Presumably at some point, the countries who have been buying US debt via their trade surpluses will start to offload that debt (or at least not buy new issues). Which implies higher treasury yields => higher USD => higher US imports somewhat offsetting tariffs & lower US exports => policy failure.
As every textbook teaches us, the current account deficit is equal to the financial account surplus. The US has a current account deficit in part because its assets (treasuries, private debt and equity) are attractive to foreigners – largely because of their safety and liquidity.
Trump’s tariffs, attacks on allies and NATO, and policies shaking the core of US institutions will make US assets less safe, more uncertain and less attractive.
The only explanation for the tariffs is that Trump wants to cause some attention seeking chaos as a precursor to a global fight to refinance US debt - essentially swapping short term for long term debt with little or no interest (if you want protection). Otherwise the US will default.
