We Have Never Seen An Economic War Quite Like This

Donald Trump is not messing around. After trying to play nice during his first administration, Trump is making it very clear that he fully intends to use the full power of the presidency to shape economic policy during his second administration. In particular, Trump is planning to impose massive tariffs on other nations that attempt to stand in the way of the MAGA agenda. Last week, Trump threatened to impose 25 percent tariffs on all products coming into the United States from Mexico and Canada if those two countries do not work with him to secure our borders…

President-elect Donald Trump on Monday promised massive hikes in tariffs on goods coming from Mexico, Canada and China starting on the first day of his administration, a policy that could sharply increase costs for American businesses and consumers.

The move, Trump said, will be in retaliation for illegal immigration and “crime and drugs” coming across the border.

“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” Trump posted on his Truth Social platform. “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

Needless to say, this really freaked out the leaders of Mexico and Canada.

After a call with Trump, the president of Mexico seemed optimistic that a trade war with the U.S. could be avoided, but Canadian Prime Minister Justin Trudeau just returned home from a personal meeting with Trump empty-handed…

He has since held a call with Mexican President Claudia Sheinbaum, who said Thursday she is confident that a tariff war with the United States can be averted. Canadian Prime Minister Justin Trudeau returned home Saturday after meeting Trump, without assurances the president-elect will back away from threatened tariffs on Canada.

Most people do not realize this, but Canada is actually our number one trade partner.

If the Canadians get hit with 25 percent tariffs, it will crash the Canadian economy.

I just have to say something about Justin Trudeau.

He has been making incredibly bad decisions throughout his entire time in office, and he has really run Canada into the ground.

There are a lot of really bad leaders in the Western world right now, but he may be the absolute worst.

After threatening Mexico and Canada, Trump decided to threaten the BRICS nations with 100 percent tariffs if they choose to move away from the U.S. dollar…

President-elect Donald Trump threatened the BRIC group of emerging-market nations on Saturday, warning that he would impose 100% tariffs if they make any moves to undermine the U.S. dollar.

Trump’s comment, made on his Truth Social platform, is in apparent response to efforts to challenge or replace the U.S. dollar as the primary global reserve currency.

The BRIC alliance, originally comprised of Brazil, Russia, India, and China, now includes five other countries: South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates.

We have never seen an economic threat of this magnitude in modern history.

In a post on Truth Social, Trump explained why he has decided to make this move…

The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER. We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy. They can go find another “sucker!” There is no chance that the BRICS will replace the U.S. Dollar in International Trade, and any Country that tries should wave goodbye to America.

I was stunned when I first saw this.

It is quite a bold move, but will it work?

We shall see.

Without a doubt, Russia and China would both like to avoid more economic turmoil right now.

The Russian financial system is already deeply struggling as a result of a recent move by the Biden administration. Fifty major Russian banks were recently hit with sanctions, and the ruble has been absolutely plummeting…

The ruble has come off its lows from earlier in the week after the central bank halted all foreign currency purchases for the remainder of the year, but it remains battered—and resources for preventing a further collapse are shrinking.

On Friday, the central bank set the official rate at about 108 to the U.S. dollar. While that’s improved from Wednesday’s rate of 114 on the spot market, that’s still means one ruble is worth less than a penny.

The ruble has tumbled 9% against the dollar since Nov. 21, when the U.S. sanctioned some 50 Russian banks, including Gazprombank, which has emerged as a top linchpin for Russia in currency markets. And for the year to date, the ruble has crashed about 20% against the greenback.

Meanwhile, China’s economy is in a state of disarray, and Chinese officials are extremely concerned about what will happen once Trump is inaugurated.

For decades, China has been one of our largest trading partners, and we are highly dependent on cheap Chinese goods at this point.

What would it do to the global economy if our trading relationship with China suddenly broke down? As they prepare for a potential invasion of Taiwan, this is something that the Chinese have already been studying…

China has been supporting Russia’s economy since the start of the Ukraine war by buying its oil while supplying it with everything from microelectronics to washing machines.

Meanwhile, Beijing has been getting its own strategic benefit: a real-world case study in how to circumvent Western sanctions.

An interagency group, set up by China in the months following the full-scale invasion, has studied the impact of sanctions and produced reports regularly for the country’s leadership, according to people familiar with the matter. The goal is to draw lessons about how to mitigate them, particularly in case a conflict over Taiwan prompts the U.S. and its allies to impose similar penalties on China, the people said.

If the U.S. and China start slapping one another with tariffs and sanctions, the entire world will feel the pain.

I have a feeling that this story is not going to end well.

Unfortunately, Europe is also dealing with severe economic stress at the moment. The German economy in particular is not doing well, and VW is poised to conduct mass layoffs for the first time ever…

Tens of thousands of Volkswagen workers will participate Monday in strikes at plants across Germany, labor union IG Metall said, marking the largest walkouts at the carmaker’s domestic operations since 2018.

The walkouts, which are planned to last several hours, follow weeks of collective bargaining negotiations during which VW refused to rule out mass layoffs and potential plant closures in its home market — drastic measures the company says are necessary to prop up its fortunes amid competition from China and weaker European demand.

The global economy is more interconnected than it has ever been before, and everywhere you look there are signs that global economic activity is slowing down.

2025 was already shaping up to be a really bad year, and now a worldwide economic war threatens to greatly accelerate our problems.

Here in the U.S., we desperately need the rest of the world to use our currency, because that allows us to enjoy a standard of living that is far higher than we actually deserve.

We also desperately need the rest of the world to loan us gigantic mountains of money, because otherwise we would not be able to pay our bills.

So it would be a tremendous mistake to think that we have all the leverage and that we don’t need the rest of the world.

Sadly, I think that very soon it will become abundantly clear just how dependent we really are on a global economic system that is rapidly starting to fail right in front of our eyes.

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

About the Author: Michael Snyder’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com. He has also written eight other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.