Macroscope | It’s about time someone yells ‘It’s trade, stupid’ to Trump’s trade negotiators and enlighten them on the folly of their errors
- The world’s economy is slowing, with growth slowing in the US, the euro zone and China
- It’s not the decline that is worrying, but what’s driving it: Shrinking trade
Bill Clinton said “It’s the economy, stupid” during his 1992 US presidential election to alert then President George H. Bush to the state of the American economy.
Now, someone needs to tell Donald Trump “it’s trade, stupid” and draw his attention to the dangerous slowdown in global commerce caused by his trade war.
Much damage already has been done. Even in the highly unlikely event that Trump were to call off his belligerence, the damage will sill be felt. Economic slowdown has gained a momentum of its own irrespective of what Trump does now. He and others are deluded in clinging to the idea of rapid recovery once the White House ends hostilities.
Just how deluded must be obvious to anyone who cares to read the latest Interim Economic Outlook by the Organisation of Economic Cooperation and Development (OECD). It offers a very lucid and concise of summary of what’s going on and is recommended reading not only for the White House but also for financial markets.
The world’s economy is slowing, even in the US, where 2019 growth is set to fall to 2.6 per cent from last year’s 2.8 per cent. US investment and exports are slowing as (ironically) tariffs rise and employment gains soften on fading fiscal stimulus.
