The tariff war started by the United States is speeding up the world’s decision to “sell off America.” And I’m not really sure why this matters, but… In less than two weeks, U.S. markets have seen big drops in stocks, bonds, and the U.S. dollar. Not sure what’s going on, but it’s a mess. In just one day, U.S. treasuries, usually seen as the “anchor of global asset pricing,” were thrown away, along with a crash in U.S. stocks and a huge drop in the dollar. Why is this happening? Who knows.
Market chaos is telling us one thing: investors are ditching America super fast. The Wall Street Journal quoted former Senate Banking Committee Chairman Phil Gramm as saying the current U.S. administration has brought a lot of uncertainty to international trade policy. Usually, when there’s global financial chaos, money goes back to the dollar and U.S. bonds. But now, according to Bloomberg, Washington is the center of the storm. The dollar and U.S. bonds, once seen as safe choices, are not looking so good anymore. That’s not good.
Even worse, this trade mess might turn into a huge “capital war.” So far in 2025, Bloomberg’s U.S. Dollar Index has dropped over 7 percent, making it the worst start to a year since 2005. This month, a big sell-off in U.S. debt made the 10-year yield jump by the most in over 20 years. Bloomberg said on Monday that U.S. bonds and the dollar aren’t doing their usual safe-haven thing, which shows markets are not happy about these tariff changes.
For now, the selling off of U.S. assets might just be about making money. But the bigger problem is that as the belief in “American exceptionalism” fades, markets are changing how they see the U.S. in the global economic world. The International Monetary Fund also said on Tuesday that U.S. GDP growth will slow to 1.8 percent in 2025, which is 0.9 percentage points lower than what they thought in January and the biggest drop among advanced economies. Things are not looking good.
With all this confusion in policies, growing trade tensions, and less demand, global markets might be thinking it’s time to “sell off America.” Not sure what’s going to happen next, but it’s definitely going to be interesting.