Core Viewpoint - The article discusses the imbalance in the U.S. fiscal structure exacerbated by the Trump administration's policies, highlighting the negative impacts on both the U.S. and global economies [1][2][3]. Fiscal Revenue and Expenditure - In FY2025, U.S. federal revenue is projected at $5.2 trillion, while expenditures will reach $7.01 trillion, resulting in a budget deficit of approximately $1.8 trillion, marking the sixth consecutive year of deficits exceeding $1 trillion [2]. - Personal income tax remains the primary source of revenue at $2.66 trillion, with a year-on-year growth of 10%. Tariff revenues have surged significantly, indicating a shift towards reliance on tariffs rather than personal income taxes [2]. - Major expenditures are concentrated in mandatory spending areas such as social security, Medicare, and Medicaid, with interest payments on debt surpassing $1 trillion [2]. Economic and Trade Impacts - The adjustment in fiscal policy is causing severe macroeconomic and consumer rights losses in the U.S. High tariffs are increasing costs for importers, contributing to inflationary pressures and potentially harming the international competitiveness of U.S. manufacturing [3]. - The reliance on tariffs to cover fiscal shortfalls is leading to efficiency losses, negatively affecting the majority of American residents, with the overall economic cost of tariff policies likely exceeding fiscal benefits [3]. - The U.S. education department's budget is set to drastically reduce from $268 billion in FY2024 to $34 billion in FY2025, significantly impacting public schools and vulnerable groups [3]. Global Supply Chain and Trade Dynamics - The "Great America Act," signed by Trump, is expected to increase the U.S. fiscal deficit by approximately $3.4 trillion over the next decade, leading to significant changes in fiscal structure and global supply chain dynamics [4]. - The trend towards regionalization and localization in global supply chains is being reinforced by U.S. policies, which may increase business adjustment costs and fragment global trade [4]. U.S.-China Economic Relations - The sustainability of U.S. debt is becoming increasingly problematic, with interest payments projected to account for about 3.4% of GDP in FY2025, while actual GDP growth remains around 2%, indicating difficulties in servicing debt [5]. - If the U.S. fiscal situation does not improve, the risk of debt default could threaten the safety of Chinese-held U.S. dollar assets [6]. - Tariff increases are raising costs for Chinese goods entering the U.S. market, leading to a decline in bilateral trade, with Chinese exports to the U.S. down 17% and imports down 12% in the first ten months of 2025 [6]. Strategic Responses - To mitigate negative impacts, strategies should include maintaining global supply chain stability and engaging in tax competition, while also enhancing domestic production capabilities and exploring regional cooperation [7][8]. - Building an open economy driven by domestic demand is essential, with a focus on government investment in future industries and strategic sectors, as well as enhancing the role of the RMB in international trade [8]. - Improving fiscal management and preventing financial risks through tax system reforms and optimizing foreign exchange reserves are critical for ensuring fiscal sustainability [8].

Core Viewpoint - The article discusses the imbalance in the U.S. fiscal structure exacerbated by the Trump administration's policies, highlighting the negative impacts on both the U.S. and global economies [1][3]. Fiscal Revenue and Expenditure - In FY2025, U.S. federal revenue is projected at $5.2 trillion, while expenditures are expected to reach $7.01 trillion, resulting in a budget deficit of approximately $1.8 trillion, marking the sixth consecutive year of deficits exceeding $1 trillion [1]. - Personal income tax remains the primary source of revenue at $2.66 trillion, with a year-on-year growth of 10%. Tariff revenues have surged significantly, indicating a shift towards reliance on tariffs rather than personal income taxes [1][2]. Expenditure Trends - Major expenditures are concentrated in mandatory spending areas such as Social Security, Medicare, and Medicaid, with debt interest payments surpassing $1 trillion [1]. - The U.S. Department of Education's budget is set to drastically decrease from $268 billion in FY2024 to $34 billion in FY2025, significantly impacting public schools and educational programs reliant on federal funding [3]. Economic Impacts - The high tariffs imposed by the U.S. are expected to increase costs for import-dependent businesses, contributing to inflation and potentially harming the international competitiveness of U.S. manufacturing [3]. - The fiscal strategy of using tariffs to cover budget deficits may lead to efficiency losses and worsen the economic situation for many American residents [3]. Global Trade and Supply Chain Effects - The implementation of the "America First" strategy and the "Big and Beautiful Act" is projected to increase the U.S. fiscal deficit by approximately $3.4 trillion over the next decade, leading to significant changes in the fiscal structure [4]. - The restructuring of global supply chains is anticipated, with a trend towards regionalization and localization, which may increase costs for businesses adapting to policy changes [4]. U.S.-China Trade Relations - The U.S. debt sustainability issue is becoming critical, with debt interest payments projected to account for about 3.4% of GDP in FY2025, raising concerns about potential debt defaults that could threaten Chinese holdings of U.S. dollar assets [5]. - Tariffs imposed by the U.S. are likely to increase costs for Chinese goods entering the U.S. market, resulting in a significant decline in trade, with Chinese exports to the U.S. dropping by 17% and imports by 12% in the first ten months of 2025 [5]. Strategic Recommendations - To mitigate negative impacts, it is suggested that China maintain stable global supply chains and engage in tax competition while enhancing economic cooperation with ASEAN countries [6]. - The establishment of an open economic system driven by domestic demand is recommended, alongside active government investment in strategic industries and infrastructure [7]. - Improving the fiscal structure and enhancing tax systems to attract high-income individuals while ensuring financial sustainability is also advised [7].