With all the tariffs imposed on other countries like Mexico and Canada, many think the United States (US) is in a comfortable zone – but the reality is much different.
The latest report revealed that the US owes $8.5 trillion to foreign countries, and now Donald Trump has hinted that some of that debt may not be repaid.
Speaking on Air Force One on February 9, Trump questioned the legitimacy of the US Treasury's liabilities, calling it an "interesting problem" and hinting that Washington may not repay some of its debt.
While the likelihood of the US defaulting on its debt is low, Trump's statement alone was enough to shake global markets.
Japan ($1T), China ($759B), and the UK ($723B) are among the largest creditors, and any decision to withhold payments could have a major impact on the world's financial system.
Bond markets could plummet, foreign governments could respond economically, and investors could start selling US bonds in droves, weakening the dollar.
Is this a sign that Trump wants to ‘scam’ the world, or just a negotiating tactic?
Either way, the world is watching and US creditors may already be sweating.
