The Real Reason For Trump's Tariff Trade War!🤯

Are USD Stablecoins the catalyst for the Trade War?

Apr 08, 2025

Hey Thinkers 💡

Why I Think Trump and the U.S. Are Using Tariffs to Address the Trade Imbalance

For decades, the U.S. made strategic deals with other countries—like China—that included purchasing U.S. Treasuries. In exchange, those countries received favorable trade terms, shaping the trade landscape we see today.

But something has changed.

Does the U.S. still need these countries to keep buying Treasuries? Not as much anymore. A new, decentralized player has entered the arena: stablecoin issuers. These issuers are rapidly becoming major holders of U.S. Treasuries, even outpacing some foreign governments and traditional financial institutions.

With US stablecoin legislation on the verge of passing, the issuance and adoption of USD-backed stablecoins are set to grow significantly. In February 2025, Bank of America CEO Brian Moynihan said the Bank would launch a stablecoin if stablecoin regulations are passed by United States lawmakers.

This shift reduces the U.S.'s reliance on foreign buyers of Treasuries. As a result, the U.S. can now afford to revisit and renegotiate trade relationships more aggressively—hence the renewed focus on tariffs.

But are these tariffs really about trade? Possibly not. They may simply be a negotiating tactic—a smokescreen. The general public doesn’t fully understand the mechanics of this system. Contrary to the narrative that the U.S. was "taken advantage of," the truth is the U.S. benefited greatly from countries purchasing its Treasuries.

This marks a major shift in how global economics and diplomacy have worked for decades. We’re witnessing the rise of a new monetary era—one where decentralized financial infrastructure plays a central role in sovereign strategy.

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