The Guardian view on Trump’s economic threats: bullies can overplay their hand | Editorial

The latest week has seen three significant moves from President Trump that highlight the limitations of his economic bullying tactics. First, the administration imposed 50% tariffs on an additional $20 billion worth of Canadian goods, followed by the threat of doing the same to the American industrial sector's core: cars, trucks, parts, and steel.

Secretary of the Treasury, Scott Bessent, then threatened to exclude Iran’s trading partners from the US financial network, hoping that coercion could achieve what months of warfare had not.

Adding to the Trump administration's economic gambit, the Treasury Secretary's threats coincide with mounting costs related to war, tariffs, and pro-billionaire tax cuts, which have propelled US bond yields upwards. The Treasury has since intervened to stabilize long-term rates.

These actions can be viewed as an experiment to determine whether the US can repeatedly wield its economic power without diminishing others' reliance on it. The administration's "D-day" sanctions hold significant potential as they expose the backbone of American financial power. Although markets have thus far remained nonchalant about the immediate threat, such an escalation could potentially spark a trade war with China.

China possesses pressure points, such as farmers in Republican states, that make aggressive measures costly. In the long term, there is a price to be paid for such behavior. Nations maintain a currency relationship due to trust in their political alliance; Trump is testing what transpires when that trust is severed.