🏛️ Section 899: How One Clause Could Break Global Trust in the U.S. Dollar
By Tina Winterlik aka Zipolita
June 2025
💥 What Is Section 899?
Buried in Donald Trump’s recently proposed economic bill (nicknamed the “Big, Beautiful Bill”), Section 899 is a clause that allows the U.S. Treasury to impose new taxes on foreign investors, even from allied countries like Canada, the UK, and Germany.
Under this section, the U.S. can:
- Label any country as “unfriendly”
- Impose withholding taxes of 5% to 20% on dividends and interest paid to investors from those countries
- Ignore or override existing tax treaties that previously allowed zero or low tax rates
This means countries that have trusted the U.S. for decades — and invested in its economy — could suddenly face financial penalties based purely on political decisions.
🧨 Why This Is Dangerous
This isn’t just about taxes — it’s about global trust, and the stability of the U.S. dollar as the world's reserve currency.
Here’s why Section 899 is such a big deal:
1. It Violates Longstanding Treaties
The U.S. has tax treaties with countries to encourage cross-border investment. Section 899 rips these up unilaterally, replacing trust with punishment.
📌 Fact: According to the U.S. Treasury, the U.S. has tax treaties with more than 60 countries, many of which reduce or eliminate withholding taxes to promote investment.
2. It Threatens U.S. Debt Financing
Countries like Japan, China, and Canada hold hundreds of billions in U.S. Treasury bonds. If they’re taxed or feel politically targeted, they’ll start selling those bonds.
📌 Fact:
- Japan held approx. $1.13 trillion in U.S. Treasuries as of early 2024 (U.S. Treasury data)
- China has reduced its U.S. bond holdings by over 40% since 2015 (Bloomberg, 2023)
3. It Could Trigger Higher Interest Rates and Inflation
If fewer countries buy U.S. bonds, the government must offer higher interest rates to attract investors — which affects everything from mortgages to food prices.
📌 Fact: The Federal Reserve has already warned in 2024 about “external risks” to interest rate stability due to declining foreign demand for U.S. debt (Federal Reserve Bulletin).
4. It Encourages a Global Shift Away from the Dollar
Nations are now:
- Building non-dollar trade systems
- Using currencies like the Chinese yuan
- Investing in BRICS alternatives to the Western financial system
📌 Fact: The BRICS countries (Brazil, Russia, India, China, South Africa) are developing a BRICS digital currency and cross-border payment systems to reduce dependency on the dollar (Reuters, 2024).
🌍 The World Is Already Responding
- China is trading more in yuan and building digital systems outside of SWIFT.
- Japan is buying fewer U.S. bonds and calling them “negotiating cards” — a sign of lost trust.
- Europe is pushing for “strategic autonomy” in finance and defense, reducing reliance on U.S. decisions.
The U.S. dollar — once seen as a safe haven — is now viewed as a political tool. And investors don’t like uncertainty.
📉 Is This the Collapse of an Empire?
Some economists argue that this is a sign of a larger breakdown in American leadership:
“The U.S. no longer leads — it coerces,” says economist Jeffrey Sachs.
“We are entering the terminal phase of capitalism,” says Richard Wolff, describing how the U.S. system is hollowing itself out — economically, politically, and diplomatically.
When you can no longer expand through innovation, diplomacy, or fair trade, you try to force others to play by your rules — even if they start walking away.
🔔 Section 899 Is a Warning Siren
This isn't just a policy mistake. It’s a paradigm shift.
If the U.S. punishes its own allies and threatens their investors, it shouldn’t be surprised when they stop investing. Trust — once broken — takes years to rebuild.
And while politicians argue, working-class people pay the price:
- Higher rents and mortgages
- More expensive groceries
- Less stable pensions
💡 What Needs to Change
We need a new global system built on:
- Fairness, not power politics
- Cooperation, not coercion
- Resilience, not dependence on fragile superpowers
If the U.S. is willing to burn down its own financial house, then the rest of the world must start building fireproof shelters.
📚 Sources and Further Reading
- U.S. Treasury Major Foreign Holders of Treasury Securities: https://home.treasury.gov
- Bloomberg: China Cuts U.S. Treasury Holdings
- Reuters: BRICS working on new financial alternatives
- Richard Wolff: Democracy at Work
- Jeffrey Sachs: Project Syndicate
🖋️ Written by Tina Winterlik aka Zipolita
🌐 Blog: TinaWinterlik.blogspot.com
📷 Insta/Twitter/Pinterest: @Zipolita
📣 Feel free to share and repost with credit. Let's raise awareness before it’s too late.
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