Trump Policies Threaten Historic Credit Crunch as US Debt Nears $40 Trillion
Updated
Updated · The Independent · Aug 21
Trump Policies Threaten Historic Credit Crunch as US Debt Nears $40 Trillion
3 articles · Updated · The Independent · Aug 21
Summary
$40 trillion in US federal debt is not the trigger itself, but the report says Trump’s stance on Iran, tariffs and deficits risks tipping the world into a credit crunch unseen since the 1930s.
US borrowing costs above 5% at 30-year highs are colliding with weak growth, volatile oil and heavy global capital demand, raising doubts about governments’ ability to service debt.
Japan has already come under strain: efforts with Washington to support the yen proved temporary, and Japanese investors sold $32 billion of US Treasuries, with about $1 trillion more still held.
Britain looks even more exposed within the G7, with July borrowing £1.8 billion above expectations and the October budget facing tax rises or spending cuts that could deepen a fiscal “doom loop.”
The report argues the fastest way to ease the threat would be for Trump to end the Iran war, roll back tariffs and outline deficit restraint, restoring confidence in Treasuries and the dollar.