His tariffs promised to shower the United States with more jobs and affluence, but only brought financial loss and misery to businesses and households. His economic terrorism against Iran and others have only made them stronger. The most lasting consequences of his actions have also been the dismantling of global economy. The trade war has slowed down global growth, affecting the natural wealth of other nations and the local economies of household, neighborhood and community.
Strange enough, the disruptor-in-chief and sanctions hawks in Congress refuse to press the pause button on their economic-war instincts and anti-multilateralism agenda. They use false claims to import some of their most odious ideas into the mainstream. And they enjoy being acknowledged and appreciated for all the wrong reasons.
Wrong and disruptive because their economic wars and sanctions against friends and foes plus the global nature of their growing trade tensions have been taken in by the Group of 20 finance leaders as well. They represent 19 of the world’s largest developed and developing nations and the EU, and they are not treating the economic wars like any other issue or even less than that.
As it happens, the IMF has warned that the trade war could knock 0.5 percent from global GDP output in 2020. Netherlands-based investment bank ING has said the damage will make 2019 the worst year for trade. Bundesbank President Jens Weidmann and Goldman Sachs analysts have all said the dispute could reduce global trade by 1% in the medium term, and if Trump ups the ante, the peak boost to core inflation could reach 0.9 of a percentage point, alongside a dent in US GDP.
Tell that to Trump and those still distracted by the memory of past glory in Congress with so much political interest directed elsewhere. They see no impact on US growth from the worsening trade conflicts and sanctions, claiming they have taken steps to protect consumers from disruptive agendas. These are the same households that Federal Reserve officials, including New York Fed President John Williams, say are “on the front line of the trade war”. They say a boost to inflation is right around the corner, and with a potential drain on confidence among businesses and financial markets.
No doubt the damage from the US sanctions and trade and economic policies has made 2019 the worst year for global trade and economy. It is still happening in plain sight and it has negatively affected the whole world. The destruction is not just happening elsewhere; it is now true of the US as well. The full impact of the tariffs and economic frictions have fallen on American consumers and businesses, a drain on the economy beyond the direct cost of the levies, which Goldman Sachs analysts say did cost 1.4 billion US dollars a month last year.
This should spare no evidence of the coming economic catastrophe. The dispute has reached beyond the world’s largest economy as many other economies are also performing bad. This should deliver a rebuke of Trump’s obsession with sanctions, tariffs and trade conflicts. It represents a symbolic condemnation of his decision and exerts political pressure on him to normalize the abnormal.
The reality of the situation is that Trump cannot go on forever threatening friends and foes with disruptive sanctions, tariffs and trade wars. The global unraveling has come. Trump is better off accepting it as a signal that his trade and sanctions plans are not sound, rebuild those plans, and set sail once more toward the coveted goal of global community, which is recognition of a rules-based international order.