Recently, everyone has been talking about the tariff war initiated by Trump. On the surface, it seems aimed at bringing manufacturing back to the U.S. and achieving trade balance, but it’s not that simple. This was not a spur-of-the-moment decision made by Trump; instead, it reflects deep changes in the global economy, politics, and geopolitics. Ray Dalio, the head of Bridgewater Associates, has mentioned that this tariff war conceals a major reshuffling of the world order. Today, let’s delve into this topic and see what it has actually brought about.
I. The Collapse of Monetary Order: How Much Longer Can the Dollar Hold?
First, let’s talk about the first major change: the shaking of the global monetary order. This goes back to after World War II, when the US dollar was linked to gold, and later to oil, becoming the “petrodollar,” a status that was unshakeable. The United States thrived on this system, printing a bit of money while the cheap goods produced by countries around the world continuously flowed into the hands of Americans. But what about other countries? After all that hard work, they ended up with a pile of green paper. What to do when there’s no money? The US just prints more or borrows. Now, the US owes $36 trillion, becoming the world’s largest debtor. What does this $36 trillion mean? With 300 million people in the US, if converted to RMB, that averages to about 700,000 to 800,000 RMB in debt per person. How is that going to be repaid?
Among this debt, there are 90 trillion maturing in 2025. What if it can’t be paid back? If new debts can’t be borrowed, the U.S. will have to default. If it defaults, credit collapses, and the dollar system will follow suit. This is a major driving force behind Trump’s tariff war, called “a desperate gamble.” In essence, his tariff war is just “sneaky plundering,” trying to extract more money from other countries. But doing so destabilizes the dollar’s position, shaking the global monetary order. When one order collapses, how many years will it take to rebuild a new one? Some say it’s like passing the buck; eventually, you have to pay it back. But when this buck reaches the end, who will take over? Japan and our country, as major creditor nations, have bought so many U.S. Treasury bonds; the pressure is quite significant. So this is not a short-term issue; it’s a long-term change that we will have to keep an eye on over the next few years.
II. The chaos of domestic political order: Cooperation is gone, division has arrived.
To talk about the second change, the domestic political order in the United States and many other countries has become chaotic. Since Trump’s return, from 2016 to now, the entire Western right-wing ideology has risen again. What is the right? It is nationalism; the U.S. shouts “America First,” while in Europe they shout “France First” and “Germany First,” anti-immigrant, anti-globalization, and some are even anti-EU. They believe that their national interests are the most important, disregarding the idea of win-win or multi-win! They feel that if you profit, I must lose; if I profit, you must lose, it’s a zero-sum game.
This atmosphere is particularly evident in the United States. Previously, the Republican and Democratic parties could sit down, negotiate, and cooperate a bit, but now? They’ve completely torn apart. The U.S. is aggressive abroad, and it’s the same domestically. In Congress, the Democrats oppose whatever the Republicans say, and the Republicans do the same; there’s no compromise, and the political order has collapsed. Just look at it now, the two parties in the U.S. are fighting like enemies, there’s not even a basic consensus left. This isn’t just an issue in the U.S., Europe is pretty much the same, just a bit slower. For example, in Germany and France, some right-wing parties are also starting to rise, and the anti-European Union voices are getting louder.
This is not just Trump fighting alone; it is the entire right-wing and conservative forces that are rising. The original political order, such as the rule of law and democracy that the United States has always championed, is being suppressed. Some say this is a “mutation” of Western politics; previously, there was talk of rules and cooperation, but now it all depends on who has the loudest voice and who has the strongest fists. Therefore, this second change is also global and has far-reaching effects.
- The reshuffling of geopolitical power: The big fist has the final say.
The third change is the geopolitical reshuffle. After World War II, many leaders of various countries had experienced wars and knew how miserable wars were, so there was Franco-German reconciliation and the European Union. But now, those people who have a view of the overall situation of history are gone, and some of them are young people and businessmen who take international politics as a child’s play and don’t take the rules seriously. What is the United Nations? Step aside. Trump’s logic is very simple, and Dalio of Bridgewater also said, that is, “strength is the rule”, in our popular words, “fists have the final say”.
Look at what he has done to the EU and Ukraine. The US used to support Ukraine in the war, but now? They directly want to cut Ukraine’s mineral rights in half, even Putin hasn’t been this ruthless. Greenland wants to be taken, and Canada even wants to become the 51st state of the US. Previously, the US at least respected international rules to some extent, but now they don’t care about the UN or the WTO at all. This is not just a small skirmish; it’s a complete reversal of geopolitics. Such changes have a huge impact on the world. For example, the situation in Ukraine has left Europe dumbfounded; the thoughts from Canada have further stirred up the North American landscape into chaos. The international order used to have some rules, but now it all depends on power. This is not something that can be settled in the short term because the rules are gone, and rebuilding will take time.
The Next Ten Years: Globalization Stalled, Nationalism Rising
These three major changes—the collapse of the monetary order, domestic political turmoil, and the reshuffling of geopolitical dynamics—are not coincidental; they are part of the global tide. Trump may serve four years and possibly come back for another four; further adjustments will take time. In the next decade, the hindrance of globalization and the rise of nationalism are unstoppable. Voices like “America First” and “France First” will become increasingly louder.
Why do I say this? Because this trend is not measured in days, months, or years, but in decades. According to the political cycle in the United States, the waves stirred up by Trump in these four years will continue to ferment. The reconstruction of the monetary order, the restoration of political compromise, and the reshaping of geopolitical rules—none of these are small projects. So in the next decade, we need to be prepared to face a somewhat different world.
Some people may ask, what impact does this have on us ordinary people? Actually, quite a lot. For example, globalization is blocked, imports may be expensive, and exports are difficult; The dollar is unstable, the exchange rate may be fluctuating, and we have to calculate what we buy with the money in our hands; The international situation is chaotic, and traveling and working abroad may not be as convenient as before. Of course, it’s not all bad, and the rise of nationalism may force us to be stronger and more independent.
Conclusion: The world has changed, what should we do?
Overall, Trump’s tariff war appears to be a trade dispute on the surface, but behind it lies a major shift in the world order. The collapse of the monetary system, the tearing apart of the political order, and the reshuffling of geopolitical dynamics have brought an end to the golden age of globalization. Whether you like it or not, the world has changed.
So what should we do? What ordinary people can do is to pay more attention, to understand more, and not to be blinded by the surface hustle and bustle. The next ten years may be a tumultuous decade, but also a decade of opportunities. We need to learn to stand firm in the winds stirred up by Trump. What do you think? How will this matter develop in the end? Feel free to leave a message and share your thoughts!
