Trump is Positioning for Power in a Rewired World

You have seen the headlines about trade wars, tariffs and the looming digital dollar. The US is no longer playing passive enabler to global imbalances. The rules of global trade are being re-written – with the US retaking control.

Capital, not just trade

Nations with a trade surplus do not just export goods – they recycle their earnings into US assets, bidding up prices for real estate, stocks and government debt. This artificially supports the dollar while weakening the export competitiveness of the US and fuelling inequality through asset inflation.

By imposing tariffs and shifting the terms of capital access, the US is breaking this loop – this is where global trade and finance intersect.

US President Donald Trump’s proposed Treasury-backed digital dollar is not about crypto speculation – it is about geopolitical leverage. It gives individuals incountries with capital controls (such as China) direct, legal access to US dollar.

Currently, China limits individuals to $50,000 (£37,550) a year in foreign exchange. But a digital dollar bypasses that. Even small flows – $1,000 from millions of users – become systemic over time.

That means:

• Untraceable capital flight
• More demand for US Treasuries and dollar-backed instruments
• More control over who accesses dollars

It is not just money. It is monetary architecture.

Additionally, the US holds the largest official gold reserves in the world –8,133.5 metric tonnes. ($816bn)

China holds approximately 2,280 metric tonnes ($209bn) – about 28 per cent ofthe US total.

But the US has an estimated 18,000 metric tonnes of undiscovered gold –exceeding $1.8tn.

While not directly backed by gold, the digital dollar is implicitly strengthened by the US’s vast gold reserves. In a world where digital currencies challenge fiat trust, the perception of hard backing matters.

What it means for investors

1. Surplus economies will reflate and capital will flee

Tariffs will force monetary easing abroad. Lower rates in China, Europe andother surplus nations weakening their currencies and pushing savers towards higher-yielding, more secure dollar assets. Expect:

• US Treasuries to stay in demand
• The dollar structurally strong
• US equities to benefit

This creates long-term support for dollar-linked investments, regardless of US deficits.

2. Chinese and Chinese proxy exposure carries exit risk

As outflows rise, expect Beijing to tighten capital controls. That raises red flags for:

• Chinese American depositary receipts – representing shares issued by Chinese companies and traded on the US stock exchanges
• Private equity deals
• Local-currency debt and fund flows

It is no longer a question of what is the upside? – more a question of can I get outif I need to?

3. Sectors drive returns – more than the stock

Roughly 50 per cent of equity returns come from sector, not individual company selection. That matters more than ever.

Strategic sectors include:

• Domestic semi-conductors
• Defence and national security-linked contractors
• Utilities, infrastructure, and energy tied to reshoring – bringing production back to your shores

At-risk sectors include:

• Multinationals dependent on Chinese production or demand
• Supply chains reliant on low-cost emerging markets labour

The old macro map is obsolete

Old: Tariffs → US inflation → Federal Reserve hikes → Higher yields → Lower risk assets

Now: Tariffs → Foreign easing → Capital flight → Stronger dollar → Lower US yields

The US exports stagnation . . . and imports global capital.

Real assets are no longer optional

In a world of sticky inflation and falling interest rates, real assets become essential.

Energy infrastructure, gold, farmland, lithium and timber land gain strategic value (tangible, productive and politically protected)

Digital dollar

As more users adopt the digital dollar:

• dollar demand broadens;
• shadow capital flows formalise;
• US gains control over digital foreign exchange traffic;
• this deepens dollar liquidity while weakening foreign capital controls.

The new playbook

• Cash = optionality
• Cash is no longer dead money. In a world of policy volatility, it is tactical ammunition.
• Domestic capacity > global exposure
• Invest in businesses embedded in strategic sectors, not stretched across fragile geographies.
• Fintech and infrastructure benefit
• Digital dollar infrastructure providers and US-aligned stable coin platforms could emerge as long-term winners.
• China/China proxies = fragile exposure
• Investors must treat China like a market with asymmetric risk. The upside is capped; the downside is regulatory.
• India
• Not a shortcut, but a strategic counterweight.

Under a 10 per cent across-the-board import tariff, Indian goods will be subjectto the same baseline.

India’s exports to the US are nearly $100bn annually. These include:

• Pharmaceuticals
• Textiles and apparel
• IT hardware
• Machinery
• Auto components

In short, India is invested in the current system – but exposed to the next one.

Opportunity: India as a strategic counterweight

• A geopolitical counterweight to China
• A member of the Quadrilateral Security Dialogue – along with Australia, Japan and the US – and a growing defence partner
• A democratic, large-scale economy that still welcomes US investment and technology

In the context of so-called friend shoring – shifting business to allies – and the realignment of global manufacturing, India could emerge as:

• a preferred production hub for the US and Europe;
• a consumer-led growth story, not just an export economy;
• a pillar in an alternative trade architecture – especially if digital trade and bilateral ties deepen.

Final thoughts:

From 1990–2020, the global financial system benefited:

• Frictionless trade
• Dollar outflows
• Passive capital allocation

The system of 2025–2035 will advance:

• Strategic tariffs
• Domestic production
• Monetary architecture that serves policy, not just markets

This is not about fear. It is about foresight.

This is not just about volatility. It is about velocity and positioning for power in a rewired world.

The passive era is over. The rules are changing – it is a regime shift – with consequences for every asset class.