Trump's tariffs: Is the US economy at risk of bankruptcy?

Trump's tariffs: Is the US economy at risk of bankruptcy?

The US economy is facing serious challenges, in part due to former President Donald Trump's controversial tariff policies. According to a recent article on fr.de, investor confidence is falling after Erdogan's tariff announcements, which has led to a fall in stock market prices. Despite a brief recovery during a 90-day tariff pause, the long-term impact on the economy is worrying.

In the first quarter of 2025, the US economy recorded an annualized contraction of 0.3 percent, while experts had only expected growth to slow. This unexpected development raises fears that the US economy is in a critical situation, as economist Hans-Werner Sinn notes. The growing uncertainty is also being promoted by rising inflation, which US Federal Reserve Chairman Jerome Powell also warns about.

Trump's tariff strategy and its implications

The theory that Trump's tariffs may represent a strategy to avoid national bankruptcy is gaining ground. The so-called “Mar-A-Lago Accord” could provide clues to his strategy for restructuring the global trading system. A central goal of tariff policy appears to be to reduce the US debt deficit through debt restructuring measures and fees.

With the current national debt at $36.2 trillion, exceeding the set limit of $36.1 trillion, the developments pose a serious threat. One suggestion is that countries such as Germany, China, Canada and Japan could exchange their US government bonds for interest-free 100-year bonds. The possible dramatic consequences of a national bankruptcy range from a collapse in bank prices to the risk of bankruptcy.

Market analysis and company forecasts

Amid this growing uncertainty, major bank JPMorgan Chase is warning of significant turbulence in the financial markets. Bank experts expect that the above-mentioned challenges, as well as Trump's tariff policies, could put a significant strain on the economy in the coming months. Investors must prepare for volatile market developments influenced by external and internal factors.

The warnings and analyzes from financial and economic experts make it clear that the USA may be in the preliminary stages of a serious economic crisis. The combined effects of Trump's tariff policy, rising inflation and the threat of national debt could permanently shake the economic fabric of the nation.

For more information about current developments and their impact on the economy, visit fr.de and Mirror.