Trump’s tariffs and the fragile future of US power

The 1956 Suez Crisis stands as a historic example of how great powers can miscalculate and damage their global standing. Britain’s failed invasion of Egypt, carried out with France and Israel, was made worse by the mistaken belief that the United States would offer support. Instead, the U.S. used financial leverage to force a British retreat, leading to lasting diplomatic embarrassment and a significant loss of influence for the UK.

Today, comparisons are being made between that crisis and former President Donald Trump’s tariff policies, which many analysts view as a self-inflicted wound to American power. As in Suez, critics argue that Trump’s approach reveals strategic misjudgment, particularly in attempting to counter China through tariffs and economic nationalism.

Trump’s return to the White House has reignited debates over U.S. global decline, especially as his administration challenges long-standing principles of trade and macroeconomics. The belief that reshaping domestic production can restore American power contrasts with the economic reality that such policies may isolate the U.S. and weaken global ties. Tariffs, according to critics, are likely to harm not just the U.S. economy but also its allies and trading partners in developing countries.

Some warn that these protectionist measures could accelerate the realignment of global economic power, pushing countries in Asia and even Europe closer to China. The idea that other nations would willingly limit Chinese imports while expanding markets for American goods is seen as unrealistic and strategically flawed.

The article argues that Trump's tariffs could, like the Suez Crisis, mark either a symptom of decline or a pivotal turning point. In Britain’s case, the crisis exposed deeper structural weaknesses, especially in its currency. The U.S. now faces a similar risk with the dollar. While historically dominant, the dollar's stability is increasingly questioned. The shock from tariffs has raised doubts about U.S. fiscal and monetary reliability, as seen in falling stock markets, declining bond prices, and reduced investor confidence.

Though the dollar has withstood previous challenges—such as the COVID-19 crisis—it remains vulnerable to shifts in market sentiment. If global confidence erodes, a move toward a multi-currency reserve system may accelerate, with the euro and other currencies gaining prominence. Such a transition would not be swift but could represent a slow unraveling of American financial dominance.

More alarmingly, experts caution against a sudden and severe dollar crisis. Because of the dollar’s foundational role in global finance, a collapse in trust could trigger widespread turmoil in financial markets and economies worldwide—possibly surpassing the geopolitical damage of Suez.