Trump’s Tariffs Could Cause Huge Global Crisis
The US designed the global financial system in a way in which the US dollar is at the center, and other countries need to get access to dollars to pay off their dollar-denominated debt, and to pay for imports.
Yet, in order for this system to work, the US has to run a deficit with the rest of the world, a current account deficit, so other countries can get those dollars.
But Trump wants to disrupt this. He says he wants to tariff other countries to reduce the US trade deficit, which means that other countries won’t be able to get the dollars they need to pay off their debt and to pay for imports.