Macroscope | The writing on the wall shows world’s biggest markets coming together to push back against Trump’s trade war
- Japan’s prime minister Shinzo Abe has recently concluded two important trade deals, neither including the US
- Trump does not seem to understand that, important and huge as the US market is, many other growing markets are forming alliances in which a belligerent, trade war-wielding America isn’t welcomed
Donald Trump continues to bang the drum of trade wars with China and others, but he may achieve only a Pyrrhic victory as he pushes the global economy toward an increasingly likely economic slowdown, or even recession.
The US could also be left standing alone as he drives the main targets of his attack into new alliances.
Signs of trouble continue to grow, amid slowing economic growth in China, Japan and elsewhere, partly due to trade friction, and partly due to reduced demand across a swathe of the global economy. All this is being reflected in wobbly financial markets.
He could well find himself breaking down tariff barriers in trading partner countries whose demand for goods is meanwhile being blighted by a global slowdown of his own making. It is hard to see how this could possibly make America great again - unless it is by offering financial bailouts to other economies.
But it is in the longer term implications of trade wars that Trump and his more hawkish economic aides are being dangerously short sighted and are risking a diminution rather than an enlargement of US economic power. They appear to be blind to fundamental trade shifts that are taking place across Asia.