EconoScope | Tariff war fuels the world to 'sell off America'

(ECNS) -- The tariff war initiated by the United States is accelerating the world's move to "sell off America."

In less than two weeks, U.S. markets have twice witnessed steep declines in stocks, bonds, and the U.S. dollar. In a single day, U.S. treasuries, often regarded as the "anchor of global asset pricing," were dumped, alongside a plunge in U.S. equities and a historic drop in the dollar.

Market turmoils are sending a clear message: investors are rapidly pulling out of America.

The Wall Street Journal quoted former Senate Banking Committee Chairman Phil Gramm as saying that the current U.S. administration has already created enormous uncertainty in international trade policy.

Historically, global financial turbulence would drive capital back into the dollar and U.S. bonds. But now, as Bloomberg put it, Washington has become the epicenter of instability. The dollar and U.S. bonds, once reliable safe havens, have lost their appeal.

More alarmingly, this trade conflict risks evolving into a full-scale "capital war."

So far in 2025, Bloomberg's U.S. Dollar Index has fallen more than 7 percent, marking its worst annual start since 2005. This month, a heavy sell-off in U.S. debt pushed the 10-year yield to its largest weekly increase in over two decades.

Bloomberg said on Monday that U.S. bonds and the dollar are not playing their usual safe-haven role, a sign that markets are reacting pessimistically to tariff-driven policy shifts.

In the short term, the sell-off of U.S. assets may reflect profit-seeking results. But the deeper issue is that as the belief in "American exceptionalism" fades, markets are naturally redefining the U.S. role in the global economic landscape.

Adding to the pressure, the International Monetary Fund released its latest World Economic Outlook on Tuesday, projecting that U.S. GDP growth will slow to 1.8 percent in 2025, a full 0.9 percentage points lower than its January forecast and the sharpest downgrade among advanced economies.

With rising policy uncertainty, escalating trade tensions, and weakening demand, a new consensus may be emerging in global markets: it's time to "sell off America."

(By Gong Weiwei)