Macroscope | Donald Trump’s attacks and coronavirus effects have left global trade battered and leaderless
- Any post-outbreak recovery for the world economy is likely to be very slow without robust, well-supported trade infrastructure
- The US administration’s choice to assail global institutions rather than fortify them creates a potentially destabilising leadership vacuum
What a sad and dangerous state world trade has fallen into. It would be more accurate to say has “been pushed into”, though, first by US President Donald Trump’s trade wars with China and other countries, and then by the advent of the coronavirus pandemic – in that order.
It is sad because a system of rules crafted carefully over decades with the backing of more enlightened US administrations than the current one is being wantonly damaged. It is dangerous because without a strong trade infrastructure the global economy will recover only very slowly at best.
By offering incentives to US firms to abandon China and Chinese suppliers, he fuels protectionism that can destroy the trade networks multinational companies – including US firms – depend on. China will probably build new chains, but global efficiency and overall comparative advantage will suffer.
