[C]onsidering the global nature of most modern supply chains, any America-First-themed trade war is a trade war with the entire international system: rivals, but also allies, with every action rippling throughout the entire global order. A global recession is absolutely guaranteed and based on how fast and heavy Trump lowers the boom, this could well be the singular action that drops the world into the Disorder that I often speak and write about.
Finally, do not underestimate just how fast this unravelling can happen. One of the few points of Trumpian consistency is his White House’s desire to “get better deals” in trade bodies while systematically undermining those same bodies. For example, the new American steel tariffs will do the most damage to Canada, a country that the Americans are hip-deep in negotiations with on the future of NAFTA. Or there’s the WTO which the Americans are attempting to overhaul, yet they have refused to allow the confirmation of the judges within the body’s appellate courts which hear trade disputes – rendering the entire organization impotent to deal with rising trade tensions.
For those of you who remember, in the Accidental Superpower I expressly noted that the global system was so fragile and counter-intuitive and out-of-date that it was a waste of time to guess what specific action might cause it all to crash apart. An American-initiated trade war is perhaps one of the ways to destroy it most quickly and thoroughly. I believe I referred to it as the “American bad hair scenario.” And so, here we are.
And here we go.