The US national debt has now crossed $34 trillion, and that’s not just a big number it’s a red flag. When your debt-to-GDP ratio hits 124%, you’re way past the comfort zone. It means the country owes more than its entire economy produces in a year. And with interest rates still high, America isn’t just carrying debt it’s paying a fortune to maintain it.
That’s where Trump enters the picture, and love him or hate him, he has a plan. Or at least, a very intentional pattern: pressure the Fed to reduce interest rates, revive tariffs against trading partners, and double down on defending the US dollar as the king of global currency. It’s aggressive, mercurial and, in Trump’s view, necessary.
Why Debt Matters More Than Ever
A 124% debt-to-GDP is not only symbolic. It has actual consequences. The government is spending more than $1 trillion annually now just on interest payments funds that could otherwise be devoted to infrastructure, healthcare, or education. And that figure is only going to increase if rates remain high.
That is, the US is essentially paying off a credit card it can’t help but keep using, with the interest just accumulating.
Trump’s Pressure Play: Tariffs and the Fed
In office or out of office, Trump is already putting his stamp on the economic story. His play is old hat: increase tariffs, bluster, and rattle cages until the Fed gets nervous.
He’s threatened to slap a 10% tariff on every import and even stiffer penalties on some countries, such as China. That would make prices soar and stock markets crash at least for the short term. But it’s about more than foreign policy. There’s a deeper game.
Trump understands that economic uncertainty created by tariffs tends to push the Federal Reserve into action usually by lowering interest rates to steady growth. And lower rates benefit in two big ways: they make borrowing cheaper for consumers and businesses, and they significantly lower how much the government pays on its huge debt.
Therefore, although the Fed should be independent, Trump’s approach puts pressure on it. It puts them in the position of responding to the turmoil he causes.
Saving the Dollar in a Changing World
And then there’s the US dollar the linchpin of world commerce. But its status as the dominant currency is no longer assured.
Others, such as China, Russia, and BRICS nations, are exerting the pressure. They’re making local currency trades, establishing non-dollar payment mechanisms, and actively undermining American financial hegemony.
Trump views the survival of the dollar as essential to maintaining US economic influence. His premise is that if America appears healthy both economically and politically other nations won’t have any other choice but to continue using the greenback. To accomplish that, though, he needs a soaring economy, low interest rates, and good trade balances. Enter: tariffs and rate cuts.
The High-Risk Trade-Off
No doubt it’s a risk. Tariffs may stimulate domestic production, but at the expense of consumers. And if they trigger inflation, the Fed could wind up raising rates rather than cutting them triggering Trump’s strategy to blow back. Meanwhile, allies may retaliate, international trade may suffer, and the reputation of the dollar may decline even more.
But to Trump, this is not so much about spreadsheets it’s about image. If he can get Americans to believe he’s the sole warrior for a stable dollar, reduced debt load, and equal trade, he wins the political battle even if the economic results are uglier.
