🌍 How Trump’s Economic Policies Could Trigger a Global Financial Crisis

By: Senior Global Economist / International Macroeconomic Analyst

■ Executive Summary
■ Policy Breakdown and Risk Assessment
■ Global Ripple Effect: A Three-Phase Shockwave
■ Conclusion and Recommendations
1. Policy Recommendations (for global central banks and governments):
■ References

■ Executive Summary

As former President Donald Trump’s return to the White House in 2025 becomes increasingly likely, concerns are mounting about the potential global financial instability triggered by his economic agenda. His flagship proposals — the One Big Beautiful Bill (OBBB) for massive tax cuts, aggressive protectionist tariffs, political interference in the Federal Reserve, and the weaponization of the U.S. dollar — may stimulate the U.S. economy in the short term but pose serious medium- to long-term risks of a global financial crisis.
This report analyzes how these policies, when combined, could threaten the very core of the global financial order, making the case that “the next global crisis could start from the White House.”

■ Policy Breakdown and Risk Assessment

Massive Tax Cuts (OBBB) and Fiscal Expansion

Trump’s OBBB tax plan includes major corporate tax cuts, investment incentives, and high-income tax breaks.
Without matching spending cuts, U.S. deficits could exceed $2 trillion annually, pushing debt-to-GDP past 150%.
Result: U.S. Treasury downgrade, bond market instability, and rising interest rates.
Dollar-denominated debt repayment becomes unsustainable for emerging markets.

📉 Risk Indicators:

Rising U.S. CDS spreads (default insurance)
10-year Treasury yield stabilizing above 4.5%

2. 70% Tariffs and the Return of Protectionism

Trump proposes up to 70% tariffs on imports from China, Mexico, Japan, and others.
Breakdown of global supply chains → Input cost spikes → Global stagflation (stagnation + inflation).
Unilateral trade actions may spark retaliation and WTO fragmentation.

📉 Risk Indicators:

Falling Baltic Dry Index (global trade volume)
Sharp decline in manufacturing PMI in Europe, Japan

Federal Reserve Interference and Policy Distortion

Trump has openly criticized and threatened to remove Fed Chair Jerome Powell.
Political pressure may lead to artificially low interest rates, undermining monetary credibility.
Risks of a second inflation wave, particularly in housing and energy sectors.

📉 Risk Indicators:

Divergence between Fed Funds Futures and actual Fed guidance
Sudden drop in U.S. Dollar Index (DXY)

Dollar Weaponization and the Breakdown of Financial Order

Under Trump, financial sanctions, SWIFT exclusions, and U.S. asset freezes were heavily used.
In response, China, Russia, and other BRICS nations accelerate de-dollarization.
This challenges the dollar’s reserve currency status and undermines the Bretton Woods framework.

📉 Risk Indicators:

Decline in USD share of SDR basket
Increase in gold and yuan reserves by central banks

■ Global Ripple Effect: A Three-Phase Shockwave

Phase	Key Impact	Affected Regions
Phase 1	U.S. debt crisis, interest rate shock, stock sell-offs	U.S. and major economies
Phase 2	Capital flight, currency crises	Emerging markets
Phase 3	Global tightening, credit freeze	Europe, Japan, global economy

■ Conclusion and Recommendations

Trump’s “America First” economic policy paradoxically risks creating a “Global Risk First” environment.
The combination of fiscal irresponsibility, monetary distortion, and trade conflict sets the stage for a global crisis of confidence, particularly in the U.S. dollar and Treasury markets — the foundation of modern finance.