Trump: The Organization of Chaos

Without explicitly stating it, Donald Trump draws a correlation between the undeniable reserve currency status of the dollar and its impact on the industrial competitiveness of the United States. In truth, the facts support his argument, as industrial jobs now account for only 10% of employment in the U.S., compared to 40% in the 1980s. The “exorbitant privilege” conferred by the dollar is often invoked—and lamented—by its non-American users. Moreover, the financial (and thus legal) extraterritoriality that comes with it allows the U.S. to impose its laws, regulations, and multiple sanctions almost universally through simple administrative decisions that can take effect overnight.

However, Trump’s team believes that these considerable advantages derived from the dollar’s status come at the expense of the country’s trade balance, harming the middle and lower classes. Their diagnosis is as follows: the trade deficits accumulated since the 1980s have created a monster. The hyperbolic growth of the American financial sector has been built on the ruins of its industrial base. In short: Wall Street and massive financialization have prospered at the expense of “Main Street.” This over-financialized system, which places an excessive imbalance on productive forces—and therefore on ordinary citizens—is no longer sustainable for the current administration, which believes that the dollar is the thread to pull in order to correct the course.

Although universally used, the dollar’s value and success are no longer aligned with an economy whose global significance is declining. The U.S. share of global GDP has dropped to 26%, down from 40% in the 1960s. The issue, then, is not the dollar’s appeal—it remains by far the most sought-after currency in the world—but rather how certain targeted nations recycle their dollars. This leads to accusations of unfair competition in bilateral trade relations, a point Trump highlights.

Nations that enjoy trade surpluses with the U.S. while preventing their own currencies from appreciating not only hold onto the dollars earned from trade but also exacerbate the situation by purchasing the most liquid asset in the world—U.S. debt. This hoarding of dollars pushes its value upward through simple supply-and-demand mechanics, harming American exporters. This creates a scenario where these foreign countries no longer need to produce domestically, as it becomes easier and cheaper to import U.S.-made goods using their own dollar reserves. For Trump, industrial decline and the deterioration of the U.S. balance of payments are direct consequences of the unfair behavior of trade partners who, by keeping their own currencies weak, drive up the dollar’s value, worsen American deficits, and ultimately recycle their trade surpluses into U.S. Treasury bonds and corporate debt.

These massive U.S. deficits—both trade and balance of payments, the so-called “twin deficits”—pose a solvency risk for the country and, in the long run, threaten the dollar’s own status. The strength of the dollar even undermines the American defense sector, as it becomes cheaper to buy military equipment abroad rather than produce it domestically. This is where Trump and his advisors connect economic policy with European security, NATO, and arms supplies to allied nations. They argue that the U.S. can no longer afford such expenditures when its industrial base is eroding, and its deficits are deepening. Claiming that the system is now rigged against them, they realize that their once “exorbitant privilege” has turned into an “exorbitant burden.”

This is where tariffs come into play, aimed at easing the American burden. However, additional measures will follow, including a determined effort to weaken the dollar, coupled with a national competitiveness shock through tax cuts and widespread deregulation. European reactions—now pledging to spend more, not just on rearmament—align well with U.S. interests, as they will shift a substantial portion of the financial load away from the U.S. If the EU finally takes the steps that American authorities have long demanded, the threat of tariffs will have served its purpose. The unilateral and aggressive American approach may be shocking, but it is producing tangible and rapid results.

This, ultimately, is the core of Trump’s philosophy: he does not fear the volatility that these reforms and decisions will inevitably generate. Those nostalgic for the era when the U.S. took a gradual, step-by-step approach should brace for aggressive tariff decisions targeting major economies, a hardline immigration policy, mass layoffs, ruthless audits of public institutions, and financial turbulence. For the first time in decades, an American administration openly states that it is not concerned with, nor influenced by, financial markets. Even though the stock market was Trump’s personal compass during his first term, both he and his advisors have now reversed course, repeatedly asserting that today’s decisions and measures will bring temporary pain for future gains: “Short-term pain for long-term gain.”

This rhetoric must be taken seriously, as the U.S. administration is explicitly signaling its intent to dismantle existing orders, adopt a deliberately destabilizing approach, and wage an open political and economic war on the system—all in pursuit of establishing a radically different order.