BY: Ebrahim Fallahi

Trump's unilateralism hurting global economy

October 29, 2019

TEHRAN – Since 2017, when Donald Trump took office in the White House, the global economy has gone through a whirlwind of deteriorating events. The situation has become worse every year so that most international economic institutions and organizations are becoming skeptic about the outlook of the global economy.

The United States’ trade war with China, the country’s hostile stance toward many of the world’s developing countries and threats and imposition of rounds and rounds of sanctions on many influential nations has pushed the global economy toward a threshold of potential recession.

The global economy’s severe condition was the topic of many small talks during the International Monetary Fund and World Bank fall meetings in Washington this month.

Clearly Trump’s impulsive acts are not merely affecting some targeted countries and quivers of Washington’s irrational decisions are finally being felt all around the world.

IMF Managing Director Kristalina Georgieva’s speech at the IMF gathering was a clear indication of the pain which is being felt by economies all around the world. Mentioning the negative impact of U.S. policies Georgieva said if the situation continues “Everybody loses!” 

Many of the Central bank governors and finance ministers attending the events also shared the IMF head’s concerns that Trump’s actions are destroying all that has been achieved so far based on the international monetary collaborations. 

World Bank President David Malpass believed that U.S. policy has shifted from the 1940s, when Washington co-founded the IMF. 

“In those years, when U.S. co-founded IMF, the Washington message was that broadly shared prosperity benefits everyone,” Malpass regretted.

Trump a threat to economic stability

Christine Lagarde, former head of the International Monetary Fund, and the new head of European Central Bank (ECB) said last week that Trump is the source of many major risks facing the global economy.

According to Lagarde, Trump’s unpredictability is making the market unpredictable and consequently investors and traders are not willing to take risks anymore.

“The trade war is going to give a big haircut to the global economy,” Lagarde said in an interview with CBS on Sunday.

Europe: the exporters

The damage inflicted by Trump actions is particularly being felt among exporting countries, many of which are heavily dependent on their exports.

Uncertainty has become widespread among traders which, as Lagarde said, due to Trump’s unpredictable personality are less and less inclined to take risks. 

The U.S. policy is undermining the world’s open trade and even many developed economies are also beginning to see the fact that U.S.’s unilateralism is a huge threat to the stability of the global economy.

As the European Union’s Economic and Financial Affairs Commissioner Pierre Moscovici put it European countries which “rely on exports and are open to trade,” are among the nations that are feeling the pressure the most.

Global economy tied to U.S. interests

Economic expert and analyst Mohammad-Ali Kazemian also believes that Donald Trump has disrupted the balance of the world economy and the rules of world trade since he took power.

“Before Trump came to power, we saw the global economy abiding by specific rules and regulations. The new American president, being in power, broke all these rules and equations.” Kazemian said in an interview with Tehran Times.

This indicates how the U.S. policies and actions will end up harming the world economy and trade, he noted.

"Multinational companies and enterprises have suffered the worst from Trump's presence in power. Such corporations adjusted their businesses based on free trade rules, but now Trump has broken all those rules. For example, France’s Peugeot Corporation has been eager to establish trade relations with Iran, however the United States, with its irregular pressures and behavior, prevented this from happening.” 

“White House has tied the global economy to their own economic interests, and this is not acceptable at all," Kazemian said.

The silver lining

Kazemian believes that even though Trump’s actions has had many catastrophic outcomes for the global economy, however some good has come out of it too.

To put it in his words, “Trump's presence, despite being a threat to the world economy and free trade, has resulted in emergence of some valuable concerns among many countries.

Economic powers such as Russia and China, and emerging markets like India and Brazil and even Europe have become aware of the negative impact of U.S. hegemony on their economies and therefore are taking measures to reduce their reliance on the United States.”

For instance, China and Russia are moving toward doing trade in their national currencies. Other emerging economies have also come to the same conclusion, acknowledging the fact that America's economic dominance over the world will result in insecurity of their businesses and economic environment, seeking to free themselves of the "American economic unilateralism."

EF/

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