Four Clear Objectives Since Trump’s Victory

Since Trump’s return to power, four key agendas have emerged:

1) Economic Sanctions on Countries Using Non-USD Currencies: Any nation using a currency other than the US dollar for international trade will face economic punishment.

2) Reduction of Trade Surpluses with the US: Countries maintaining trade surpluses with the US must reduce them.

3) Federal Workforce Cuts to Reduce Government Spending: Shrinking the federal workforce to curb public expenditure.

4) Forcible Annexation of Greenland and Possibly Canada: Expansionist ambitions to acquire Greenland and, if necessary, Canada.

Analysis of These Objectives

1) Defending Dollar Hegemony: The first point confirms Trump’s intent to preserve US monetary dominance, resisting any challenge to the dollar’s global reserve status.

2) Trade Deficit Reduction: The second suggests the US can no longer sustain its trade deficits, signaling a decline in its role as the world’s demand hub. However, maintaining dollar supremacy while reducing trade deficits is economically contradictory.

3) Budget Deficit Control: The third highlights the urgency to cut US government spending, particularly the budget deficit.

4) Territorial Expansion for Economic Growth: The fourth reveals Trump’s desire to boost US land, population, and economy through forced annexations. This would require either increased military spending or redeploying global military assets to the Northern Hemisphere. Given the third objective (budget cuts), redeployment seems more likely.

Why the Dollar’s Strength Worsens US Trade Deficits

A nation’s currency strength reflects two factors: military power (enforcing tax collection and monetary compliance) and economic power (production flow and accumulated wealth).

- Trade Surplus vs. Capital Surplus: A country with both trade and capital surpluses has the strongest economy, making its currency dominant. However, complexities arise when one country leads in trade surplus while another excels in capital surplus.

- Production vs. Asset Valuation: High currency value increases production costs, reducing demand and output, while inflating asset prices, attracting more investment. Thus, a reserve currency nation sees declining production but rising capital inflows, exacerbating trade deficits but inflating capital account surplus.

Historical Precedents: Currency Manipulation

- 1971 (End of Bretton Woods): The US devalued the dollar to reduce trade deficits, diminishing the value of German and Japanese investments in the US.

- 1985 (Plaza Accord): The US forced Japan to appreciate the yen, curbing its trade surplus.

These actions worked because Germany and Japan lacked military autonomy. But China in 2024 is different:

- It has a powerful military and  has surpassed US manufacturing output (3x larger).

- Its PPP-adjusted GDP is 23% higher than the US.

- With almost four times the US population, China’s economic dominance is inevitable.

Trump’s Strategy: Coercive Measures

- Tariffs: Imposing tariffs on trade-surplus nations (e.g., China, Vietnam, India) to force trade rebalancing.

- Historical Parallels:

- 1757 (Battle of Plassey): Britain colonized Bengal to convert its trade surplus into a deficit.

- Opium Wars (1830s): Britain forced opium trade on China to offset deficits.

What Trump Wants?

Trump wants to forcefully sell to the rest of the world. Trump doesn't want lower tariff on US imports as it's already very low. Trump's Faulty Avge Tariff = Trade Surplus with USA/Exports to USA. This is not about reducing Tariff on US imports to reduce US trade deficit. This is about Trump forcefully selling US unsaleable products to the Rest of the World.

Trump Wants to Loot

Trump aims to extract foreign earnings through coercion, mirroring colonial-era exploitation. This is because market forces ensure that US hegemony through US dollar domination in global transactions are reducing the income base of USA while raising its debt simultaneously. To counter this rising debt/income ratio, Trump is trying to force sell US exports to the Rest of the World and reduce trade deficit or add forced export income to reduce US debt/income ratio. Reducing Federal workers is also about adding income to reduce the debt/income ratio. Colonizing neighbouring countries also imply adding income to US economy. We must remember that it was uncompetitiveness of Western production vis-a-vis Asian kingdoms between 16th century and 18th centry that resulted in trade deficit for West vis-vis Asian kingdoms. And colonialism was the method to counter this trade deficit. So Trump's policies are nothing but colonial policies stemming in from the fact that US hegemony is weakening US production. 

The Unsustainability of Trump’s Policies

- Tariffs Backfire: Higher import costs reduce demand, shrink global trade, and lower US income, leading to:

- Stagflation (rising prices + falling production).

- Higher interest rates, deterring investment in US manufacturing.

- Capital flight from Rest of the World to USA for asset speculation, further inflating the dollar and hurting US exports.

- Military Expansion vs. Austerity: Cuts to federal jobs (not military) aim to balance debt-to-income ratios, but US middle-class and weak nations bear the brunt.

The Way Forward for Vulnerable Economies

1) Reduce Dependence on US Markets: Diversify exports to China, EU, Japan, and emerging markets (Arab states, Russia, Latin America, India, SE Asia).

2) Boost Domestic Demand: Increase public infrastructure investment and worker productivity.

3) Adopt Alternative Currencies:

- China’s Digital Yuan: Launched in 15th March, 2025 processed global transaction of value US $1.2 trillion within 3 weeks. Supplemented by Beidou Satellite Navigation and Quantum Internet Digital Yuan can effect cross border transactions in 7 seconds while it takes 3–5 days via SWIFT, the code method usind in US Dollar cross border movement.

- Euro/Yen: Expand usage to reduce dollar reliance.

4) Long-Term Resilience: Short-term compliance may be necessary, but **de-dollarization, domestic market growth, and productivity gains** are essential.

Conclusion

Trump’s policies—protectionism, coercion, and militarism—are a throwback to colonial plunder. Trump has to do this as US Dollar domination in global transactions entail ersosion of US production on one hand and powerful asset market on the other hand. So USA keeps getting global credits while its income base keeps getting eroded. So Trump wants to forcefully sell its uncompetitive products to the rest of the world to enlarge its economic base that will help it to sustain the debt that US asset market is absorbing. While they may temporarily mask US economic weaknesses, they **accelerate global de-dollarization** and **weaken long-term US competitiveness**. The world must prepare for a **multipolar financial system**, reducing reliance on the dollar while strengthening domestic economies.

Author: Saikat Bhattacharya