Trump is wrong. Trade wars are not easy to win, even non-players end up as losers

The economic fallout of Trump’s trade and currency wars can’t be rolled back with the throw of a switch

A global rescue can be financed only by central banks undertaking even bigger purchases of government debt than they have done already

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Traders at work after the opening bell at the New York Stock Exchange on August 15, when Wall Street stocks opened higher following mixed US economic data, bouncing modestly after the Dow suffered its worst session of the year. But brief “relief rallies” could be more signs that the markets are flying blind towards a crash landing. Photo: AFP

Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs.

Published: 12:30am, 19 Aug 2019Updated: 12:30am, 19 Aug 2019

Stock market “relief rallies” – such as the temporary one that greeted US President Donald Trump’s decision to hold off for the moment on imposing a further round of tariff increases on China – have become as frequent as they are fatuous. They are surely signs that markets are flying blind towards a crash landing.

If this sounds overly pessimistic, try counting the grounds for optimism that the global economy can exit safely from Trump’s trade and currency wars. Then compare the result with the reasons for fearing a stall, as speed and altitude meters continue to register declines, and see which scores highest.

It is not just indicators like the growth of the world’s biggest economies (the US, China, Japan and Germany) that are falling. A range of other instruments, registering everything from the rising value of dollar debt to outflows of funds from emerging markets, are signalling altitude loss.

Analyses from the International Monetary Fund, the Organisation for Economic Cooperation and Development and other sources have become increasingly cautious in recent months, as trade and currency wars exact a rising toll on confidence. But there are limits to the frankness that official bodies such as these can show without being accused of precipitating a crisis.

Yet, it does not require a gargantuan intellect to compute the risks in the global economy and to see that it is already in stall mode. The onus now is on those who believe recession can be avoided to justify their optimism, rather than on “pessimists” to prove their case.