The New American Doctrine

A common charge against Donald Trump is that his policies are erratic and incoherent. But while the execution may appear questionable—such as a Rose Garden address that featured a comically large, cardboard economic naughty list—there is a growing sense that something more deliberate is unfolding.

Focusing on what is being done, rather than what is being said, provides clearer insight into the administration's intentions. Since taking office this year, Trump has enacted three defining policy moves: sweeping tariffs, the Department of Government Efficiency (DOGE), and a $1 trillion defence budget. Each has been justified by a ballooning U.S. national debt (The Times; Politico; Axios, April 2025). However, taken together, they suggest not simply a concern for fiscal management but a deeper ambition: to reorganize global political and economic norms and China is in the main crosshairs. This administration signals a pivot away from the liberal democratic consensus of the post-Cold War era toward a more sovereign, transactional, and increasingly mercantilist framework—one with real implications for portfolio strategy.

The Debt Crisis

Trump has framed the United States’ debt crisis as justification for his aggressive policymaking. The crisis is not in dispute: as of April 2025, U.S. debt stands at $36.2 trillion, with $9.2 trillion due for refinancing this year. This pressure has brought renewed focus to the Federal Reserve, with Trump openly calling for rate cuts (Reuters, March 24 & April 4, 2025). But managing the country’s debt appears to support a broader strategic goal: to reshape the global economic order in a way that centralizes U.S. power, curtails China's rising challenge, and enhances the legacy of its chief architect.

Tariffs

While tariffs carry recession risks, these current measures serve a more strategic purpose. What critics initially dismissed as incoherent—the Rose Garden announcement—now reveals a deliberate design. Trump has been clear: the objective is to convert American consumer demand from a global public good into a controlled, negotiable asset. By placing a toll on access to the U.S. market, tariffs grant favourable terms only to those willing to concede something meaningful. This creates leverage in bilateral talks and reinforces Trump’s image as a dealmaker. Today’s move—reducing all tariffs to 10%, while maintaining a total effective tariff of 125% on China—makes the strategy clearer. China is the central target, and with a $300 billion trade surplus, its vulnerability is acute. A high tariff hits them far harder than it hits the U.S. Conveniently, tariffs also suppress demand, indirectly pressuring the Federal Reserve toward rate cuts in a year marked by massive refinancing. These are not just economic tools—they are instruments of diplomacy and statecraft. They reflect a conviction that the U.S. has long underleveraged one of its most valuable assets, the American consumer. This is mercantilism in modern dress.

DOGE

Initially presented as a cost-cutting initiative, the Department of Government Efficiency increasingly appears to serve a deeper function: aligning the federal civil service with the administration’s agenda. Schedule F enables loyalty-based hiring and firing across civil service ranks. DOGE has been tasked with reviewing departments seen as resistant to prior directives, contributing to shakeups at the Department of Justice, NSA, and Department of Education (The Times). These moves point to a dual mission: operational efficiency and institutional alignment. DOGE has become a structural instrument for ensuring that executive direction is carried out with minimal resistance. This reflects historical precedent. In 18th-century Prussia, Frederick the Great overhauled the civil service to enforce loyalty and execute state objectives efficiently. But that model also created rigidity, suppressed dissent, and laid the groundwork for future authoritarianism. In that context, DOGE is less a neutral reform and more a mechanism for consolidating control—one capable of sidelining internal opposition and amplifying executive will.

Military Spending

The $1 trillion defence budget is both a statement of strength and an economic engine. In the context of rising debt, it also serves as fiscal stimulus, much like Roosevelt’s New Deal-era defence spending. But today’s budget is more than a historical echo. It channels resources into strategic sectors, from aerospace to advanced manufacturing, without the baggage of a declared industrial policy. It guides capital into dual-use technologies—those with both military and civilian applications—and fosters innovation under a national security umbrella. Past public investment in defence has catalyzed major breakthroughs across the private sector (The Entrepreneurial State). The Cold War-era expansion of computing, telecommunications, and aerospace industries is one such example. This also serves as a major deterrent to an ever-hostile Beijing that seeks greater geopolitical control in regions like the South China Sea and the Taiwan Strait. 

Portfolio Implications

Trump’s approach is about more than tariffs or deficits. It’s a vision of a new American doctrine—one grounded in leverage, loyalty, and strategic strength. The debt isn’t the problem, but the indicator: proof, in Trump's vision, that America has underleveraged its global asset. This isn’t a revolution; it’s a rebalancing—one that requires investment professionals to reconsider long-standing assumptions and rethink where value will emerge. Real assets—commodities, real estate, manufacturing inputs—stand to benefit in a world where control drives wealth. Defence and security sectors are poised to grow. Onshoring will favour infrastructure and industrial REITs. And as currency regimes shift, gold and precious metals will offer insulation and optionality.

Ultimately, headlines can distract from what matters. But investors know that moments like this require clarity and precision—about what you own, why you own it, and where it fits in a shifting world. If you’re reflecting on how this affects your portfolio, it’s a conversation worth having—and one we’d welcome.