Those who dare to spoil Trump’s party

It was the national holiday that Donald Trump was waiting for. While military planes flew over the White House, the American president drew his famous Sharpie to sign the most important victory of his second term, the “One Big Beautiful Bill Act”.

On this July 4, President Donald Trump gave the impression of being a winner on the whole line. With threats and intimidation, he silenced all the criticisms and obtained whatever he wanted.

Judicial disputes? The Supreme Court has just limited the national scope of the decisions of the judges invalidating the decrees of the president, who directs the country at the end of his fire pencil.

Popular demonstrations? Donald Trump reacted by deploying the National Guard in the streets, against the opinion of the State, in a violent demonstration of authoritarianism.

Universities? He put them to his boot, scary the researchers who are however an extraordinary engine of innovation and wealth creation.

Foreign countries? He pushed them to raise their military investments by 2 % to 5 % of GDP and to reduce American multinational tax.

The Senate, the Congress? They voted in favor of his “beautiful and great law” which will redistribute the money from the poor to the rich, like a Robin of the woods upside down.

Even the scholarship that we saw as the last bulwark against the Trumpian drifts went back to a historic summit, it which collapsed after the announcement of all -round customs duties last April.

So what, had investors got angry for nothing?

Absolutely not.

If the scholarship seems reassured, the bond market and that of currencies tell a completely different story.

For six months, the US dollar has lost more than 10 % in the face of a basket of foreign currencies, an unprecedented dive since 1973.

The markets are questioning “American exceptionalism”, the idea that its economy has the ability to outperform the rest of the world.

But the most worrying is that the fall in the greenback occurs at the same time as interest rates are rising on the obligations of the American government, a sign that investors perceive a greater risk, with the federal debt that increases.

Dollar down, increasing interest. This dangerous combination, we see it more often in emerging countries in crisis than in advanced countries, all the more so in the United States whose motto is a pillar of the world economy.

The situation reminds us of what the United Kingdom lived in 2022, reports the American research group Brookings Institution Institution^⁠1.

British Prime Minister Liz Truss had caused a debt crisis by announcing tax cuts that went against the central bank efforts to counter inflation. His project, which was based on loans, made interest rates jump and drop the currency.

With the purest English humor, the citizens of His Majesty then started to bet that their new Prime Minister would last less than a lettuce. And lettuce had won!

We are not there in the United States. But it is clear that Donald Trump seriously shakes the confidence of foreign investors, who considered the United States as the value of supreme refuge.

It is not the Big Beautiful Bill Act who will arrange things, quite the contrary.

The law will not bring a boom of wealth, because it only perpetuates the tax cuts to the richest that Trump had set up in his first mandate and which mattered.

But to pay his gifts, Donald Trump makes a lot of bad decisions.

He stuck in the pocket of the poorest. This will leave 12 million Americans without health insurance, a shame for a rich country like the United States. By expanding wealth differences, the president runs the risk of stirring social tensions and weakening democracy.

Donald Trump also saber in helping to develop renewable energies, leaving China this niche of the future where it already enjoys one step ahead.

By the band, it could harm the very energy -consuming artificial intelligence industry. This is without counting that the Americans will suffer from the fact that the president gave up in the fight against climate change.

But all these cups are not sufficient to cover the phenomenal expenses of the “beautiful and great law”. This means that the American debt will inflate alarmingly.

The debt-pib ratio will increase to 106 % within two years, more than in the Second World War.

However, the planet is not at war, even if Trump tries to present the United States as a country in crisis to justify his authoritarian gestures.

We knew that Donald Trump would be untimely and unpredictable during his second term. But the speed at which he destroys the democratic and economic foundations of his country is amazing.

He will have to pay the price, as demonstrated by the fall in the dollar and the increase in interest rates. While everyone folds in front of Trump, the financial markets are the only ones to dare to spoil their party.

1. Consult the Brookings Institution group report (in English)