The eagle’s debt trap: Trump’s “Beautiful Big Act” and the global harvest to come

AS fireworks lit the skies on July 4, 2025, to mark America’s Independence Day, President Donald J. Trump quietly signed the controversial “One Big Beautiful Bill” — a sweeping fiscal package projected to add $3.3 trillion to federal deficits over the next decade. By the end of June, the national debt had already surpassed $36.5 trillion, with projections nearing $60 trillion by 2035—this is not accidental, but central to Washington’s strategic playbook. In Trump’s second term, debt is not a burden. It is a weapon.

AI Brief

Washington uses debt, dollar dominance, and tariffs as tools of global influence, pressuring emerging economies.
The US-China rivalry forces Southeast Asia to choose between alignment or asserting regional autonomy.
Malaysia must reduce dollar reliance, strengthen local systems, and help ASEAN counter economic coercion.

The world’s attention might focus on the July 9 tariff deadline, but that is just stagecraft. The real power lies in the U.S. Treasury—through massive bond issuance, yield manipulation, and inflows of foreign capital, Washington sustains a debt-based global command structure. As long as U.S. Treasuries are seen as “safe,” emerging economies will continue channeling capital into dollar instruments—a perception now deliberately cultivated and weaponized.

In a world where capital flees volatility, U.S. debt is the vortex. Treasury yields fall, the dollar strengthens, and emerging-market currencies weaken. Nations become ensnared in cycles of rate hikes and imported inflation. This is not a flaw—it is fiscal coercion.

Trump’s recent moves—including the late‑June tariff deal with Vietnam—form part of a broader strategy aimed eastward: not just China, but the larger China-led realignment of the Global South. By fracturing ASEAN, incentivizing Vietnam, and offering selective exemptions, Washington seeks to disrupt regional consensus and tilt economic allegiance.

The symbolism is striking. The Dragon, embodied by China, extends its reach through the Belt and Road Initiative, fosters cooperation via the Global Development Initiative, and quietly rolls out digital settlements through the digital yuan (e‑CNY). The Eagle, driven by Trump’s executive fiat, swoops with tariffs in one claw and deficits in the other—circling global partners and pushing for fealty or capitulation.

Yet this is not merely a U.S.–China duel. The Global South stands at a crossroads. For Malaysia under Prime Minister Anwar Ibrahim, this is a time for clarity. National resilience must stretch beyond defense—it must include economic sovereignty: reducing reliance on dollar capital, fast-tracking local-currency settlement, and insulating finances from debt‑induced volatility. Sovereignty today is not just about borders—it’s about liquidity control.

Regionally, bodies like ASEANPOL should be empowered to coordinate against emerging threats—financial subversion, cyber fraud, and illicit networks. Strengthened by shared data, AI systems, and real-time alerts, they could become frontline defenders against economic aggression.

Trump isn’t tinkering with tax policy—he’s staging global domination. The “Big Beautiful Bill” is no longer a domestic measure—it’s the blueprint for a new economic imperialism. If debt is turned into gold, and the dollar reigns unchallenged, then America’s deficits become everyone’s burden by design.

Malaysia and its neighbors cannot remain spectators. Diversifying currencies, insulating capital markets, and building an ASEAN financial firewall aren’t ideological—they’re existential.

The Dragon seeks no conflict—but it won’t bow to coercion. The Eagle may rule the skies—but the ground beneath is shifting—strategically, digitally, collectively.

In an era of financial spectacles and strategic silences, clarity is the first resistance, and strategy—not sentiment—is the only path forward.

CW Sim is Chief Strategic Advisor on Greater China, Strategic Pan Indo-Pacific Asia (SPIPA)

Phar Kim Beng, PhD, is Director of the Institute of Internationalization and ASEAN Studies (IINTAS) and a former Head Teaching Fellow at Harvard University.

** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.