'All indebted empires end this way': Economist says Trump's tariff is about covering up $37 tn debt

After US President Donald Trump slapped a 25% tariff on Indian goods, economist and Pinetree Macro Co-Founder Ritesh Jain has framed the move as a symptom of deeper structural issues within the US economy. "This is not about India. This is about 'indebted empire'. The empire wants others to pay for its debt," Jain wrote. "Between 2005–2025, US total debt has gone from $5T to $37T but nobody knows what US got in return for that debt except never-ending wars."

Jain's comments came as Trump announced sweeping trade measures on Wednesday, including a 25% tariff on all Indian imports from August 1 and an additional penalty linked to India’s energy and defence trade with Russia. The decision was followed by a sharp public remark: "I don't care what India does with Russia. They can take their dead economies down together, for all I care," Trump said, criticising India's high tariffs and defence alignment.

Jain argued that the global system is no longer absorbing US debt the way it once did. "Now the empire also knows that world has stopped recycling its surplus in U.S. treasuries, so it wants ROW (rest of world) to pay in the form of tariffs (for access to U.S. markets)," he said.

He pointed to America's attempts to extract trade concessions from other powers: "It tried the same thing with China but China just refused to send 'rare earth magnets' to US and the truce between US and China is extended… in reality U.S. has no card to play against China till U.S. restores supply chains."

According to Jain, the United States has been more successful in leveraging its power over allies that rely on its security umbrella. "Europe bowed down because it needs US military umbrella...that’s what happens when you continue to have a colonial mindset. Japanese bowed down because after all Japanese are used to bowing down to US for a long time. They even wrecked their own economy after Plaza Accord to mollify Americans."

India, he noted, is different. "Most people don't realise that India is a domestic-oriented economy and external trade as % of GDP is quite small compared to other countries,” Jain wrote. "Americans tried a friend-carrot approach with India and China to break away from Russia and now they are applying stick approach… let's see."

He concluded with a historical analogy: "But all empires from 'Roman times' become indebted and arrogant towards the end of their reign."

The comments come amid growing scrutiny of the United States' long-term fiscal trajectory. As of May 2025, the US national debt stands at $36.22 trillion, or 124% of GDP—its highest level since World War II. According to the Congressional Budget Office, that figure is expected to hit 156% of GDP by 2055, raising concern that rising interest payments will crowd out spending on defence and other strategic priorities.

Last month, Moody's downgraded the US credit rating, making it the last major agency to strip Washington of its Aaa status. The agency cited unsustainable debt burdens as a risk to global confidence in the dollar. 

Tesla CEO Elon Musk echoed similar warnings, saying: "If this continues, America goes de facto bankrupt and all tax revenue will go to paying interest on the national debt with nothing left for anything else."