Trump Disrupts Global Economic Order Even Though The U.S. Is Dominant

By declaring a trade war on the rest of the world, President Donald Trump has panicked global financial markets and raised the risk of a recession.

WASHINGTON (AP) — By declaring a trade war on the rest of the world, President Donald Trump has panicked global financial markets, raised the risk of a recession and broken the political and economic alliances that made much of the world stable for business after World War II.

Trump’s latest round of tariffs went into full effect at midnight Wednesday, with higher import tax rates on dozens of countries and territories taking hold.

Economists are puzzled to see Trump trying to overhaul the existing economic order and doing it so soon after inheriting the strongest economy in the world. Many of the trading partners he accuses of ripping off U.S. businesses and workers were already floundering.

“There is a deep irony in Trump claiming unfair treatment of the American economy at a time when it was growing robustly while every other major economy had stalled or was losing growth momentum,” said Eswar Prasad, professor of trade policy at Cornell University. “In an even greater irony, the Trump tariffs are likely to end America’s remarkable run of success and crash the economy, job growth and financial markets.’’

Trump and his trade advisers insist that the rules governing global commerce put the United States at a distinct disadvantage. But mainstream economists — whose views Trump and his advisers disdain — say the president has a warped idea of world trade, especially a preoccupation with trade deficits, which they say do nothing to impede growth.