Cambridge – six months after the beginning of his second term, it is fair to say that US President Donald Trump is broken with regard to economic policy – at least according to the standards he has established himself. In fact, he imposed his desire to a degree that no other post-World War President, with the possible exception of Ronald Reagan, was able to achieve.
To begin with, Trump has obtained his approved, although a very small majority in the House of Representatives and reliable projections point out that his taxpayer and spending package will add to the federal deficit in the next decade (unless a miraculous economic boom driven by AI). And the southern US border is now rigidly controlled than in past decades.
Regarding particular tariffs, Trump got what he wanted. And they really capitulated – agreeing to eliminate their own commercial barriers and accepting a 15% US tariff about their exports. Considering these humiliating terms, it is absurd to describe the president of the European Commission, to have the agreement as a success simply because Trump has retreated from his initial threat of 30% tariff.
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Both the European Union and Japan have also pledged to invest hundreds of billions of dollars in the US economy, with Trump exerting a significant influence on where this money would be directed. His self -enhanced persona clearly shook world leaders, many of whom did not recognize that his threats were unsustainable in the long run. In retrospective, it would have been better for them to accuse Trump’s bluff. Instead, on Thursday, an encouraged Trump announced new rates for almost every country in the world.
While European policy formulators were occupied by mitigating the impact of US tariff threats, Trump approved legislation designed to bring cryptocurrencies into the conventional financial system with minimal supervision. Surprisingly, despite the Congress, he showed little interest in investigating the president’s flagrant conflict of interest. In fact, Trump faced more public scrutiny by retaining Jeffrey Epstein’s files than for his cryptocurrency transactions.
No doubt it contains some ideas that are worth it. A disposition, for example, requires stablecoins – cryptocurrencies linked to a traditional currency or commodity, in general the US dollar – are supported by safe and liquid assets. But overall, instead of establishing clear guidelines to tame the wild west of cryptocurrencies, Genius law is little more than a regulatory skeleton.
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As several critics, Trump’s Stablecoin structure has impressive similarities to the free banking of the 1800s, when the United States did not have a central bank. At that time, private banks issued their own dollar -backed coins, often with disastrous consequences such as fraud, instability and frequent bank races. With the expectation that thousands of stablecoins the market, it is likely that similar problems arise. That said, some criticisms may be exaggerated, as today’s main broadcasters are generally more transparent and better capitalized than its 19th century equivalents.
A more urgent and underestimated problem is that the new legislation will make it much easier to use dollar stablecoins for fiscal dropout. Although the highly denomination paper-moeda has similar challenges, the threat scale represented by stablecoins is much larger. And yet, despite these risks, Trump once again got exactly the legislation he wanted.
Luckily, the US economy remained resilient amid uncertainty and chaos triggered by Trump’s tariff war. Although growth seems to be slowing down, and the July job report has been weak -a harsh reality that Trump’s dismissal of the data production will not change -the second -quarter data that the country is not yet in recession.
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Similarly, the highest rates have not yet caused an increase in domestic inflation, and the US is on the right track to raise tariff revenues by 2025. So far, importers have been reluctant to pass these costs to consumers, but this can change if the current tariff war is over. Some analysts have come to the apparent success of Trump’s heterodox policies proves that conventional economic models are wrong. I doubt it, although I can’t dig.
This short -term optimism, however, ignores the long -term consequences. Although some of the former president’s policies have been harmful, several economists that Trump’s actions may be devastating to US institutions and the global economic order. Most importantly, the rule of law would be severely weakened if the expanded presidential powers that Trump claimed could become permanent. A big test is coming if the Supreme Court decides that he has no authority to impose rates without the endorsement of Congress.
If they are maintained, Trump’s comprehensive tariffs may have long -term effects on US growth. It is unlikely that the rest of the world indefinitely tolerates Trump’s protectionist policies. If he begins to look weak for any reason, it is expected that foreign governments will retaliate with their own comprehensive tariffs. Big Beautiful Bill may aggravate damage, triggering a cycle of higher interest rates, increasing inflation and financial repression.
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Still, we should value Trump and recognize that its second presidency is having a much stronger beginning than almost all – besides Trump himself and his most fervent acolytes – could imagine six months ago. We should not be surprised at what comes next – and this may be the scariest part.
Translation by Fabrício Calado Moreira
Copyright :, 2025.
