: Ending the Russia-Ukraine war in 24 hours, empowering crypto, and drastic measures to revamp the education department. For that to happen, he needs to go out of the way and go against many. And I believe in the end of his second term, he would either be labeled as someone who’s never come before, or someone who’s come every 4 years.