by Xinhua writer Wang Nan
BEIJING, March 27 (Xinhua) -- With erratic trade policies and a growing appetite for protectionism, the United States has become a destabilizing force in the global economy.
Inside the United States, economists warn that Washington's recent policies are steering the country toward a slowdown some have already dubbed the "Trumpcession." The Federal Reserve recently warned of increasing economic uncertainty, revising its median projection for U.S. GDP growth this year down to 1.7 percent while increasing its inflation outlook. Pessimism is overshadowing Wall Street: Goldman Sachs and JPMorgan have both revised their forecasts downward, and market jitters are growing.
Nobel laureate and economist Joseph Stiglitz goes further, predicting that the administration's unpredictable tariffs will drive the United States into "devastating stagflation," a toxic mix of stagnant growth and rising inflation.
Globally, concerns over the fallout from a "Trumpcession" are mounting. European Central Bank (ECB) President Christine Lagarde has cautioned that the changes of U.S. trade policies could drag down Eurozone growth while fueling inflation. Meanwhile, in Japan, where exports drive much of the economy, heightened uncertainty might affect the timing of an interest raise by the Japanese central bank.
Global financial markets are struggling with a spike in uncertainty. A recent Bank of America survey revealed that global equity outflows have surged to multi-year highs. The U.S. dollar index declined by about 4 percent compared to the beginning of this year, while the S&P 500 has also shed nearly 4 percent.
Under this unpredictability, market confidence is crumbling, with businesses downgrading growth projections and shelving plans. Syensqo, a Belgian company, has halted its investment plans to produce components for electric vehicles in the United States. A Danish industry survey revealed that a quarter of the 500 firms surveyed had downgraded their growth forecasts due to the volatility of American policies.
By weaponizing tariffs, Washington has upended the free, rules-based trade system that has underpinned global stability for decades.
U.S. politicians must recognize a hard truth: Undermining free trade will boomerang, hitting U.S. workers, businesses and the broader economy. Lasting prosperity depends on free trade and win-win cooperation, not short-sighted protectionism. ■
