Wednesday 23 October 2019

Editorial: 'Trump risks global trade war as he plays with fire'

US President Donald Trump. Photo: Reuters
US President Donald Trump. Photo: Reuters
Editorial

Editorial

Speaker Nancy Pelosi presents as protector of the US constitution, but as far as Donald Trump is concerned, she presents as a permanent pain.

With Democrats braced for war with the president over access to Robert Mueller's report, matters were always coming to a head.

Then came revelations this week that the author of 'The Art of The Deal' spent more than a decade in the red, losing more than $1bn. This will not have played well with the equilibrium of the commander in chief.

There was going to be a backlash, but tweaking the tail of the dragon in Beijing never bodes well. The last thing the US or the rest of the world needs is a trade war between the two largest economies. Yet by noon yesterday, a tweet by Mr Trump looked like being one of the costliest ever. It resulted in $1.8 trillion being wiped off the markets.

Mr Trump takes pride in his slapping $200bn on goods from China. It is part of his quest to squeeze trade concessions out of Beijing. China is sure to respond. "Fasten your seatbelt and don't hold your breath," Bank of America has warned. Economists at Moody's Analytics feel an all-out trade conflagration between the two risks tipping the US economy into recession by the end of 2020.

This would be just as US voters go to the polls. As a re-election strategy, it leaves a lot to be desired. But as to what precisely triggered the escalation of the trade war, it is as impossible to say as it is to predict how it will end.

Distraction and diversion are two cards this president flourishes with when the stakes are stacked against him. And the stakes are thus stacked. According to Ms Pelosi: "It's not about pressure. It's about patriotism."

This week advocacy groups delivered to Congress petitions they say contain 10 million signatures supporting Mr Trump's impeachment. Meanwhile, North Korea continues to snub its nose at Capitol Hill, showcasing its new missiles.

There are also growing anxieties over the screws being tightened on Iran. A mistake in Washington or Tehran could rapidly escalate into a disaster.

Henry Kissinger said: "A turbulent history has taught Chinese leaders that not every problem has a solution and that too great an emphasis on total mastery over specific events could upset the harmony of the universe." Mr Trump is not known to lose much sleep over the harmony of the universe.

This time last year Kieran McQuinn, research professor with the ESRI, warned a global trade war is almost more threatening for Ireland than Brexit, given we would have no control over it. The concern must now be whether in order to dig himself out of a hole Mr Trump could be leading the rest of the world into an economic crater.

Irish Independent

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