A million-dollar question: Is a billionaire with negative equity richer than a middle-class individual with over ten million net assets? I would say that a bankrupt tycoon is poorer than both, even compared to a grassroots citizen with just $100 in savings and no debt. This "tycoon" on the brink of bankruptcy is the United States.
On April 15, amid the escalating tariff war, White House Spokesperson Leavitt read a statement from U.S. President Donald Trump: “China wants what we have. Every country wants what we have—American consumers, or in other words, they need our money.”
But the real question is: Does America have money? No—it has only debt. According to the U.S. National Debt Clock, the federal debt has ballooned to $36.8 trillion, nearing $37 trillion. In 2008, U.S. debt stood at $10 trillion. Over 17 years, it surged by nearly $27 trillion—a terrifying trajectory.
Trump recently backtracked, claiming he would soon slash tariffs on China. The U.S.-China tariff standoff resembles the game of chicken: two cars speeding toward each other, with the first to swerve labeled the coward. Trump, now the one blinking, fears something deeper. Critics speculate his fears include soaring prices that angers U.S. consumers; China’s halt on purchase of U.S. liquefied natural gas in April, leaving surplus gas no place to store; and farmers finding him responsible when no one buys their soybeans. Others cite the stock market plunge also unsettles him.
Yet Trump’s true fear lies in an impending bond market crash. If U.S. Treasury prices collapse, stocks and the dollar will follow, triggering a meltdown rivalling the 2008 financial crisis. Recent single-day bond price crashes—akin to a canary dying in a coal mine—signal looming disaster.
The debt crisis has a deadline. This year, $8.5 trillion in U.S. Treasuries will mature, with $5.8 trillion due in June alone, equivalent to 22% of 2024 U.S. GDP. Most June maturities are 5-year bonds issued at 1.8% interest during COVID-19 as relief efforts. The interest rate has much soared since then.
The bigger problem is weak market demand. Poor Treasury auction performances compound the problem. Usually the Federal Reserve will buy up when the market is weak. But, instead of buying, the Feb plans to shrink its balance sheet by $1.2 trillion this year. Even if all $8.5 trillion in new debt is sold, higher rates in the range of 4.5% will drastically increase fiscal burdens.
The immediate threat is June’s debt rollover. With the tariff war ongoing and Trump threatening to fire Fed Chair Jerome Powell, the Treasury market resembles a powder keg. If Trump fails to resolve the tariff dispute by May, June’s debt tsunami could detonate the market.
In this fragile environment, a 15-minute bond sell-off could trigger mass liquidations. Hedge funds leveraged in Treasury arbitrage (holding ~$1 trillion in positions) would face cascading losses. A single actor could ignite this bomb, or Japan’s central bank might sell U.S. Treasuries to support its own bonds, sparking chaos indirectly.
Trump’s tariff war lacks preparation, strategy, and economic logic. A debt-ridden nation antagonizing its creditors is absurd. We can sit back, grab some popcorn and watch Trump struggle to defuse his self-made debt crisis.
Wing-hung Lo
Bastille Commentary
** The blog article is the sole responsibility of the author and does not represent the position of our company. **
The US invasion of Venezuela and the kidnapping of President Maduro for trial in America read like bad pulp fiction—except it actually happened.
Washington slapped Maduro with four charges: narco-terrorism conspiracy, cocaine importation conspiracy, possession of machineguns and destructive devices, and conspiracy to possess those weapons targeting the United States. At his court appearance, Maduro stated plainly: "I was kidnapped, I am innocent". He denied every allegation and reminded the court he remains Venezuela's president—now branded a war criminal by American prosecutors.
When Self-Protection Becomes a Crime
Two of the four charges, possession of machine guns and destructive devices, belong in a satire, not a courtroom. What crime did Maduro commit by possessing weapons in his own country's capital to protect himself? If these charges hold water, US law and justice have become truly farcical.
The narco-terrorism and cocaine importation charges are, naturally, fabricated accusations. The US has produced zero concrete evidence proving Maduro organized any drug trafficking operation.
This US operation—abducting another country's president for trial in America—allegedly violates international law in three distinct ways.
Violation One: Banned Use of Force
According to Article 2(4) of the United Nations Charter, using force or threatening force in international relations is prohibited. This US military operation received no UN Security Council authorization and doesn't constitute "self-defense" under Article 51 of the UN Charter.
Washington claims the operation was self-defense against drug-related crimes, but international law experts broadly agree that combating drug trafficking fails to meet the strict conditions for self-defense or humanitarian intervention under international law—it cannot justify using force against another country.
Violation Two: Sovereignty and Non-Interference
According to Article 2(1) of the United Nations Charter, the US deployment of troops to invade Venezuela violated Venezuela's sovereignty, territorial integrity, and political independence.
Washington used domestic law as justification to conduct cross-border law enforcement through military means, attempting to engineer regime change in Venezuela—a textbook case of interference in another country's internal affairs.
Violation Three: Head of State Immunity
According to the Vienna Convention on Diplomatic Relations and customary international law, a head of state enjoys immunity during their term of office, even when in other countries.
The US crossed borders to arrest Maduro and drag him to America for trial—an act of kidnapping that completely disregards head of state immunity and brazenly destroys international conventions and legal principles.
No UN Mandate, No Legitimacy
To summarize: this US operation lacked UN Security Council authorization and doesn't comply with the collective security mechanism for lawful use of force under international law. As UN Secretary-General António Guterres stated, such US behavior sets a dangerous precedent.
The US openly trampled international law, yet its Western allies stayed silent as winter cicadas—Britain, France, and Germany all responded with vague statements or outright support. Take Britain: Prime Minister Keir Starmer dodged questions with the excuse that "it is not straightforward. It is complicated," and danced around every question.
Even senior Labour MPs found his evasiveness unsatisfactory. Dame Emily Thornberry, Chair of the House of Commons Foreign Affairs Committee, warned that the US action has no basis in international law whatsoever, and Britain needs to clearly state the US violated international law. She argued that if the West cannot mount a coherent and forceful response, international law norms will collapse.
However, she also suffers from the common affliction of Western politicians: bringing up China unprompted. She claimed that if the West doesn't condemn US military intervention in Venezuela, it might set an extremely bad precedent for countries like China and Russia. She speculated that countries like China and Russia might think, “that they should all have their spheres of influence and that other countries should not get involved and they should be able to essentially do what they think is the right thing to do, what they want to do in the interests of their country, in the countries in the surrounding area…
She went further, stating that “President Putin will presumably say, well, Ukraine is in my sphere of influence - what are you complaining about? And Xi may well say that about Taiwan. It sets a terrible precedent and [is] really worrying."
While I largely agree with British MP Thornberry's criticism of the US trampling international law, when she mentions Taiwan, she reveals a fundamental lack of understanding about international law. The People's Republic of China restored its seat at the United Nations in October 1971 and is China's only legitimate government and a permanent member of the Security Council. Taiwan was expelled from the UN in 1971, and the international community—including the United States—has long recognized Taiwan as part of China. Therefore, Article 2(4) of the UN Charter prohibiting use of force in international relations, Article 2(1) prohibiting violation of other countries' sovereignty, and the Vienna Convention's provisions on head of state immunity all target states as subjects and are completely inapplicable to China's handling of the Taiwan issue, because Taiwan is not a country but merely a province of China.
Though Thornberry displays ignorance about international law, her remarks still contain a kernel of logic: since the US did this to Venezuela and its Western allies stayed silent as winter cicadas, they've forfeited any right to comment on how China treats Taiwan.
Lo Wing-hung
