Another Financial Crisis “Made in the USA”? How Debt, Tarrifs, Crypto and AI Converge with War
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Another Financial Crisis “Made in the USA”?
The Agora Strategy Executive Briefing examines how rising U.S. public debt, geopolitical tensions—particularly the conflict with Iran—and new dynamics around tariffs, stablecoins, and the AI investment boom could interact to create new vulnerabilities for the global financial system. It also outlines the potential strategic implications for international businesses operating in an increasingly fragmented and politically driven financial environment.
Executive Summary
The US-Israeli war against Iran risks engulfing the wider region, threatening not just key energy producers but important trading hubs and financial centers. This risks exacerbating lingering concerns about global financial sustainability.
Already, Iran’s threat to close the Strait of Hormuz has led to an oil price shock which, if sustained, could weigh on global economic growth and trigger extra government stimulus policies. It would also create a clear pass-through to headline inflation, especially in energy-importing economies in Europe and Asia.
Governments may soon feel compelled to cushion the energy shock via subsidies, tax reductions on fuel, or price caps. While this may soften the immediate inflation and growth impact, it worsens their fiscal positions and adds to already elevated public debt levels. This, in turn, further reduces the global system’s fiscal buffers ahead of any future financial crisis.
US public debt in particular is becoming rapidly untenable. If markets react strongly to the war perspective, President Donald Trump is likely to start new initiatives to preserve and deepen American dominance of financial markets. Also, a possible flight into the US dollar will impact the exchange rate and FED policy.
More generally, power is shifting from markets to the political realm: US economic policy hinges on three interlinked levers—tariffs and active industrial policy, regulated dollar stablecoins under the GENIUS Act, and an AI‑driven and government supported investment boom—creating both growth opportunities for companies as well as new macro‑financial risk channels.
The recent US Supreme Court‘s decision to invalidate some of Trump‘s tariffs will lead to a flurry of lawsuits and market confusion as the president will use other legal instruments to uphold his tariffs. With bleak prospects for the mid-term elections in the fall, the court decision together with some dissenting Republican votes in Congress indicates the president’s shrinkening support in the party.
The combination of high leverage, concentrated AI bets and tighter links between digital finance and the Treasury market increases the speed and complexity of shock transmission, requiring more diversified funding, currency and risk strategies for firms. At the same time, cooperation and trust among partner governments and central banks to contain a potential crisis are eroding.