As a young man, I dreamed of becoming a currency trader, so I majored in international finance. I studied balance of payments, current accounts and how trade policies shape a nation’s economy — not enough to make me an expert, but enough to grasp the math. A net exporter (exports exceeding imports) boosts its GDP; a net importer (imports outpacing exports) sees GDP shrink. It’s simple arithmetic with profound stakes.

For 50 years, the U.S. has been a net importer, exporting wealth to trade-surplus nations like Japan, China and Germany. This imbalance has fueled a sovereign debt crisis — our national debt-to-GDP ratio now exceeds 135% — and hollowed out the middle class. The Trump administration’s tariff strategy, paired with a push to lead in blockchain technology, aims to reverse this, re-industrializing the U.S. and securing its digital-economic edge.

It’s a high stakes reset of global commerce that could define U.S. dominance for the 21st century.

 

The problem: Trade imbalances, wealth drain

Trade isn’t inherently good or bad — imports bring affordable goods, and exports build capital. But decades of deficits have tilted the scales. In 2018, the U.S. ran a $419 billion trade deficit with China alone, importing cheap electronics while losing factory jobs. Japan’s 1980s export boom — cars, lawnmowers, even small jets — turned them into a global powerhouse, with enough cash to snap up Rockefeller Center for $846 million in 1989. Their bubble later burst, but the lesson stuck: net exporters amass wealth. Meanwhile, the U.S. has financed consumption with debt, growing from 64% of GDP in 2008 to over 135% today. This isn’t sustainable — debt outpacing GDP growth erodes economic resilience.

The middle class has paid the price. Trade deficits accelerated factory closures — think Detroit’s auto plants — while automation and offshoring killed stable, unionized jobs. Today, the top 10% own 88% of U.S. wealth, the next 40% hold 12% and the bottom 50% are in debt. The wealth isn’t gone; it’s shifted to nations running surpluses with us. A digital shift, like blockchain, could help reclaim it — but more on that later.

 

The evidence: From Japan to China

Japan set the template. In the ‘80s, they flooded the U.S. with reliable goods, racking up billions in surpluses. Their wealth peaked with trophy buys like Pebble Beach, but overconfidence led to a crash they’re still recovering from. China scaled this model, leveraging low labor costs and a managed yuan to dominate manufacturing. By 2018, their surplus with us hit $419 billion. Germany’s precision exports — cars, machinery — gave it a $68 billion edge in 2023. These nations aren’t “predators” in a sinister sense; they’re strategic, often using higher tariffs (e.g., China’s 25% on U.S. cars vs. our 2.5%) or subsidies to tilt trade their way. The U.S., with open markets, has been the consumer engine — great for cheap TVs, lousy for job growth.

 

The solution: Tariffs and blockchain leadership

Trump’s tariffs target two goals: neutralize unfair trade barriers and incentivize U.S. production. Take China’s car tariffs — 25% vs. our 2.5%. Equalizing that could slow the wealth drain. More ambitiously, tariffs aim to spark a manufacturing revival, turning the U.S. into a net exporter again — steel plants humming in Ohio, not just Shenzhen. But it’s not risk-free. A 25% tariff on Chinese goods could hike electronics prices, and retaliation — like China’s 2018 soybean tariffs — hits farmers. Success hinges on execution: tax relief for consumers, subsidies for factories and training for a modern workforce.

Enter blockchain — a game-changer Trump’s team is betting on. Beyond crypto hype, blockchain offers tamper-proof ledgers for trade, slashing costs and fraud. Imagine U.S. exporters using smart contracts to settle deals instantly, bypassing bloated bureaucracies. In 2023, global trade inefficiencies cost $1.6 trillion annually — blockchain could claw back billions, making U.S. goods hyper-competitive. It’s already happening: Walmart uses it to track supply chains, cutting food recall times from days to seconds. Scaled up, this tech could secure digital trade routes, much like navies secured shipping lanes in the 20th century.

Blockchain also future-proofs finance. If the U.S. leads in tokenized assets — think digital bonds or a blockchain-backed dollar — it could reinforce the dollar’s reserve status against rivals like China’s digital yuan. Pair this with tariffs, and you’ve got a one-two punch: physical goods flowing out, digital dominance locking in profits. It’s not just factories; it’s coders and engineers rebuilding the middle class through high-skill jobs.

 

The steakes: Leadership or decline

This isn’t Bretton Woods 2.0, but it’s the biggest trade shift since President Nixon took us off the gold standard in 1971 — with blockchain as the X-factor. If tariffs rebalance trade and blockchain secures the digital economy, we’ll see GDP climb, debt stabilize, and wealth redistribute — less for the top 10%, more for the rest. By 2028, we’ll know: thriving exports and blockchain hubs or stubborn deficits and tech lag. The upside is immense — economic and military leadership for a century. Blockchain could employ millions — think 1990s internet boom but decentralized — while tariffs revive manufacturing. Together, they’d make the U.S. the nexus of global trade and innovation.

If it fails, higher prices and trade wars could sour tariffs, and blockchain rivals (China’s already testing its digital yuan in 14 provinces) could leap ahead. Someone else takes the reins in 2028 — maybe we pivot to woke policies again. But no one else is thinking this big. The U.S. has a rare gift: we self-correct like no other nation. Let’s give this dual strategy a shot — the upside asymmetry of reward outweighs the risk.

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Neil Paschall is a managing director at ACT Capital Advisors, a top 25 lower middle market investment bank. He is developing a practice specialty in capital formation and M&A for blockchain technology and cryptocurrencies.