Why did tariffs delay lead to a big dump in US bonds and the dollar? Krugman warns: Trump's foolish policies could cause the US to lose its global economic leadership.

Nobel laureate economist Paul Krumman issued a harsh criticism of Trump's policies on April 11, warning that Trump's decisions are pushing the U.S. economy to the brink of a "major financial crisis" because Trump's policies are capricious and lack economic logic, and negotiations with other countries will not lead to constructive agreements. The recent collapse of U.S. debt and the dollar confirms this assertion, and Trump's short-sighted policies may deprive the United States of global economic leadership. (Synopsis: Trump tariffs make U.S. debt "risk aversion myth busted" lazy bag: Wall Street recognizes "risky assets", China and Japan are dumping murderers? (Background addition: As soon as the European Union approved a 25% retaliatory tariff on US products, Trump turned to... Who changed his mind? U.S. President Donald Trump launched his new round of tariffs on April 3, announcing a 10% benchmark tariff on many countries and higher reciprocal tariffs on some countries, such as China and Japan, affecting more than 180 countries around the world, and the global financial market was hit hard. However, in recent days, Trump has suspended the effective time of tariffs on many countries, retaining only a high-pressure posture towards China - a move that has sparked heated market discussions, some believe that Trump's position is not as aggressive as before, and he may also want to avoid a full-scale trade war so as not to trigger a global recession. Encouraged by this, the U.S. stock and cryptocurrency markets, which have been falling for many days, also rebounded, and market sentiment improved slightly. U.S. bonds and dollar collapse release alarm However, it is worth noting that both U.S. bonds and the dollar have recently fallen, causing investors to think deeply. According to Bloomberg, the $29 trillion U.S. bond market recorded its worst weekly decline this week since the 2019 repo market crisis, with 10-year yields soaring to their highest level since February and 30-year yields briefly topping 5%. The US dollar posted its biggest weekly decline since 2022. In this regard, Kathy Jones, chief fixed income strategist at Charles Schwab, pointed out that the collapse of both U.S. bonds and the dollar indicates that the market's confidence in U.S. policies is collapsing, and investors have begun to question the status of U.S. bonds as safe-haven assets and try to turn to more stable bond markets, such as Europe. This phenomenon not only reflects investors' fear of uncertainty about Trump's tariff policy, but also suggests that US fiscal health and economic stability are being challenged. Krumman warns: Trump's policy is capricious, and the future of the United States is worrying Against this background, Nobel laureate Paul Krugman issued a harsh criticism of Trump's policies on April 11, warning that Trump's decisions are pushing the US economy to the brink of a "major financial crisis". He dissected the fatal flaws of Trump's policy and explained its far-reaching impact on the US and global economies. Policy capriciousness, undermining market confidence Krumman directly called Trump's tariff policy "stupid, capricious and weak", arguing that his approach of announcing high tariffs first and then suspending them for 90 days lacked consistency and logic. He noted that the 90-day moratorium has not eliminated uncertainty, but has left businesses and investors in greater confusion. "If you're a business owner, will you make a major investment in the coming months? I won't anyway." Krumman said. Krumman argues that Trump's decision-making lacks economic logic or even is a political show, and that this short-sighted behavior will prevent companies from making long-term plans, thereby discouraging investment and economic activity: Trump and his advisers, such as Peter Navarro, see the trade deficit as evidence that foreign countries are taking advantage of us, but this completely misunderstands the fundamentals of economics. The trade deficit is driven by the savings and investment gap at home, and tariffs will not solve this problem at all. This uncertainty is as harmful as the high tariffs themselves, potentially leading to supply chain disruptions and higher consumer prices. Can a good trade deal be reached? In addition, Krumman questioned Trump's ability to strike favorable trade deals with multiple countries. He said that even if Trump suspends tariffs on some countries, his high-pressure posture towards China shows that his trade strategy is still dominated by confrontation rather than cooperation. Krumman stressed that even lighter tariffs (e.g., 10% to the world, 60% to China) would hit the economy hard, not to mention that current policies far exceed that scale. Trump's suspended tariffs are still the biggest trade shock in the history of the United States and even the world. Krumman added that because Trump's tariff policy has damaged the credibility of the United States as a reliable trading partner, allies and adversaries alike have doubts about its intentions, making it difficult to negotiate constructively. He believes that U.S. trading partners, such as the European Union, Canada and Mexico, may adopt a "fake concession" strategy, as Trump did during his first term, ostensibly compromising to appease Trump, but in fact not changing the structure of trade. Where is the United States headed? The risk of financial crisis intensifies Krumman concluded by warning that Trump's policies are leading the United States to unknown dangers. He said bluntly: "We still face the risk of a major financial crisis. He believes that the uncertainty caused by tariffs has weakened the attractiveness of the dollar and US bonds, and the withdrawal of foreign investors may push up US borrowing costs to further exacerbate fiscal pressures. Krumman sharply criticized optimists who dismissed Trump's policies as harmless, saying they "should stay away from sharp objects." He noted that high tariffs would drive up inflation, curb consumption and disrupt global supply chains, triggering recession risks. The collapse of Treasuries and the dollar has confirmed his fears, showing that confidence in the US economic outlook is collapsing. He believes that Trump's short-sighted policies could deprive the United States of global economic leadership: The stock market sometimes fluctuates because of meme investing or retail mania, but bond and currency markets are the game played by the experts. And now, when you see the dollar depreciate and U.S. Treasury yields soar, it means that the market is saying: We no longer trust the U.S. to manage its economy properly — which is a very dangerous signal for a country with a global reserve currency. Related reports Trump: China immediately raised tariffs to 125%, Beijing retaliated with 84% tariffs, sanctioned 18 US companies Trump announced the suspension of reciprocal tariffs for 90 days! Bitcoin broke through 81,000, U.S. stocks soared by more than 11% Comments" How to understand Trump's madness? It's just a vote "Tariffs suspended, why did the U.S. debt and the dollar plummet?" Krumman warned: Trump's stupid policies may make the United States lose its global economic leadership This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".