Bundesbank President Warns U.S. Tariff Policies Risk 'Meltdown'
May 25—Bundesbank President Joachim Nagel warned this week that the United States risks triggering a "meltdown" of the financial system if it does not back off its tariff and other disruptive economic policies. Speaking at a press conference following the G7 Finance Ministers meeting in Canada on May 23, Nagel stated that the world came close to such a crisis in April, when President Donald Trump’s tariff announcement sent shockwaves through U.S. bond and stock markets, sparking panic across global financial markets.
Nagel’s use of the term "meltdown" startled financial analysts in Wall Street and the City of London, where bankers—especially central bankers-- typically avoid language that could undermine confidence in the system. However, when pressed for clarification, Nagel did not retract his statement.
"If you look at the situation we had in the first week of April, the volatility in U.S. Treasuries, if you were to put that into some kind of normal distribution and put a few standard deviations around it, then you would actually be in areas where the probability would be very high, if you take the historical data, that something like this could happen," Nagel said. "That’s why I think you can use a term like ‘meltdown’ if this process had continued. Fortunately, that wasn’t the case."
Trump’s Tariff Strategy and European Tensions
Despite Nagel’s warning, the crisis he described had since receded, with new trade deals favoring the U.S. being negotiated and tariffs adjusted. However, sources suggest that Trump’s frustration with European leaders—particularly France, Germany, and the United Kingdom—over their interference in his efforts to end NATO’s war against Russia in Ukraine has led him to consider imposing new tariffs on Europe.
Trump has reportedly begun circulating this threat, signaling a potential escalation in trade tensions.
Financial System Vulnerabilities and Strategic Risks
The trans-Atlantic financial system has long been viewed as overdue for a collapse, sustained largely by media-driven illusions of solvency. Some sources suggest that if Trump provides a credible excuse, London’s financial elite—alongside Wall Street—could choose to trigger a systemic collapse and blame him for the fallout.
Under this scenario, financial institutions would seek to assert control over sovereign governments, implementing a global austerity program that they would pressure China to accept. However, sources indicate that even if financial leaders were inclined to pursue such a strategy, the risk that China and the Global South might refuse to cooperate—and that some within Trump’s circle might explore partnerships with the East to establish a new global financial system—could give them pause.