Napoleon warned: “Never interrupt your enemy when they are making a mistake.” Today, that maxim defines the global macro stage. The United States is busy undermining its own position, alienating allies with tariffs, piling debt on top of deficits, and fracturing its growth cycle with contradictory policies. China, by contrast, doesn’t need to act rashly. It simply waits, watches, and positions itself as the reliable partner to regions Washington is pushing away. The real story isn’t ideology; it’s structural fragility versus strategic patience. And for investors, the question is not who wins the next headline battle, but how to build resilience in a world where America stumbles and China quietly advance.
America’s Strategic Missteps
The United States is not just tripping over policy contradictions, it is embedding fragility into its system. Consider the following:
Tariff Escalation as a Tax on Households
Doubling tariffs on Indian goods to 50% raises consumer prices directly.
Inflationary pressure erodes real wages, squeezing middle‑class households already burdened by higher borrowing costs.
Debt Saturation Meets Deficit Addiction
National debt now exceeds $38 trillion, with annual deficits near $1.8 trillion.
This trajectory locks in higher interest expense, crowding out productive investment and limiting fiscal flexibility.
Contradictory Policy Mix
Tariffs act as contractionary taxes, while deficit‑financed tax cuts act as expansionary sugar highs.
Together, they create volatility rather than stability — a boom‑bust cycle baked into policy itself.
Fractured Growth Cycle
Elevated interest rates slow credit creation.
Immigration constraints reduce labor force growth.
Trade shocks disrupt supply chains.
EY forecasts GDP growth at just 1.7% in 2025, with recession risks at 40%.
Credibility Erosion Abroad
Allies see inconsistency: protectionism at home, deficit profligacy abroad.
This weakens America’s ability to lead coalitions, leaving space for China to present itself as the “reliable partner.”
America’s Strategic Missteps — Visible Outcomes
America’s recent policy choices have compounded into structural fragility. Tariff escalation has turned “America First” into “America Alone,” raising consumer prices and alienating allies from India to Europe.
Deficit‑financed tax cuts layered on top of a $38 trillion national debt and $1.8 trillion annual deficit have locked in fiscal vulnerability, while elevated interest rates and immigration constraints fracture the growth cycle.
The visible outcomes are clear: households squeezed by inflation and borrowing costs, EY’s U.S. GDP growth forecasts cut to just 1.7% for 2025, recession risks hovering near 40%, and a credibility gap abroad that leaves space for China to present itself as the reliable partner. These are not isolated errors, they are systemic choices eroding resilience at home and influence abroad.
China’s Silent Gains — Patience as Strategy
While America stumbles under the weight of its own contradictions, China is quietly consolidating strength. It doesn’t need to rush or provoke; it simply waits, watches, and positions itself as the reliable partner to regions Washington is pushing away:
Diplomatic Expansion
Deepening ties with South Asia, Africa, and Latin America where U.S. tariffs and isolationism have created openings.
Presenting itself as a steady alternative to America’s volatility, offering infrastructure, trade, and financing through initiatives like Belt and Road.
Economic Positioning
Leveraging America’s tariff wars to strengthen supply chain integration across Asia.
Building resilience by diversifying trade partners and securing long‑term resource contracts.
Narrative Control
Framing itself as pragmatic and patient, in contrast to America’s erratic policy swings.
Using consistency as a competitive advantage, reliability becomes its brand.
Growing Middle Class
China’s middle class has surged past 400 million people, accounting for more than half of domestic retail consumption.
This demographic is fueling demand for higher‑quality goods and services, reshaping consumption patterns, and underpinning China’s role as a stabilizing force in global demand.
GDP Growth Outpacing G7
Despite slowing momentum, China’s GDP growth is still projected to surpass most G7 economies.
Reflecting its ability to leverage domestic consumption and regional trade expansion as engines of resilience.
China’s Silent Gains — Visible Outcomes
China’s patient strategy is producing outcomes that are increasingly visible across both domestically and globally. Its expanding middle class, now more than 400 million strong and responsible for over half of domestic retail consumption, is reshaping demand patterns and fueling steady internal growth. This demographic engine, combined with resilient trade integration and long‑term resource agreements, provides a foundation for stability.
On the global stage, China’s GDP growth continues to outpace most G7 economies, China’s GDP growth in 2025 is projected at around 4.8%, significantly higher than the G7 average of roughly 1–2%. This means China’s expansion continues to outpace most advanced economies, reinforcing its role as a driver of global demand.
Diplomatically, Beijing is deepening ties in South Asia, Africa, Latin America, and Europe, presenting itself as a consistent partner in regions seeking reliability. The cumulative effect is greater influence in multilateral forums, expanding trade corridors, and a growing perception among emerging markets that China offers a pragmatic alternative. These gains are incremental rather than dramatic, but they compound over time, gradually shifting the balance of global economic power.
THE MACRO RADAR Takeaway
The global landscape is increasingly shaped by contrasting approaches. The United States faces challenges from policy contradictions, rising deficits, and uneven growth cycles that are straining resilience and credibility. China, meanwhile, is steadily expanding its role by strengthening trade relationships and positioning itself as a consistent partner in regions seeking stability.
For investors, the signals are clear:
Focus on resilience, not reaction. Look beyond headlines to the deeper structural shifts.
Diversify across cycles. Balance exposure to potential U.S. constraints and China’s incremental expansion.
Segment strategies. Different goals call for different positioning across regions and growth paths.
Think in systems, not snapshots. Both U.S. challenges and China’s gradual gains matter for long‑term allocation.
From Signal to Strategy
At THE MACRO RADAR, we decode the signals. But signals alone don’t protect portfolios. That’s where THE MACRO GPS comes in—translating these signals into actionable allocation strategies.
How much gold should sit in a portfolio?
What does the erosion of U.S. fiscal credibility mean for duration risk?
Where are the opportunities in a world where fiat is quietly debased?
These are not academic questions—they’re portfolio questions.
👉 Subscribe to THE MACRO GPS to move from narrative to navigation.
👉 Visit EdenHuang.com to learn more about how I can help build resilience and clarity in a world of uncertainty.
Sincerely,
Assistant Director
Investment Advisory
iFAST Global Markets
Terms of Use & Disclaimers:
“The Macro Radar”, "The Macro GPS" and “Wealth Strategy” sections of this newsletter are managed and written by Eden Huang, a representative of iFAST Global Markets, a division under iFAST Financial Pte Ltd.
The views and opinions expressed in this newsletter are those of the writer alone and do not necessarily reflect the views of any affiliated organization.
Views are based on information available at the time of writing and are subject to change as new economic data or market conditions emerge.
Information in this newsletter is intended for educational purposes and does not constitute personalized investment advice.
All materials and contents found in this newsletter should not be considered as an offer or solicitation to deal in any capital market products.
Future expectations outlined in this newsletter are based on available data and reasonable assumptions but are not assured. Economic trends and unforeseen events may alter outcomes.
If uncertain about the suitability of the product financing and/or investment product and/or asset allocation strategies, please seek advice from a licensed investment adviser, before making a decision to use the product financing facility and/or purchase the investment products.
Investment products involve risk, including the possible loss of the principal amount invested. Past performance is not indicative of future performance and yields may not be guaranteed.
While we try to provide accurate and timely information, there may be inadvertent omissions, inaccuracies, and typographical errors.
iFAST Global Markets: Terms and Conditions
This newsletter has not been reviewed by the Monetary Authority of Singapore.