The dollar's sell-off raises concerns that investors are losing trust in U.S.

It's less like a ship and more like a house made of wood that's been lit on fire. The parts that have already burned will take considerable time to repair, but that's no reason to let the fire continue burning.

Yes, the U.S. has now destroyed trust built up over a century that will take several decades to restore. People around the world have realized that, although Trump's term will be up in four years (probably), the U.S.'s vaunted system of checks and balances doesn't work and a similar president could be elected at any time.

However, much of the house yet remains unburned. If the Republican party, the judiciary branch, etc. make a concerted effort, they can check Trump and mitigate the damage he's doing. They might not be able to magically restore the trust that's already been lost, but they can prevent things from getting even worse.

The world is watching.

The markets in particular, though, were willing to suspend disbelief far longer than most, with pricing early this year reflecting a future in which Trump simply didn't any of the stuff he had explicitly said he would on trade. They are still suspending some disbelief; current pricing does not reflect a view of the future in which Trump's tariffs hang around for long.

The markets in general have a bit of a 'nothing ever happens' bias; their response to the US president doing really weird insane stuff is, still, largely to go "oh, well, it'll probably all be undone next week", and in fairness he _does_ seem cowed by the (so far moderate) market response, and it has caused him to blink a few times.