President Trump said that tariffs will pay off the national debt of the United States

President Donald Trump declared that tariffs not only address the United States' $36 trillion national debt but also "MAKE AMERICA RICH AGAIN". Comparing this strategy to the economic boom during the Second Industrial Revolution, Trump declared that tariffs, not income taxes, have created the greatest wealth for the country. "Tariffs, and tariffs alone, have built up this tremendous wealth in our country," the president said. "And that's what we've done with the tariffs, we've never been this rich before." The plan to increase import taxes up to 20% (even higher for Chinese goods) is the solution to the increasing debt crisis with no signs of slowing down. The US debt has reached 36 trillion dollars As of January 2025, the national debt of the United States exceeded $36 trillion, an increase of $4.7 trillion in just 18 months. This represents a sharp rise from the $31.5 trillion when the debt ceiling was suspended in June 2023. Publicly held debt has surged, currently standing at $28.7 trillion according to the latest data released in November. This massive debt has far-reaching consequences for the U.S. economy. Interest rates are rising, borrowing costs are increasing, and the government's ability to manage crises is diminishing. Treasury Secretary Janet Yellen has warned that the government could reach its borrowing limit as early as January 14. If the National Assembly does not increase or suspend the limit, the possibility of debt default may occur, seriously affecting the country's credit rating and causing a collapse of the global financial market, from stocks to cryptocurrencies. To extend the time, the Ministry of Finance has started implementing "special measures". Including shuffling money and temporarily reducing some government internal debts. But these are only short-term remedies. By mid-2025, they will run out. In addition to the drama, the federal government is expected to face a $2 trillion deficit in 2024 due to weaker-than-expected tax revenues. Both individual and corporate tax revenues have decreased, leaving the government with a significant funding gap. Critics blame Trump's plans to cut tariffs and customs duties for exacerbating this deficit further. Trump's tariff strategy and its risks Trump's plan focuses on tariffs ranging from 10% to 20% for imported goods, even higher for Chinese goods. For him, it's a simple equation: tariffs protect US industries, generate revenue, and narrow the trade deficit. He pointed to the Second Industrial Revolution, from 1870 to 1914, as evidence that tariffs worked. At that time, tariffs made up a significant portion of federal revenue. Marc Andreessen, when reflecting on that era, called it the "perhaps the most fertile era for the development and deployment of technology in human history". Trump sees this historical precedent as the truth. But the economy of 2025 is not the economy of 1870. Critics say that the world has changed, and so has the risk. Tariffs could increase costs for businesses, who would pass those costs on to consumers. That means the prices of everyday goods will be higher. Economists estimate that a 10% import tax could raise inflation by 0.3 to 1.2 percentage points, depending on the widespread scope of application. Inflation, which has already begun to cool down after peaking at 9.1% in 2022, could flare up again. Forecasts suggest that inflation could rise to between 4% and 9% by 2026 if Trump's policies are fully implemented. Trump's tax cuts could also create a more serious problem. Permanently implementing them could add an additional $7.75 trillion to the national debt over the next decade. Higher interest rates, driven by inflation and tariffs, will make government borrowing even more expensive. Economists warn of twin deficits Literally, all of Trump's policies are causing red flags in the economy. Many predict the return of a 'twin deficit', with both budget and trade deficits increasing. This double blow will weaken national savings and increase dependence on foreign capital. The supply chain can also be affected. Customs duties, combined with Trump's immigration restrictions, may create a shortage of labor. Fewer workers mean higher production costs, which will push prices even higher for consumers. Sixteen Nobel Prize-winning economists have signed a letter opposing his plan. They point out that it will not control inflation and may even make it worse. There is also a risk of retaliation. Other countries may impose their own tariffs on US goods, starting a trade war. This will damage US exporters and further destabilize the economy. DYOR! #Write2Earn #Write&Earn $BTC {spot}(BTCUSDT)