


If foreign capital pulls out of the U.S., that will make it more difficult for American companies to raise the money to increase production in the U.S.
Much of the extraordinary performance of US assets in recent years has been fuelled by vast exports of European and Asian capital. Even more consequentially, as trade becomes weaponised, will capital go the same way? After all, if countries are being forced to become more self-sufficient, they will need to be self-sufficient in capital too. The real risk is that Trump triggers a disorderly exit by foreign investors from US assets.
Nixon is not wrong.
If foreign capital pulls out of the U.S., that will make it more difficult (and/or more expensive) for American companies to raise the money they will need to make in order to increase production in the U.S. and, for that matter, help finance America’s debt. The growth in that debt, incidentally, is likely to be accelerated by the recession which Trump’s colossal blunder will now set in motion.
And that debt will be made no more attractive to international investors by the damage that this administration has done to this country’s reputation for reliability, trustworthiness, and stability, damage that will cost Americans a very great deal.