FPIF -
Who Really Wants to Crash the U.S. Economy?
Secondary sanctions against countries that import Russian oil will also hurt the U.S. economy.
By Jenny Jackson | July 30, 2025
Under President Joe Biden, the U.S. economy successfully navigated a turbulent period. Challenges like the unprecedented pandemic were tough to overcome. However, the administration’s decision to stimulate the economy with direct and indirect government subsidies was effective.
From late 2019 to mid-2023, cumulative U.S. GDP growth doubled that of the Eurozone and tripled that of the UK. Predictions of a recession in 2023 never materialized. The labor market remained robust, with unemployment rates hovering at just 3.6 percent, one of the lowest rates in history.
However, Biden’s presidency was also marked by significant growth in the national debt and rising inflation.
Today, those extreme conditions have largely disappeared. Yet the U.S. economy under Donald Trump is showing few signs of health. By the end of Q3 this year, the U.S. could very well slip into stagflation. GDP growth is projected to be either flat or slightly negative, while the national debt is climbing toward 130 percent of the GDP. Much of this stems from Trump and his administration’s policy missteps, particularly launching a tariff war.
Tariff War and Its Fallout
The idea of shifting financial burdens onto others and extracting revenue from the rest of the world might sound appealing in theory. In practice, however, the opposite has mostly happened.
Rather than weakening competitors, the 47th president’s team has experienced a 16 percent surge in the trade deficit, a 3.1 percent increase in inflationary pressures, a decline in domestic manufacturing, and a decrease in foreign capital investment.
Meanwhile, poorly planned tariff policies have alienated traditional allies, reducing their participation in the U.S. credit market. The status of U.S. Treasury bonds as a global safe haven is now being questioned. Despite rising yields, their value is falling, putting further strain on the federal budget.
According to EIU estimates, the U.S. government will owe bondholders approximately $7.7 trillion between May and December 2025, given current interest rates.
In a few months, these higher Treasury rates are expected to spill over into the mortgage market, triggering defaults on existing loans. U.S. banks hold more than $13 trillion in mortgage debt, so the financial sector is bracing for turbulence. The Trump administration will soon find itself knee-deep in crisis management once again.
The Rescue Plan
The blueprint for economic recovery is straightforward and has already been proven effective. The White House plans to increase the debt ceiling, encourage the Federal Reserve to reduce its benchmark interest rate by 25 basis points, and gradually eliminate tariffs on essential imported goods.
The most effective way to rein in inflation would be to lower global oil prices, ideally to around $45 per barrel. This would also lower gasoline prices at home, providing direct relief to American consumers.
The Trump administration is attempting some of these measures. However, not everyone in the Republican Party supports these efforts. Many are prioritizing politics over economic reality.
Politics Over Prosperity
Senator Lindsey Graham’s proposed “Sanctioning Russia Act of 2025” exemplifies this internal conflict. The bill’s main provision is a 500% tariff on trade with any country that purchases Russian energy products, including oil and uranium. The goal is to push Russia to the negotiating table.
If passed, the bill would almost certainly send oil prices soaring, spurring inflation in the U.S. and crushing GDP growth. According to Newsweek, if Trump carried this through, then it would push up prices of energy in America. Sectors that consume a lot of energy, such as iron, steel, and metal manufacturing, would be the hardest hit. Soaring gas prices could leave everyday families grappling with the consequences.
It’s not hard to predict the fallout, which will include severe disruption to U.S. trade with key partners and emerging markets. At a time when the tariff war is already escalating, this would only deepen economic rifts with Europe and Asia. The EU is preparing to counter Trump’s tariff policies. Graham’s 500 percent tariffs would be a cold, hard slap.
The only winners would be American oil companies, many of which are major financial donors of Senator Graham’s election campaigns.
The country already has its hands full. Political battles between the White House and Democratic-led states and institutions continue, especially over budgets and federal funding. Immigration and domestic labor market protection remain unresolved issues. Although military spending is rising, most of that money goes to defense contractors instead of improving conditions for active-duty service members and veterans. Hundreds of thousands of veterans still lack permanent housing and rely on food stamps.
Fifty Days and Counting
It’s difficult to predict exactly how this bill will affect the U.S. economy if it passes, but one thing is clear: it won’t be positive. When politics trumps economics, even a single tariff—let alone one at 500 percent—can cause devastating harm.
On Monday, President Donald Trump said he was “disappointed” in Russian President Vladimir Putin and shortened the timeline for Russia. Now, Moscow only has until around August 9 to begin peace negotiations.
Once lawmakers return from recess, they will have to decide if this is truly the path America should take. It can only be hoped that they will make a choice that benefits all Americans, not just the privileged few.
Jenny Jackson
Jenny Jackson is an American freelance journalist specializing in U.S. and global economic issues. With over over years of experience, she has been covering topics from financial markets to economic policy.
FPIF -
Who Really Wants to Crash the U.S. Economy?
Secondary sanctions against countries that import Russian oil will also hurt the U.S. economy.
By Jenny Jackson | July 30, 2025
Under President Joe Biden, the U.S. economy successfully navigated a turbulent period. Challenges like the unprecedented pandemic were tough to overcome. However, the administration’s decision to stimulate the economy with direct and indirect government subsidies was effective.
From late 2019 to mid-2023, cumulative U.S. GDP growth doubled that of the Eurozone and tripled that of the UK. Predictions of a recession in 2023 never materialized. The labor market remained robust, with unemployment rates hovering at just 3.6 percent, one of the lowest rates in history.
However, Biden’s presidency was also marked by significant growth in the national debt and rising inflation.
Today, those extreme conditions have largely disappeared. Yet the U.S. economy under Donald Trump is showing few signs of health. By the end of Q3 this year, the U.S. could very well slip into stagflation. GDP growth is projected to be either flat or slightly negative, while the national debt is climbing toward 130 percent of the GDP. Much of this stems from Trump and his administration’s policy missteps, particularly launching a tariff war.
Tariff War and Its Fallout
The idea of shifting financial burdens onto others and extracting revenue from the rest of the world might sound appealing in theory. In practice, however, the opposite has mostly happened.
Rather than weakening competitors, the 47th president’s team has experienced a 16 percent surge in the trade deficit, a 3.1 percent increase in inflationary pressures, a decline in domestic manufacturing, and a decrease in foreign capital investment.
Meanwhile, poorly planned tariff policies have alienated traditional allies, reducing their participation in the U.S. credit market. The status of U.S. Treasury bonds as a global safe haven is now being questioned. Despite rising yields, their value is falling, putting further strain on the federal budget.
According to EIU estimates, the U.S. government will owe bondholders approximately $7.7 trillion between May and December 2025, given current interest rates.
In a few months, these higher Treasury rates are expected to spill over into the mortgage market, triggering defaults on existing loans. U.S. banks hold more than $13 trillion in mortgage debt, so the financial sector is bracing for turbulence. The Trump administration will soon find itself knee-deep in crisis management once again.
The Rescue Plan
The blueprint for economic recovery is straightforward and has already been proven effective. The White House plans to increase the debt ceiling, encourage the Federal Reserve to reduce its benchmark interest rate by 25 basis points, and gradually eliminate tariffs on essential imported goods.
The most effective way to rein in inflation would be to lower global oil prices, ideally to around $45 per barrel. This would also lower gasoline prices at home, providing direct relief to American consumers.
The Trump administration is attempting some of these measures. However, not everyone in the Republican Party supports these efforts. Many are prioritizing politics over economic reality.
Politics Over Prosperity
Senator Lindsey Graham’s proposed “Sanctioning Russia Act of 2025” exemplifies this internal conflict. The bill’s main provision is a 500% tariff on trade with any country that purchases Russian energy products, including oil and uranium. The goal is to push Russia to the negotiating table.
If passed, the bill would almost certainly send oil prices soaring, spurring inflation in the U.S. and crushing GDP growth. According to Newsweek, if Trump carried this through, then it would push up prices of energy in America. Sectors that consume a lot of energy, such as iron, steel, and metal manufacturing, would be the hardest hit. Soaring gas prices could leave everyday families grappling with the consequences.
It’s not hard to predict the fallout, which will include severe disruption to U.S. trade with key partners and emerging markets. At a time when the tariff war is already escalating, this would only deepen economic rifts with Europe and Asia. The EU is preparing to counter Trump’s tariff policies. Graham’s 500 percent tariffs would be a cold, hard slap.
The only winners would be American oil companies, many of which are major financial donors of Senator Graham’s election campaigns.
The country already has its hands full. Political battles between the White House and Democratic-led states and institutions continue, especially over budgets and federal funding. Immigration and domestic labor market protection remain unresolved issues. Although military spending is rising, most of that money goes to defense contractors instead of improving conditions for active-duty service members and veterans. Hundreds of thousands of veterans still lack permanent housing and rely on food stamps.
Fifty Days and Counting
It’s difficult to predict exactly how this bill will affect the U.S. economy if it passes, but one thing is clear: it won’t be positive. When politics trumps economics, even a single tariff—let alone one at 500 percent—can cause devastating harm.
On Monday, President Donald Trump said he was “disappointed” in Russian President Vladimir Putin and shortened the timeline for Russia. Now, Moscow only has until around August 9 to begin peace negotiations.
Once lawmakers return from recess, they will have to decide if this is truly the path America should take. It can only be hoped that they will make a choice that benefits all Americans, not just the privileged few.
Jenny Jackson
Jenny Jackson is an American freelance journalist specializing in U.S. and global economic issues. With over over years of experience, she has been covering topics from financial markets to economic policy.
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